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Factors Influencing Investment Decisions of Buyers When Investing In The Dubai Residential Market (2015)

Dubai Residential Market and Investment Decisions Dissertation – The Dubai residential market is young, dynamic and fast growing and is faced with lack of transparency and high volatility. This dissertation studies the critical factors within the residential market of Dubai which influence the investment decision of foreign and resident investors. The result of questionnaire survey indicates that safety of property rights, political stability, return on investment and capital appreciation were the driving factors for making investment decisions.

Factors such as affordability, high transaction cost and absence of investor protection and bankruptcy laws were found to be of key concern among resident population, leading to their low participation in the domestic residential market. It was concluded that whereas foreign investors are more focused on safety of their investments, return on investments and as long these criteria’s are met, other market inefficiencies have little effect on their investment decisions.

Enhanced market information system, budget housing and improved property laws were found as possible solutions for increasing home ownership ratio and consequently providing stability to the now highly volatile market. The main aim of this study will be to answer the questions raised in the section of “Statement of Problem and Gaps” and try to provide solutions to those questions. Large amount of wealth in Dubai is invested in real estate and is further concentrating to develop the sector as it tries to move away from being an oil based economy.

However, residential market of Dubai is faced with lack of transparency and information flow, weak domestic demand, high volatility and reactive government policies. It was further concluded by international union of housing finance report that some of the reasons of the housing market bust in Dubai were unregulated bank lending, high speculation and false sense of demand amongst others. This has resulted in reduced investor confidence and low ownership ratio within the market.

Considering the huge potential of the Dubai residential market, studies on understanding market selection criteria of investors and local market efficiency has been negligible. This call for a research study to better understand the criteria investors use when selecting Dubai real estate market and the factors which are accountable for low domestic ownership.

Key research questions

  • What are the main factors influencing investment decision of buyers when investing in Dubai residential real estate market?
  • What is the degree of home bias within the expatriate population of the emirates? And as this directly affect the level of investment within the residential market, the research will explore
  • If change in regulatory policies such as investor protection laws, bankruptcy laws, relaxed residency rules, etc. will effect in increased ownership among expatriate population?

  • 14,000 words – 50 pages in length
  • Excellent use of literature
  • Good analysis of subject area
  • Well written throughout
  • Includes questionnaire
  • Ideal for real estate management and development students

1 – Introduction and Background
Understanding the Market – Geography of Dubai
Residential Market Overview
Structure of Residential Market
Types of Residential Investors and Investment Summary
Recent Performance
Research Basis and Importance of This Study
Major Players in Dubai Real Estate Market
Statement of Problem and Gaps
Research Questions
Research Aims and Objectives

2 – Literature Context and Justification
Empirical Studies
Hans (1996) Questionnaire Survey
Chin Et Al (2006)
Studies Undertaken On Macro-Economic Factors
Heidi Falkenbach 2009
Karsten Lieser and Alexander Peter Groh (2011)
Other Economic Factors
Tom G. Geurts and Austin J. Jaffe (1995)
Conclusion of Studies Related To Macro-Factors
Home Bias Factor Affecting Investor Decision
Micro Factors Affecting Investment Decision
Boris A. Portnov, Yakov Odish and Larissa Flieshman (2003)
Tom Kauko (2003)
Richard Reed and Mills (2007)
Behavioral Factors
Thaler (1997)

3 – Research Methodology
What Is Research?
Quantitative Research Approach
Qualitative Research Approach
Mixed Approach
Selecting an Appropriate Approach
Arriving at a Suitable Methodology for the Research Subject
Approaches Adopted In Previous Studies
Sample Population
Sampling Frame and Data Requirement
Research Method and Data Collection Approach Adopted In This Study
Secondary Research Tool
Limitation of the Study

4 – Data Analysis
Survey Details
Characteristics of Respondents
Respondents by Years in Dubai
Respondents by Their Position
Respondents by Highest Educational Qualification
Ownership Ratio Analysis
Factors Critical In Market Selection Process
Safety of Property Rights
Capital Appreciation/ Rental Returns
Government Policies/ Political Stability/ Market Stability
Liquidity of Residential Market
Market Information/ Transparency
Residency Rules and Other Factors
Market Efficiency – Investor Vs Property Consultants
Most Efficient Factors of Dubai Real Estate Market
Less Efficient Factors of Dubai Real Estate Market
Main Hurdles for Investment
Degree of Home Bias
Factors That Require Immediate Action

5 – Conclusion
Summary
Key Findings
Safety of Property Rights
Capital Appreciation and Returns
Residency Rules and Employment
Affordability
Transaction Cost
Home Bias

6 – Recommendations
Market Information System
Stronger Laws
Affordable Housing
Transactions Cost
Scope for Further Research

References

Appendix
Questionnaire

Dubai Residential Market and Investment Decisions Dissertation
Dubai Residential Market and Investment Decisions Dissertation

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