Free Resource - A guide to the Middle Eastern Property Markets

Discussion in 'Middle East Property' started by totallyproperty, Apr 1, 2016.

  1. totallyproperty

    totallyproperty Administrator Staff Member

    Middle East property

    The Middle East has long been a conundrum for investors and business owners due in the main to a very different political and regulatory environment. There are obvious differences between the Middle East property markets and European markets but there is no doubt there are opportunities for lucrative investments across the Middle East region.

    Dependent upon oil

    Oil has been a major component of the Middle East economy for many years now and will continue to be so long into the future. If you dig a little deeper you will be surprised to learn that not all countries are as dependent upon oil as you might think. We have seen a significant increase in the services sector across the region not to mention property investment. So, while it is obviously very useful to keep a close eye on the oil price this is not the be all and end all of the region.

    Political uncertainty

    There is a very different type of politics across the Middle East and while from time to time we will hear of new political trends and movements, more often than not they come to nothing. There are some very powerful figures in the Middle East and while there have had to dilute their influence somewhat to attract overseas investment it is a very different environment to that in Europe and the US for example.

    The economy

    As we touched on above, the economy is heavily dependent upon the price of oil but there are also other prosperous areas such as property investment. This particular area of the market obviously depends upon a strong economy and the creation of new employment opportunities. The expat community has a significant influence on real estate investment in the Middle East although unfortunately expat workers are often the first to lose their jobs in challenging economic times.

    Property regulations

    As we saw with the rise and fall of the Dubai real estate market, property regulations in some of the Middle East markets do not compare favourably to the likes of Europe. Investor confidence plays a major role in any property market and therefore the ongoing improvement in regulations will help to increase activity in the longer term. It is all good and well having the best prospects in the worldwide property market but unless there are regulations to protect investors and developers there will be issues.

    The future

    Many experts believe that the Middle East real estate market is something of an untapped treasure which is now being reflected in rising property prices. The key to overseas investment in the Middle East will revolve around tighter regulations to protect investors as well as the removal of restrictions on overseas investment. In many ways it is the stigma of years gone by which continues to impact the impression which many property investors have of the area. As this stigma fades we will see an ongoing increase in overseas real estate investment which bodes well for all involved.



    However, bear in mind that regulations are different across the Middle East and you need to know your market if you are investing in real estate.
     
  2. bin_3loush

    bin_3loush New Member

    I wish you wrote a book explaining more about these topics, such as the differences in ME and europe real estate.


    Sent from my iPhone using Property Forum
     
  3. Ishan

    Ishan New Member

    Thank you for the relevant information. I would also like to mention the concept of freehold and leasehold properties in Dubai.
    What is freehold?
    If you own the building and the land both till perpetuity and it is registered in your name then it is essentially a freehold property. It is pretty much always preferred over leasehold. In addition to this freehold property owners and their families get renewable residence visas. You can buy such properties only from govt. approved real estate agents or developers.

    Advantages

    · Complete ownership and owners can make changes to the structure of their homes.

    · Held till perpetuity and transferred through generations.

    · Authority over buying and selling

    · Renewable residence visas for families.

    Disadvantages

    · Responsibility of maintenance.

    · Availability is designated areas only.

    What is leasehold?

    It means that you lease the land from a freeholder to use the land /home for a limited no. of years. The max no. of years you can lease a home for is usually 99 years after which you lose the lease and control is transferred over to the property owner. In leasehold the buyer is granted the rights to the unit only and not of the land on which it is built on.

    Advantages

    · More buying options as leasehold is available in a number of areas.

    · It can be renewed at the end of the term, thus can continue to live on the property.

    · Mostly the landowner is responsible for maintenance of the property.

    Disadvantage

    · To make changes to the unit such as renovation, remodeling or alteration you have to make permission from the landowner.

    Which one should you buy?

    Practically speaking freehold property gives you more control as compared to freehold. But 99 years in also a long time and it all depends on how far down the future you are thinking. If you plan to live in the country for a long time then the best option would be to freehold a home that you and your family loves and would want to keep it in the family. However, if you’re a seasoned investor and have short term goals then leasehold is the right option for you. No matter which option you choose it is important to understand the responsibilities and legal rights of each type of ownership.
     
  4. diyhelp

    diyhelp Active Member

    On the subject of Dubai I see that Warren Buffett is doubling up on his exposure to the area - expanding his office and bringing in more advisors. Is the down turn which began in 2014 about to end?
     
  5. Sonalia

    Sonalia New Member

    Agreed! It is extremely important to do your research before any investment.
     
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