I have a friend working out in Dubai for 10+ years. I saw a property I was interested in and asked him what he thought about property in Dubai and I've copied his reply here. It's a long reply, but there is some interesting reading here.
"The property market in Dubai has gone haywire in the last eighteen months. I'ts being described as a "frenzy" in the newspapers because of the amount of interest in what's going on here.
What's happening is that the market for the first time is allowing foreigners to own property here. They're given a residency visa as part of the deal and this suits a lot of TCN's out here (Third Country Nationals like Indians, Pakistanis etc.). A lot of Arabs are buying blocks of apartments and they remain unoccupied. It's just like a game for them seeing that they have a lot of money to play around with and they've never done this kind of thing before.
The biggest concern for an investor is the lack of a real estate history out here. This is new territory for the developers, lenders, banks, indivudual investors etc. so there are a lot of unknowns. That's why we feel out here that the risk is too great although there is certainly the potential to make a killing if we're proved wrong. I have met guys out here who have made a lot of money already with "off the plans" purchases. The authorities have copped on to this and last week it was announced in the papers that invstors must own the property for at least two years before selling on. This law was passed overninght and is part of the overall problem. You don't know what these guys will do next. They just appear to be making the rules up as they go along. This is high risk from an investment point of view in my opinion. I also read last week about some Pakistani investment that was offered ten years ago. They've now decided to change the status of the investment and not to go ahead with it as originally planned. The investors will only get what they put into it without any interest. Just another example of what could happen. Some people believe that things have changed and that the fututre is more certain than before. I don't agree, but that's where the gamble comes into play.
As well as that, there are only three major companies who are licenced to sell these properties. Emaar is the largest one and AL Nakheel (the one in your email) is one of the others. However, I have seen large advertisements taken out by these companies in the newspapers advising people to be careful about agents claiming to be working on their behalf. A lot of these agents don't have official permission to sell and I don't know if your guy falls into this category. It could be a real problem in the future if this is the case.
Regarding guaranteed return, this is the first time that I've seen this and I can't see how it will happen. That alone would make me suspicious !! They're predicting that the population in Dubai will double in the near future and that these people will need places to stay. This could happen, but most of the new arrivals will be TCN's working for small money so I can't see their companies forking out large amounts for accommodation. As well as that, the market for studio apartments would be aimed at these TCN's regarding renting. Since it's an unproven market, I would steer well away from it just for the moment. I'ts only my opinion and I could be proved wrong in the future, but that's the way I see it at the moment.
I've heard that they are pushing Dubai in Ireland at the moment. I think it's just part of the frenzy that's going on out here and that the background fundamentals don't justify the investment. These guys know that there's money floating around in Ireland, but most people don't know how the system out here works.
At the end of the day, it could be a great investment. The consensus amongst those I know (and who have bought properties before) is that it's a sort of Pyramid Scheme and time will expose the truth. Others feel that it's the opportunity of a lifetime and there's some truth in that depending on who you listen to. I suppose it's not the end of the world if you lost the deposit and take the gamble, but I'd research these guys more before doing anything."
This is just the opinion of somebody working in Dubai. He's not into property development, so there's no hidden agenda in his reply.