November Issue 2008

“I do not think the real estate market is a bubble which will burst”

– Mumtaz Muslim

Q: Why did you opt for Dubai?

A: When I was visiting Dubai I had a chance to see the development that was taking place here. Having nothing to do, I would drive endlessly in a rented car and see the vision of the Dubai rulers become a reality. I saw the The Palm — a man-made island shaped like a Palm tree, which houses luxury apartments; The Marina, surrounded by luxury buildings and apartments; and the tallest building in the world, all come up in no time, and witnessed the whole desert turning green. I have never regretted moving to Dubai and, in fact, thank the Almighty for creating circumstances that led me to Dubai. My business is set and is keeping pace with the growth of Dubai. My family is all here and we are extremely happy.

Q: What are the advantages of living in Dubai?

A: Oh! There are many. Firstly, you are only an hour-and-a half away from Karachi. Then, you have all the privileges of the developed world in your own Islamic and Eastern environment. There is security of life. No one will get killed over a mobile phone. Women can feel absolutely safe here. There are no power failures or overflowing gutters. You can live any way you want, and no one is watching you. You do not have to look over your shoulder all the time. Domestic help is available. Best of all, there is no corruption at any level and as long as you follow the law and respect the local customs, there are no issues at all.

Q: What are the disadvantages of being in Dubai?

A: Frankly, none.

Q: What are the property prices like there? Is it a bubble likely to burst soon?

A: With instability surrounding the Emirates, the price of property has been increasing very rapidly. The years 2007 and 2008 have seen an unprecedented hike in prices. I do not think the real estate market is a bubble which will burst. The development is backed by very big and sound projects in the industrial, tourism and service sector and the demand for residential and commercial space is genuine. Hence, it is not going to burst. Yes, we may see some correction in the price of real estate but this happens in every maturing market, and Dubai will not be an exception.

I am not sure about Ajman and the other Emirates though. I think that could be a bubble. Investors should first see who the developer is, and then decide. I think price is the last concern for me when deciding about investing in real estate.

Q: Could you specify which areas in Dubai are on the expensive side and which less so, with their price ranges?

A: This is a very difficult question to answer. In Dubai, you can buy real estate from a hundred thousand to several million dollars. As in any other place, the prices depend upon location and the area. The prices are naturally higher in the new areas, which are being developed around the roads leading from Dubai to Abu Dhabi. The areas where the tallest building and the biggest mall in the world are being constructed are the most expensive, followed by the Dubai Marina area. The villas at Emirates Hills can be anywhere from $7 million to $20 million.

Q: How expensive is it to purchase a studio, a one-room, or a two-room apartment; and conversely, a house on 500 sq. yds, or on 1000 sq. yds?

A: You can buy a 500 sq. feet studio apartment in the International City for as low as $100,000 and you can buy the same sized studio in the Burj Dubai area for as much as $470,000.

A one-bedroom apartment in the International City should be around $175,000, while the same in the Marina area would be around $420,000. In the Burj Dubai area, this would be around $650,000.

I think a two-bedroom apartment in the Marina area would be around $750,000, while the same in the Burj Dubai area would be around $1.2 million.

Q: Is it true that a lot of Pakistanis have moved to Dubai within the last six months to a year? Do you have any idea as to how many?

A: Hundreds have moved. A lot of them have not moved physically but have bought assets and properties and will move when things get worse in Pakistan. We meet a lot of Pakistanis at social gatherings who have moved recently — mostly driven by the economic and political conditions in the country, and particularly because of the rapidly deteriorating law and order situation.

Q: What professions do they generally belong to? Are they mostly businessmen with a lot of money, looking to invest?

A: Yes, most of them are businessmen. But, there are many professionals too. A friend of mine, who is a very successful doctor in Pakistan, called me up a week ago and asked me what Dubai has to offer for people in his profession. But it is not just Pakistanis who are moving to Dubai. There are also many Europeans, Americans, Iranians, etc. They are moving for what Dubai offers — great living; tax-free income; security, etc. Pakistanis are basically moving because of the instability in the country — law and order is the main concern.

Q: Are they buying property?

A: Yes, most of them are buying properties. Some of them are also setting up businesses, and others are looking for jobs. But property is definitely the main interest.

Q: Are foreigners also buying a lot of property?

A: We are all foreigners in Dubai. If you mean Westerners, then the answer is, yes.

Q: Why are they not providing residency any longer to Pakistanis buying property? Is this restriction on Pakistanis alone?

A: This is an incorrect notion. All those who own property are entitled to residency in Dubai, but only after the property is completed and delivered. It is not possible to get residency during the construction period.

Q: Is ghettoisation taking place with the Pakistanis settling in Dubai?

A: No, I don’t think so. Though a lot of Pakistanis have invested in Ajman, which I do not think is a good idea. But aside from that there is no ghettoisation.

Q: Are Pakistanis the biggest spenders there?

A: Certainly not. There are Russians, Iranians and Indians — all of whom spend substantially.

Q: How much do you need to earn to live comfortably there?

A: Depends on how you want to live. If you want to live in a nice area — a freehold area like the Meadows or Arabian Ranches, for instance — you need to earn at least half-a-million dirhams, i.e. if you do not have mortgage payments. If you prefer to stay in an apartment, again in a prestigious area, you may need about 300-350 thousand a year. But, of course, you have a choice of cheaper areas too.

Q: How many Pakistanis have transferred their money to Dubai?

A: I don’t know. All I know is that whoever has money there is transferring money here. It is amazing to see those beautiful yachts tied up on the Marina.