Trying to determine where you should purchase your dream home or scoop up some additional investments in the form of landed property isn't easy. There are so many places around the world that appear to be alluring destinations for your investment money that it can almost be overwhelming when the time comes to pick and choose. Nevertheless, some places are better investment options than others, and many people have been keeping an eye on Dubai for years now with the intention to purchase some land.
Should you invest in property in Dubai? Here's a breakdown of what you can expect if you foray into this real estate market.
Dubai has been dominated by construction
Few places in human history have been as dominated by the sudden, swift construction of elaborate projects as Dubai has. For years now, Dubai has effectively relied upon a model of "build it, and they shall come," which by and large paid off in the form of investors and residents flocking to the country in order to spend their money on lofty condos and beachside property. Notable construction projects, like the Burj Khalifa, the tallest building in the world, have made Dubai a popular topic of discussion amongst those interested in real estate investments, too.
Dubai isn't all glitz and glamor, however, with many of the impressive construction projects being accomplished with the help of inhuman labor conditions and arrangements with nearby countries, wherein cheap immigrant labor is imported in before being exploited to build towering real estate projects. Whether it's forced labor from Africa or simple local arrangements that deprive everyday workers of acceptable living and working conditions, there are many reasons to view the impressive spate at which construction in Dubai has occurred with suspicion.
Furthermore, money laundering concerns continue to persist amongst watchdog groups, who assert that Dubai is an increasingly dubious destination for those seeking to safely invest their money overseas. According to one report in Forbes, for instance, the city of Dubai has become a "money laundering paradise" wherein many financial transactions occur for shady and criminal purposes. While this certainly doesn't mean the entirety of the Dubai real estate market is compromised, foreigners who are unfamiliar with the area should understand that growing scrutiny as it pertains to money laundering renders it a suspect investment option.
With Dubai still being widely recognized as one of the thriving business centers of the Middle East, however, it's managed to continue attracting foreign investment into its property despite the allegations of abuse and fraud being leveled at its recent developmental actions.
One of the best in the region
Some watchdog groups, like Transparency International, actually note that while Dubai certainly suffers from widespread corruption and illegitimate investment practices it remains one of the least-corrupt countries in its region. The level of social and economic development in the country enables it to have a functioning bureaucracy that targets crime in an effective manner which other still-developing neighbors can't match. Concerns surrounding human rights still persist, however, so those investing property in Dubai should always exercise their due diligence when partnering with local investment or real estate firms.
Certain residential communities like Remraam continue to draw in impressive numbers of foreign investors because of their luxurious nature, too, so many involved in the region's real estate market clearly believe that the scenic destination is a good long-term investment. Whereas the past four decades have been tremendously good to Dubai, however, there are reasons to believe that its thriving, construction-based model of development could slowly but surely be losing steam. Property prices have been slowly slinking downwards over the past couple of years, with prices having sunk by at least 25 percent since 2014, according to the Financial Times.
For potential investors, this is both good and bad news; low prices mean that investors can find excellent deals and scoop up vast swathes of property at low prices, but it also means that the future wellbeing of your investment can easily be called into question. If property prices continue to slink downwards, for instance, it won't matter how excellent of a deal you received. Dubai is likely in desperate need of a new, forward-thinking business model that's not entirely dependent on churning out new projects like hotcakes with the expectation that hungry investors will be waiting to scoop them up.
If Dubai is to remain a thriving center of property investment, then the city must do more to enable lure in wealthy foreigners who are so crucial towards its economic well being. Furthermore, extensive human rights reforms are desperately needed, as many who would otherwise love to buy property in the region shun it thanks to its reliance on forced labor regimes. When considering if you should invest in property in Dubai, make sure you take all of the political and cultural factors into consideration alongside of the economic ones.
* This is a contributed article and this content does not necessarily represent the views of realtytoday.com
