JUST ESTIMATE THE MAGNITUDE

Main constructors in Dubai, such as Emaar, Nakheel and Dubai Properties, appeared to get the best advantage from the government’s decision to take off responsibilities in the real estate sector, as this company could own this land by subsidies tariffs. Nakheel Company not once received governmental subsidies. At the present time the company owns the enough amount of land and rights to service the projects during the nearest 10 years. Unlike Emaar, at Dubai Properties there is also a land-bank.

Great part of the dwelling real estate, appearing in Dubai, is a part of large-scale projects, planned on a long-term period. It matters very much for the further changes in the looks of Emirates, taking into account that most part of dwelling structures is in the cities. Presently villas form almost 40-50% from the general volume of the dwelling real estate in Dubai. However in the nearest time the correlation has to change, as greater part of dwellings that are planned to be handed over from 2006 to 2009, consist of apartment houses.

Most objects, listed in Table 1, are offered in absolute ownership both for investors and for eventual owners. Practically all of the indicated objects are very fashionable habitation.

Table 1. Main obj ects in Dubai

As it was already said, many districts arise stage-by-stage. In the same time some of them are part of more large-scale projects. The distinguishing feature of basic projects is a large attention, given to the rich infrastructure of Resort and Entertainment sector. For example, Dubailand is an enormous project, in which were invested approximately 35 milliards of dirham. It is expected that 300 thousand people will live at its territory, and each day there would be 200 thousand visitors. Completion of construction is set on the end of 2020. This project gives rich possibilities for resort and meant to satisfy the proper demand on habitation, in particular on habitation for resort. «Palm islands» - one of the most luxurious projects of company Nakheel,. It takes place in that very niche. Uniqueness of artificial islands with fashionable villas, “water” houses and theme parks provide Dubai with the status of the world center of entertainment and resort. «Palm islands» are in the included in Dubai Waterfront, where according to the project 250 dwelling districts must be disposed, where no less than 400 thousand persons would be able to live.

Besides concentration on the tourism and recreation sphere another personal touch of many new projects is connection commercial and dwelling areas on one territory. Good example of project like that is Business Bay, Dubai Properties project, where it is planned to create an ideal business atmosphere for companies from around the world. In addition, on its territory there would be built 11 dwelling sky-scrapers, where the suites will be given in complete ownership. Similar measures will allow planning better infrastructure and decreasing the probability of transport congestions.

Besides the listed above large-scale projects, there is a number of more shallow dwelling projects, which are developed by private constructors. In spite of the fact that these projects considerably lose in the matter of large-scale advertising, many of them appeared to be very successful and were completely sold out on high prices by the time of completion of build works. For example, apartments in «La Reve», small dwelling object in Dubai Marina, which consists of 125 rooms, were sold at price in 1800 dirham per a square foot.

Demand and supply

Middle countries annual income does not exceed 40 000 dirham, at the same time approximately 35 000 dirham are earned by non-residents. It means that greater part of demand on habitation is consists of middle or cheap habitation, but not an elite expensive apartments or villas. Based on this estimation, we can expect displacement of internal demand rather to cheap and middle habitation, than expensive.

Regarding rather moderate estimation of the expensive real estate supply, it is assumed that it will exceed demand during three next years, since current projects will be completed. The increase risk entails more high demand outside of foreign investors and those, who plan to purchase here rooms and home for resort.

This situation is conditioned mainly by following factors:

• Demand on capital investments
• Demand on buildings for recreation ownership
• Moving insignificant number of Moslem population abroad
• Basing international companies in Dubai
• Stable tourists flow into the country

Also the substantial influence on the demand growth can render law on an absolute right for the real estate domain for foreigners, which was issued in Dubai.

In spite of the above-described tendencies, high demand is foreseen on high quality villas and other individualized real estate. As it was stated, suggestion in a short-term period will be higher than all in the segment of apartments. Companies-constructors attempts to inculcate the innovative technologies to the market can correct this situation partially. However we expect analogical development in regard to middle and inexpensive habitation. It is possible to expect supply deficit until a government undertakes serious steps for development of outskirts of city under building the inexpensive real estate.

Yet not tested in practice model of domain for the real estate can interest buyers in matter as habitation and recreation place. It can play a considerable part in the growing number of purchased elite expensive habitation in Dubai. Some construction projects can be initially aimed on effective use of this source of demand. Taking into account the image of Dubai as a shopping center, experts say, that recreation habitation, in which a stake belongs to the owner in 1/52, more interesting and advantageous investment, than partial domain, requiring more investments. Moreover, so far the attractiveness of Dubai is not proved as the second place of inhabitation, while its attractiveness as a recreation-place is obvious. Orders come from all around the world, but most - from other countries of the Persian bay. Prices on the real estate in Dubai are listed below.

Table 2: Prices on the real estate in the chosen projects of Dubai

Table 3: Prices on the real estate in the chosen projects of Dubai