Ras Al Khaimah, also known locally as RAK, is rapidly emerging as the ‘new Dubai’; it is the most northerly of the United Arab Emirates and it is characterised by its stunning landscape, breathtaking mountains and the speed at which it is developing as an affluent centre for business and commerce in the GCC region. Having absorbed the most positive and salient points of Dubai’s blueprint for economic development, the government of Ras Al Khaimah is using the benefit of their neighbour’s hindsight and applying the best features of Dubai’s emergence to their own grand plans for the establishment of Ras Al Khaimah as a leading commercial, tourism and real estate hub in the region.

One of the very first features of Dubai’s development that Ras Al Khaimah adopted was the right of foreigners to own freehold title to real estate in the emirate. However, His Highness Sheikh Saud Bin Saqr Al Qasimi who’s the Crown Prince and Deputy Ruler of Ras Al Khaimah was actually faster than his compatriot in Dubai when it came to the ratification of the law to support this right which he issued on the 26th of October 2005.

Ever since then it has been legal for foreigners to own freehold property within specific developments in RAK and receive a residency visa when they do so, and this has kick started a mini property revolution in the tax-free emirate that is predicted to continue developing apace.

Those who missed out on the now legendary 300% gains that Dubai’s first freehold property projects such as Palm Jumeirah witnessed for example, are backing the emergence of RAK as a leading real estate investment hub.

Some say the emirate will become an overflow for Dubai or a suburb of Dubai; after all it is now possible to drive from one to the other in under 45 minutes thanks to the completion of the Emirates Road. Ras Al Khaimah is also a weekend retreat for those who live and work all week in fast paced Dubai and who like to escape to the calmer atmosphere of the more picturesque and laid back northern emirate. However, RAK has a feel and a flavour all of its own, it stands alone as a residential, commercial and even a tourism hub, therefore it is far more likely that Ras Al Khaimah will fulfil the government plans for it and become a leading commercial centre in the GCC region.

Ras Al Khaimah’s property prices are currently running at around 60% of those in Dubai, and the lower price for real estate in the emirate is in part based on the fact that it has yet to establish itself on the global stage economically speaking, but also in part because more than three quarters of the cement produced in the UAE actually comes from RAK. This means that developers in the emirate can maintain lower construction costs and therefore maintain their competitiveness.

In terms of the prospects for Ras Al Khaimah’s future economic development that may support a property investor buying in to the region, the government is doing all it can to diversify the economy successfully, create a location of equal but also varied appeal to Dubai in the GCC region, and to build the infrastructure necessary to support a significant expansion of the population. It is expected that their plans will take at least 10 to 15 years to come to fruition, during which time prospects for the property market have been deemed positive by many industry experts.

So far the government has backed projects to expand the RAK Free Trade Zone for example; with the inclusion of the Media Free Zone and Film City as well as the IT Park project it is expected that the RAK Free Trade Zones will attract not only spill over business from Dubai’s, but bring new businesses to the UAE. Population growth in Ras Al Khaimah is expected to reach 750,000 by 2020 from circa 250,000 today, pushed up by professional migrants moving to the emirate for employment opportunities. And the government is also behind massive plans for the development of a high returning tourism industry in RAK. Visitor numbers to the emirate rose by 40% in 2007 compared to 2006 for example, and the target for growth is 2.5 million visitors annually by 2012.

All of these facts have a direct bearing on the demand for housing and accommodation in Ras Al Khaimah, and it is a further fact that the amount of real estate available in the emirate today is nowhere near enough to support such targeted growth. There is clearly a situation emerging in RAK where demand for property may outstrip supply, at which point, if the emirate continues to follow Dubai’s blueprint for emergence, real estate prices will increase at a much faster rate which bodes well for investors and lifestyle home owners. Finally, a structure plan is in place for the southern areas of Ras Al Khaimah as well, this addresses everything from the essential infrastructure considerations of supporting a rapidly developing population, to issues such as land use, resort and property development planning, stimulating economic growth, building essential housing, transportation and tourism development. It is clear therefore that the government of the emirate is determined to achieve absolute diversification of the economy away from oil and create a living environment as attractive as the natural environment, which is excellent news for anyone thinking about buying property in RAK to live in or as an investment.

Note, the property purchase process in Ras Al Khaimah is straightforward, although it is recommended that buyers always employ their own independent legal representative to act on their behalf. Finance for purchase is an avenue being explored by RAK Properties which is a government backed developer permitted to construct and sell freehold real estate in the emirate, and just like in Dubai, Ras Al Khaimah is a capital gains tax free destination.