The real estate boom has turned Dubai's desert sand into goldmine. Dotted with skyscrapers, the UAE finacial capital has emerged as world-class imercial hub. Finds out

As soon as you come out of Dubai International Airport and coming down to the main street from Deira to Bur Dubai, downtown hub of traditional marketing or shopping plaza, if you take (a southwest journey through Sheikh Zayed Road, the panoramic view of skyscrapers on both sides of your way seems unreal! However, 50-storey buildings of business centers and parks, hotels or even residential towers are quite common in this area. Passing through this street, you will never feel that you are on a desert land. Instead, glittering mirror walls of business centers, towering to a stupendous 200-feet height, transport you to a world of fantasy. But at the sometime, glow signs of famous global brands link cot to the real world, which in this case is today's Dubai! The transformation of UAE financial capital Dubai from a derelict desert land to a world-class commercial hub is amazing. And, it all happened because of property boom.

And there are no full stops in Dubai. Wait a little more by the end of the decade you will be facing studio city that will have over 40 times space and facilities provided by Mumbai's Film City under one roof apart from this, the upcoming cities include Dubai International cities also. In this international city, you will find British architecture and design at London City; Gothic art, design and architecture at Rome city. Similarly, there will be replicas of German and French cities. So, find the entire world under one roof - that is DUBAI! Doesn't it sound unrealistic? On Jumeirah itself, Palm One, Palm Jebel Ali and the Greater Palm built by State-owned developer Nakheel are almost ready for possession. Nakhecl is preapering to deliver 500 of the 3900 luxurious villas and apartments on the manmade Palm Jumeirah Island. Last weekend only, among the first owners of these villas is former England football captain David Bekham, has received the keys of his villa.

Another amazing development is the world's first underwater hotel and its construction has also started recently - 40 feet under the sea! (Breathe easy!!) During the last five years, the UAE has attracted about Rs. 72,000 crores investment in real estate development, leading to high demand for building materials and other equipment. This year five to six major projects worth about Rs.1,21,500 crores have been launched. These include two residential and infrastructure projects in Sharjah.

The UAE construction boom has seen a growing number of Indian entrepreneurs setting up bases in the country, particularly in free zones. Currently, Indians account for 48 per cent of over 2020 companies in SAIF (Sharjah Airport International Free Zone). Most Indian companies are catering to the needs of the construction sector not only in the UAE but also in the rest of Middle East. The latest to set up base here is the Bajaj International that has set up a logistics center. Mahindra Intertrade of Mahindra group has put in place a steel service center. Zee Telefilms, ICICI lnfoTech, Living Media, Godrej and Ashok Leyland are among other major Indian companies with a base in SAW zone, which is adjacent to the Sharjah Airport.

Most companies in SAIF zone are exporting about 90 per cent of their products with only 10 per cent being targeted at the local market. Apart from construction or property segments, these companies are eyeing a rising share in IT and food processing market, which has a tremendous growth opportunity in the entire Gulf.

To promote property sales, UAE authorities are providing residential visa to the owners of apartments. As long as property belongs to you, the residential visa along with your job permit is And, interestingly, this is valid with your family bonanza. Hence, the result is that almost 40 per cent of property buyers in Dubai or UAE are Indian, 20 per cent European (mainly British) and 20 per cent combine the rest including citizens of Iran, Egypt, South Africa, the Philippines (rapidly increasing), Pakistan and Bangladesh. Local property buyers (meaning the Gulf nationals) are less than 20 per cent of the total market. So, ultimately, honey, it is the other man's money that builds your empire.


Due to weak link of the housing finance with the secondary market, residential property buyers in India struggle to arrange a substantial amount of their equity in the loan.

Property prices keep varying depending on area, location and demand. Depending on the fluctuation in property prices, one would have to organise the funds needed for the purchase. In the liberalized economy, if you have regular job arranging money for the purchase of your dream house is quite simple. You can take a loan or borrow from housing finance companies, provident fund, relatives or friends, etc. The Indian home mortgage market is growing rapidly in volume and importance. The outstanding volume of residential mortgage in India is currently over Rs 200 billion and the volume has more than tripled during the last 15 years. The last decade has seen the emergence of many new housing finance companies, and an increasing participation of banks in lending for housing finance.

Traditionally, the housing finance business in India has been limited to the primary market. The nature of housing companies has been like a typical savings and loan corporation. Their linkage with the secondary market has been very weak. Housing finance companies have to raise resources from the primary market through various deposit schemes for lending to individual borrowers. Unlike housing finance markets in the USA or the UK, the role of secondary market has been negligible in India. A serious consequence of weak linkage with the secondary market is that the risk related to housing finance is solely borne by the housing finance institutions. This has restricted the availability of finance.

Only recently, National Housing Bank (NHB) permitted mortgage-backed securities as the 'special purpose vehicle'. The first pool of mortgages securitized by NHB was fully subscribed by financial institutions.

Another implication of dependence on the primary market is the low loan-to-cost ratios of residential properties. A low loan-to-cost ratio implies that households have to amass a substantial amount of their own equity before deciding to buy their own houses. High equity requirement for housing has been a major constraint in home ownership. The average loan-to-cost ratio in India is around 55% as against around 95% in the USA and around 80% in Japan.

In India, we get overexcited due to rising interest rates. If you look at interest rates internationally, the rates on mortgages were as low as 3%. With the Fed hikes in the last couple of years, these have moved to 8%. In India, the mortgage rates have risen from around 7.5% to 10.5%. This should not be a major cause for concern.

People are talking about a slowdown in the US. But in India, we are not seeing any dip in the spirit of investors or buyers. For majority of them who take loans, it does not practically cause a major impact. The banks lessen any short-term impact on finances by extending the EMI period. If interest rates soften, they will again reduce the EMI period. Therefore, over a long term, the investor or buyer will not feel the pinch.

The large prevailing demand-supply mismatch implies that the real estate sector in India will continue to offer interesting opportunities for developers and financial investors in the foreseeable future.


What's the difference between a 'home' and 'house'? Nothing. That may be your answer. However. despite both the words being used interchangeably, there is a world of difference between the two.

A house can be a place to eat, sleep, park your car, and put all your stuff. It is a material possession and an investment. However, a home where you feel comfortable. warm, safe and protected. A home is where you live. A house is something you buy logically whereas a home is an emotional purchase. When buying real estate, you have to balance your emotional wants and your logical needs. At times, you will find serious conflicts between the two.

Why you should move into your own home?
If you are still living in a rented accommodation, here are a few good reasons why you should buy a home.

Pride of ownership. Pride of ownership is the number one reason why people yearn to own their home. Home ownership gives you and your family a sense of stability and security. It's making an investment in your future.

Appreciation: Real estate moves in cycles - sometimes up. sometimes down. However. over the years, real estate has consistently appreciated. Many people view their home investment as a hedge against inflatioSn. Preferential tax treatment: If you receive more profit than the allowable exclusion upon sale of your home. that profit will be considered a capital asset in case you owned your home forover a year. Capital assets receive preferential tax treatment.

THE RIGHT HOME Just because you may feel restricted by price ranges -especially if this is your first home purchase - don't let anybody tell you that you can't afford to be choosy when looking for a home to buy! You are unique. You have desires and needs, hopes and dreams for your new home that are different from your parent's, friend's or coworker's.

HOME SIZE If resale value is an important consideration, you should not buy the largest model in the neighborhood. When determining market value, the homes nearest to yours are most important. If you buy a small or medium house, the larger homes in your vicinity can help pull up your value. Carefully weigh your "needs" against your "wants" before finalizing your house purchase.

Closets, garages and laundry:
Walk-in closets are extremely desirable for the master bedroom. For the rest of the house, just be sure there is plenty of closet space. Don't forget space for linens and towels. Garages add to the resale value and you should always make sure to get at least a two-car garage. Lately, three-car garages have become desirable in some areas of the country. The laundry facilities should be located somewhere convenient on the main floor of the house, but not in a place it will create an eyesore. Think about whether you want to walk up and down stairs when carrying loads of laundry.

Kitchen: Family activity centres around the kitchen. so this is the most important room of the house. Larger kitchens are better. and they should be provided with modern appliances. In newer houses, the family room should also be extremely close to the kitchen. Other important considerations are ample green surroundings. security, easy and affordable transport. good schools, sports facilities, and nearby market and hospital.


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