Dubai and Property Ownership

Thousands of foreign home-buyers and investors are currently purchasing property in Dubai. Dubai has become a focal point of a property revolution. A study is needed to understand this phenomenon and determine whether investment in the Dubai property market would be lucrative short- and long-term.

The Real Estate department of Dubai reports that there have been hundreds of residential, commercial and educational constructions in Dubai to cope with ongoing growth. The government of Dubai developed six major industrial areas: Al Qusais, Al Ramol, Ras Al Khor, Al Khabessi, Al Goze and Jebel Ali. These areas currently possess infrastructures such as roads, electricity, and communication (Real Estate Department, Government of Dubai, 2005). While growth is currently taking place in Dubai, there is much speculation as to the continuation of this growth. Reports indicate that there may be problems with supply and demand, however the good life remains inexpensive in Dubai and there is a flight to this quality. Some are stating that prices for Dubai properties are rising and buyers must make haste, while others are reporting that the demand curve for Dubai real estate has shifted since Dubai is building too much. The demand for Dubai property is determined by factors such as consumer confidence, costs of rentals, population growth, salary increases, foreign buyer confidence, the value of the U.S. dollar, and global real estate market (AME

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descriptive models focus on how decisions are actually made. The rational or normative model may not be observed in actual practice since what people should do according to theory may not be related to final decisions. Decision theory includes the use of asset allocation models, which suggest optimum allocation between performance and risk (Armonat & Pfnuer, 2004). Portfolio theory includes the use of a multi-asset real estate portfolio (Riddiough, Moriarty, & Yeatman, 2005; Williams, 2003). French (2001) stated that the decision maker using the allocation model may actually make decisions based on factors outside the parameters of a mathematical model. Thus while decision theory includes a focus on mathematical models, it also draws from the perspectives of multiple disciplines. The important consideration in the decision-making process is how the investor perceives the risk. With the asset allocation model risk is equated with uncertainty of achieving a specific and required return. However this definition of risk may not be enough for the decision-maker who equates risk to the consequence of not matching competitor performance. The bottom line is the question of how much should be invested in real estate and the an

Category: Foreign - D