Today many investors would argue that modern planned expansions of high-rate of return areas such as Las Vegas or New York would be the best ways to capitalize on the potential wealth accumulation and revenue amassing possible in the present day era via real estate development.
Rising demand in certain markets ensures constant luxury or other types of development has made the speculative investor much more conservative with respect to the real estate development trust or fund offering.
Today’s real estate animals are restive. Just as institutional lenders have become accustomed to the profit returns such projects can deliver, the market has been sapped of strength. The quieted real estate home sale boom in California especially has many risk-averse institutional lenders and capital investment firms looking for new ways to secure their loans yet yield significant gains.
Only in a place such as New York, Las Vegas, London, Paris or even Venice, could astronomical costs of doing business, buying land, interpreting foreign ownership and tax laws, ordering construction, and navigating bureaucratic intricacies be considered an adducible cost of doing business. Recoverable value is maintained from property alone once a commercial building or residence development is completed.
But a new star has fallen from the sky, in the East. Dubai, in the United Arab Emirates, rises into the clouds. Dubai is the shimmering star in the real estate investment capital kingdom. Cityscapes of Dubai include life overlooking the magical and lush landscaped water, hotel gardens, offshore island resorts, and neighboring towers.
But in Dubai there are no clouds, just crystalline sea views of the world’s most premium real estate, and the people that own it. These properties are not hard to market. Airport access and luxury entertainment and resort living provides all the amenities international hotel and luxury residents can want.
Dubai may become the next travel destination of choice across all markets. It has recently become the most exotic travel destination. Imagine the people you’d meet. Imagine how easy it would be to get people to buy there, people already looking for the new thing in luxury real estate to own and invest in.
Even when a market has no more resources to expand to its production possibilities frontier, no more land, it answers the demand by growing out to sea and upward to the skies. Any product that has demand that constant must encourage fiscal growth.
Written by Page Howe. Page Howe bears no affliation with Dubai Select. The views expressed are purely his own.
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