Low risk high rental yield investment
Rental rates within Dubai have been rocketed up in the past year; during 2005 a minimum of 10% could be expected. This is the result of a strong housing market that has seen good stability coupled with rising house prices during 2005. Such further drives demand for property by driving those presently renting into buying to avoid any further rental rises whilst gaining a fixed asset, and thus further fuelling the Dubai property market.

Prices still low
Dubai is very much the Middle Eastern equivalent of London or New York; it is the economic heartland of the Middle East attracting investments and business from all over the world. Yet the price of housing within Dubai is nowhere near is high, this coupled with the tax free income system in place within Dubai maximises any profits gained from rental incomes and capital gains on property compared to the UK.

Growth within the finance sector
Within the last few months the UAE has begun to see significant growth in the finance sector with increasing numbers of players coming into the sector means potential investors can buy mortgages with similar interest rates to UK banks.

New property law introduced
Recently in 2006 a new property law was enacted which for the first time in Dubai allowed foreign nationals to be able to purchase property on truly freehold terms rather than the traditional 99 year lease. Such has removed a level of uncertainty from the minds of foreign investors. The effect of which will almost certainly raise the value of properties.

Property supply shortage
Although there is significant number of developments being constructed within Dubai there is still not enough for the large number of new residents expected to come into Dubai. Finding properties such as 1-bedroom flats in reasonable areas is already difficult and is expected to get harder, which in turn will drive up both rental charges as well as the overall price.

Demand high in key areas
One of the major effects of the transformation of Dubai from a sleepy Middle Eastern fishing town into the financial centre for the entire Middle East is that it has begun to draw in a significant number of foreign expatriates every year nearly 250,000 had arrived in 2004 alone. These influxes place a significant amount of pressure upon the housing market through demand that in turn forces up property prices. 

Delays in new supply
Although many new developments are due for completion by 2008 or 2009 it is unlikely that they will be constructed by their stated deadlines. Presently there is a number of labour and quality control disputes that have resulted in strikes and damage to construction for a number of major high profile developments, which may delay them for a year or possibly more. These delays will thus further perpetuate the misalignment between supply and demand, which can only be beneficial for the investor.

Booming Economy within the UAE
Rocketing oil prices at record highs coupled with clever strategic and economic moves by the government of Dubai has brought an immense amount of wealth into the Emirate and the UAE in general which has gone into its infrastructure and development which in turn has made it ideal for foreign investment.

Dubai is the place to be
Dubai is one the most successful places in the world at marketing itself becoming a major tax free zone which has attracted significant foreign investment including from celebrities like David Beckham, and now is pushing itself as an excellent holiday and tourist destination through developments such as Dubailand which is one the largest theme parks in the world. Over 5.4 million tourists visiting Dubai in 2005 alone, this number is expected to rise in 2006 and continue to grow, which in turn has created a new market for investment in the holiday home rental sector.