A flat in Dubai will cost less than one in Bandra!

A house in the world's tallest building with the who's who from around the globe as your neighbours is no longer a distant dream.

After all, a flat in Burj Khalifa, the 829.8 metre tall skyscraper in Dubai, might cost less than what a flat of the same size would cost in upscale Bandra in Mumbai.

Dubai is the new destination which several Indians are homing in on. Mumbai-based exporter Dinesh Shah is one of them. He was scouting for a house in Mumbai when someone casually suggested: "Forget Bandra, look at Dubai."

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At first, Shah didn't give it much thought. But later, when he researched a bit, he found that a three-bedroom apartment in Bandra would cost him Rs 4-5 crore (Rs 40-50 million), while in Dubai he could buy something similar for almost half the price - and enjoy better amenities

Till 2008, Dubai was beyond the reach of most urban Indians - even those who could easily afford a home in London or Singapore. But the 2008 economic meltdown changed things.

Till last year, a 500-sq ft studio apartment in Burj Khalifa was available for as little as Rs 1 crore (Rs 10 million).

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"Things have changed now," says Mohanad Alwadiya, managing director, Harbor Real Estate, Dubai. Though property prices are heading northwards again in West Asia, a house in Dubai continues to be well within reach.

"If we look at the current trends in Mumbai, Delhi, Bangalore and some other [Indian] cities, investing in property in Dubai is certainly attractive," says Santhosh Kumar, CEO-Operations, Jones Lang Lasalle, a real estate consultancy firm.

Neighbourhoods like Jumeirah, Downtown Dubai - where Burj Khalifa is located - and Marina are among the country's most popular and upscale locations.

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Both Downtown Dubai and Jumeirah have apartment blocks. But Jumeirah, which overlooks the Arabian Gulf, scores for being closer to the beaches. A 1,500-sq ft apartment in Downtown Dubai costs Rs 3-Rs 4 crore (Rs 30-40 million).

Sheikh Zayed Road, the new residential-cum-commercial area, which doesn't offer much of a view, has 1,500-sq ft apartments priced at about Rs 1 crore-Rs 1.5 crore (Rs 15 million) - cheaper than what you get in Mumbai and Delhi suburbs.

A fully-furnished 1BHK (bedroom-hall-kitchen) house in Dubai's Sports City is available for as low as Rs 60 lakh, says Alwadiya. 

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Alwadiya says there are two kinds of buyers who look for houses in Dubai: those keen on apartments in high-rises and the ones who want a luxury villa.

While the market for apartments has seen a decline, the demand for villas has gone up in the last one year, he adds.

Three-bedroom villas in the Umm Suqeim and Al Khail areas start at Rs 4.5 crore (Rs 45 million). The super-luxury villas at Palm Jumeirah can cost more than Rs 15 crore (Rs 150 million). 

A senior executive at Dubai-based construction firm Emaar says Dubai is one of the most-preferred destinations for Indians because the quality of life is better and its infrastructure is streets ahead of India.

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It's also more cosmopolitan as compared to some other countries in West Asia. A study by Real Estate Investment Promotion and Management Centre at the Dubai Land Department found that Indians ranked number one among foreigners buying property in Dubai.

The study, conducted in August 2012, revealed that Indians had bought about 2,173 properties at an estimated cost of Rs 5,670 crore (Rs 56.70 billion).

The study further said that the total value of real estate transactions exceeded Rs 95,380 crore (63 billion dirhams) during the first half of the current year - 21 per cent growth over the same period in 2011.

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It was in 2002 that Dubai first opened its doors to foreign investment in real estate by granting freehold ownership rights. In the next five years, as infrastructure development accelerated, property prices soared.

Realtors believe that between 2004 and 2008, the market was driven purely by speculation and hence the prices were inflated.

From 2007 to 2008, Dubai markets saw prices increasing by as much as 80 per cent. But after 2009, they declined by 60 per cent.

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Now the prices are seeing a gradual revival, though, promising good returns over the long term.

In Delhi, the value of a property increases by about 15 per cent per annum. Alwadiya says property transactions in Dubai in the first half of 2012 have seen an increase of 50 per cent as compared to 2011.

Lawyer Rohit Kochchar, who has offices in Dubai, Singapore and London, has also bought a house in Burj Khalifa.

"It's a matter of pride and a status symbol to live in the world's tallest building," he says. He, however, doesn't reveal how much he shelled out for his apartment.

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Film stars, businessmen and high net worth individuals are among the top buyers.

Actors Shilpa Shetty and Mohan Lal reportedly own property in Burj Khalifa. Shah Rukh Khan is said to own an island on Palm Jumeirah, as do David Beckham, Brad Pitt and Angelina Jolie.

Bankers, professionals and lawyers are also investing, says Majid L Rashid, a real estate agent in Dubai. They prefer to stay in suburbs like Mirdif, Oud Metha and Rashidiya.

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Real estate consultants' advice is to opt for a "realty package" where you get to spend two-three days in Dubai and survey the properties.

While buying high-value property, one should ensure that no foreign exchange rule is violated.

RBI permits investment of up to $200,000 per annum. Also, ensure that the broker is registered with Real Estate Regulatory Agency.

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You need four main documents: a copy of your passport, proof of income for six months, bank statement for six months and credit history for 36 months.

A buyer has to pay 1 per cent of the property price to the Dubai Land Department as registration charge.

Loans are also available, but only for properties that have been constructed. The interest rates are higher at around 10-11 per cent, says Rashid.