Property investors in Dubai who want to earn extra cash by renting homes as holiday lets can take advantage of a new government decree.
The ruler of Dubai, Sheikh Mohammed bin Rashid al Maktoum, allows property investors and expats to let homes to tourists. Providing they have a licence.
With more major global events like the 2020 World Expo attracted to the region, the government needs more beds for tourists and sees encouraging holiday lets as one way of quickly expanding the market.
The decree calls for a national register and licensing of furnished holiday lets.
However, property investors will have to ensure their properties meet minimum standards and only homes in selected zones will be allowed to take part in the scheme.
Consumer confidence
“Holiday homes will join the hotel classification network so visitors can be confident that villas or apartments meet our standards, have the necessary insurances and are managed by someone qualified to do so,” said Helal Saeed Almarri, director general of the Dubai Department of Tourism and Marketing.
Meanwhile, research from international property consultants Knight Frank revealed property prices in Dubai are rising faster than anywhere else in the world.
The year-on-year increase was 28.5% at the end of September 2013.
Dubai was ahead of China, where prices grew by 21.6% and Hong Kong, with a 16.1% rise.
The firm expects property prices to keep rocketing as the World Expo boosts the economy.
“Dubai is certainly ahead of the rest, but we monitor house prices in 53 countries, but the survey shows strong property price rises in many emerging economies,” said a Knight Frank spokesman.
Property prices surge
As a gauge of the Dubai property market, the same report listed Dubai at 23 in the survey with a modest home price rise of 2% for the year to September 30, 2012.
Only three years earlier, Dubai took last place in the study after prices plunged a massive 49%.
Despite the huge increases over the past year, home prices in Dubai are still below the peak of 2007-08 and have some way to catch up before gains match the previous high.
The Dubai government has taken several steps in recent months to take the heat out of the market to try to burst another property price bubble.
Dubai residents and expats face mortgage caps, while developers have seen taxes for permits rise.
The aim is to rid the market of off-plan speculation artificially driving prices up.
