Dubai Property Should be Marketed on Rental Yields to Recover

Dubai air-traffic saw a 7.9% year-on-year growth last month, reports the Gulf Newspaper. The increase is attracting new airlines to Dubai international airport, which will widen its coverage and further increase traffic through the airport.

Just last week Dubai international airport welcomed private airline and Chad national carrier Toumai Air Tchad, and Jet Airways, which started flying to Dubai international airport last year announced a new route to Chennai and another daily flight to Mumbai. China's Hainan Airlines will run flights to Dubai from May 25.

This shows that though the Dubai property market is severely in the doldrums, the massive array of glitzy and glamorous world class resort hotels of up to seven stars; some of the most impressive architectural feats of the modern world continue to attract tourists.

With strong tourism goes high rental yields, and with that in mind maybe the bankers and Dubai developers are correct when they say that increased lending by the banks to allow developers to complete their developments would go a long way to bringing recovery.

But, our Liam Bailey says, if Dubai's property market is to ever be the same again they will need to change the investment models they market."Dubai was marketed on capital growth projections, which for a long time exceeded even the wildest expectations However, it was all based on foreign buyers, and when they disappeared the market collapsed," he said.

"This showed people that foreign buyers are fickle and cannot be relied upon, and there is no point having capital growth if you have no one to sell to, which causes the price to drop again.

That said, Dubai has some of the most impressive holiday accommodation in the world, and there is potential for some impressive rental yields to be made. Marketing on that strength is the only way I see Dubai's property market ever being the same again -- a few apartment hotels with buy-back options would work a treat," he explained.