How Dubai's property market has evolved
Dubai is a melting pot, bringing together varied cultures from every corner of the globe. It may seem cliché to say that, but it is one of the defining aspects of the city and certainly one reason why I love living here. In our office alone, we have a mix of people from three continents and more than half a dozen countries.
As Dubai has continued to grow and strengthen its position among global peers, it has embraced its cultural diversity even more enthusiastically through new initiatives and regulatory changes that are ultimately designed to make life easier for visitors coming into the city. One aspect of this change is the introduction of freehold residential projects in areas and districts that have historically been leasehold.
Jumeirah is a prime example of this shift in Dubai's property market. The district has always been hugely popular, in part because of its coastline and attractions such as the Kite Beach, Wild Wadi and the Burj Al Arab.
Speaking for myself, the real attraction of the area lies in its distinct atmosphere. Jumeirah is primarily divided between low-rise developments and detached villas surrounded by richly landscaped greenery, boutique stores, an eclectic selection of dining outlets (many of them homegrown concepts) and of course, beautiful beaches. It has an openness and aesthetic quality that appeals to residents from all over the world, but with a design sensibility that grounds it in local culture and tradition.
Jumeirah is a leasehold area, meaning that foreign nationals are only allowed to lease a residential unit for a period of 99 years without any rights over the property as a whole. If, by example, you want to completely change the landscaping around your home or to knock down the existing structure and build a new house from scratch, you would need explicit written consent from the landowner to do so. A freehold property gives foreign expats complete ownership, which provides them the freedom and flexibility to design it as they please or to rent it out.
Given Jumeirah's fashionable reputation among expats and the expanding demographics of Dubai's population, the transition towards freehold properties seems to be a natural one. Acacia Avenues, launched back in 2006, was the first true freehold development in the district, though it has faced severe delays and is at present only partially complete.
More recently, we have seen the launch of residential blocks at City Walk, the master community of Port de La Mer and Madinat Jumeirah Living, which was formally unveiled at the Cityscape Global this year. Madinat Jumeirah Living is perhaps the most intriguing new project of the year given its fantastic location across from the Burj Al Arab and direct access to Souk Madinat Jumeirah. It is one of Dubai's most exciting addresses and demand is already through the roof.
Projects such as the above provide both opportunity and incentive to invest in Dubai's property market. This is great news for home buyers, who now have the option of setting up their principal residence in a well-established part of the city and gaining access to all of the excellent infrastructure that comes with it. For investors, this is a chance to put their money into an area that is generally considered to be quite lucrative, with rental yields that start at about 6 per cent and climb to almost 8 per cent in neighbourhoods closer to the coast.
While an increase in the diversity of residential projects that match that of Dubai's population is an exciting prospect, it does raise an obvious question - will the more traditional aspects of older districts be pushed aside to appeal to more global sensibilities? It is, I think, a valid concern but not one with too much weight.
Dubai has a character that is uniquely its own and it shines through even in the newer developments. At the same time, it must be understood that Dubai is always aiming for higher standards and a quality of life that is incomparable to any other in the world. There are certain areas that simply do not offer that level of quality in their current state and are in need of an upgrade, not just to appeal to new residents but also to raise the profile of the city as a whole.
Dubai is a key player on the global stage and is only going from strength to strength as it looks to fulfil its vision for Expo 2020 and beyond. As the city evolves, so must its landscape. It has been wonderful so far to see that evolution in progress, and I look forward to seeing what lies ahead.
The writer is founder and CEO of LuxuryProperty.com. Views expressed are his own and do not reflect the newspaper's policy.