Dubai residential property prices have been the talk of the town for some weeks after a number of research experts began using the coveted words "the bottom".
Jones Lang LaSalle, one of the most highly reputed property specialists worldwide, believes that residential prices are bottoming out in a number of locations in Dubai, with prices already rising in some prime residential spots in a recovery from the crash of 2008.
But does this confident talk mean retail investors should once again dip their toes in the property waters? Maybe, say analysts, as long as investors are picky about their choices.
"In some locations, you have missed some of the growth already and need to get in quickly," said Craig Plumb, the head of research at James Lang LaSalle in Dubai. "In selective projects, it's a good time to buy now, but you have to choose the projects very carefully. The overall market is still seeing oversupply and declining prices, whereas there are projects in the market where [sales] prices and rents are increasing."
Mr Plumb estimates that investors can achieve average rental returns of 4 to 5 per cent after paying all costs associated with owning and letting properties.
But 5 per cent is some way above the fixed-term deposits on offer at banks based in the UAE, and the rental yield does not factor in any possible gain from an increase in the price of a home. Broadly, UAE banks offer under 2 per cent for a fixed-term deposit of a year.
Some growth in rents and sales prices is occurring in areas such as the Meadows, the Palm Jumeirah and Arabian Ranches, according to analysts, as they have well-established communities that include retail and other amenities.
As prices have fallen since the peak levels of 2008 and supply has increased, villas have become more popular for their greater space and outside areas.
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