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*I have found a reasonably priced beachfront property in Dubai, but the construction of at least five surrounding buildings and the new tramline is making me reconsider. The noise, dust and road works will surely put off potential tenants. Is it a good idea to buy now or wait until the construction is over?
You must be referring to Dubai Marina, where the new 14.6km tramline and a number of new towers are being built. There's no denying that the ongoing construction has made the area less desirable from a tenant's point of view. But you must remember that it's all temporary —the buildings are bound to be completed soon and the first phase of the tram should launch next month.
Once operational, the tram will make Dubai Marina much more accessible, as it will link up with the Dubai Metro and Palm Monorail, which will positively affect properties in the area. So it's important to look at the bigger picture and think long term, because the nearer the construction approaches completion, the higher the prices will go.
*I'm thinking of investing in a one-bedroom apartment, particularly in Dubai Marina and Downtown Dubai. What kind of rental yield can I expect in these locations? Are there specific areas where the return on investment is higher?
Established communities such as Downtown Dubai, Dubai Marina, Jumeirah Lakes Towers (JLT), The Greens and the Palm Jumei-rah can generally earn an annual rental yield of between 4 per cent and 6 per cent. But growing demand on lower-priced areas has resulted in higher yields. An example is Discovery Gardens, where the average annual rental yield has been at 8 per cent.
Keep in mind that smaller apartments have higher gross returns when rented out, due to their lower cost per square metre.
*I'm planning to buy a property. However, there have been instances when features got cancelled out of a project or a new tower alters the landscape. How can I be sure that the views I'm promised do not change at some point?
On rare occasions, some of the features of an area have been changed for improvement. For instance, DMCC, the master developer of JLT, announced in 2012 it would be converting one of the community's four lakes into a park in an effort to provide more green spaces for residents.
While a few buildings lost their lake views, the entire community gained a much-needed green haven.
Unfortunately, you cannot predict what will come up around your residence in the future if there are no signs at present. Similarly, things don't always go as planned and certain features could sometimes be eliminated. The best way to avoid such scenarios is to look at fully developed areas.
*Having just bought a new studio apartment, I'm trying to decide whether to rent it out on a short-term or long-term basis. Which would be more profitable and how can I make sure there will be no gaps between tenancies?
As with most of the world's cosmopolitan cities, renting out your property on a short-term basis can help achieve a much higher return on investment. You'll also have the flexibility to use the property for yourself, your family or friends. Most importantly, you will escape the constraints of long-term letting, such as capped annual increases.
If your property is furnished to a high standard and has five-star facilities, it will have more chances of being rented on a short-term basis. You already made a smart choice by opting for a studio, which is ideal for business travellers, students and tourists, or simply those on a temporary visitor visa who cannot rent a fixed tenancy agreement.
To avoid vacant periods, consider renting out your property through a leasing agency, ideally one that can also manage it, including paying utility bills and overseeing maintenance on your behalf.
*With so many properties under development in Dubai, I'm concerned about the quality of construction and finishing of new apartments. Are there laws or regulations that ensure the sustainability of new buildings?
"Renting out your property on a short-term basis can help achieve a much higher return on investment. You'll also have the flexibility to use the property for yourself, your family or friends."
In recent years and with the property market boom, many contractors were only concerned with completing the project as quickly as possible and maximising the return on investment. But projects in the emirate will now need to meet 79 new compulsory green building rules and specifications issued by the Dubai Municipality.
These mandatory specifications will ensure energy efficiency and sustainable construction in new buildings. In addition, the Royal Institution of Chartered Surveyors recently adopted higher levels of regulation to ensure property valuations by their UAE members adhere to International Valuation Standards.
What impact will the planned Dubai Water Canal have on Business Bay?
The Business Bay Canal extension is a massive project. It will extend the canal from Business Bay on Shaikh Zayed Road, through Safa Park and all the way to the Arabian Gulf. If you look at the project details, you can see how it will transform its surrounding areas.
Firstly, cycling and pedestrian tracks, bridges and greens will link both sides of the water canal, which itself will contain a number of marine transport stations and jetties. Secondly, retail and leisure centres will open on both sides, as well as four world-class hotels and up to 450 restaurants. Thirdly, the 800 million cu m of water flowing through the canal each year is anticipated to have a cooling effect on the city.
What all this means for Business Bay is an enhanced quality of life, better views overlooking the creek and a thriving residential and commercial destination that offers much more than just office towers.
More tips on Buying Property.
Source: Porush Jhunjhunwala, special to Property Weekly
Porush Jhunjhunwala is Director of Banke International Properties, a boutique real estate brokerage based in Dubai.