Dubai

Dubai is one of the seven emirates that compose the Unite Arab Emirates (UAE), sitting on the coast of the Persian Gulf.

Not so many years ago the area was a small fishing community with a speciality in pearl fishing, but it is now a major international business hub and a top ranking property hotspot.

The population is growing rapidly and is expected to increase from the present level of 1.67 million to 3.5 million by 2010.

Expansion

Approximately 800 new international residents set up home in the emirate each day, meaning demand consistently outstrips supply and ensuring the property market remains buoyant.

Following a decision by Sheikh Mohammed bin Rashid Al Maktoom foreign nationals were allowed to buy property in Dubai for the first time, opening up the region to international property investment.

However, there have been a number of draw backs when looking to purchase property in the emirate. Free-hold ratification can take a great deal longer to acquire than in the UK for example, and local laws make obtaining mortgage credit a headache.

Finance

Yet, Barclays bank, among others, has lead the way in resolving these issues, offering mortgages in Dubai from a London base, thus allowing finance to be sought in the domestic market for investment overseas.

Residential investors are drawn to the emirate by its first-rate healthcare system, top-notch education, excellent location for business and leisure travel.

It also has the world's largest airport and a collection of world famous buildings and residential developments, including the Palm Islands – the world's largest collection man made islands.

There is also no corporate, personal or sales tax in the emirate, attracting investors from all over the globe.

While there are over 300,000, mainly luxury, apartments expected to come onto the market in the next four years, demand is outpacing supply, forcing prices higher.

While luxury property is well catered for, it is the smaller, two and three-bedroom villa properties and mid-range apartments which are in short supply in the country.

Cheap prices do, however, make investment attractive.

According to overseas property specialists Shooba, property is five times cheaper than London, making it an ideal investment opportunity, and can increase in value by 30 per cent during construction alone.

Rental yields average between seven and 11 per cent, but can increase dramatically on that figure for top-end properties.