Looking for a home in Dubai? From stunning golf villas to immaculate seaside properties to spacious and contemporary styled apartments overlooking iconic landmarks such as Burj Khalifa, buyers in the UAE have plenty of options to choose from.
However, the question remains: Is this a good time to invest in property or can we expect house prices to further drop in the future?
In a recent property market outlook for 2017, real estate consultancy Clutton’s forecast a decline across all sectors in Dubai real estate — an indication that the market is stabilising. Prices are expected to bottom out this year before the effect of Expo 2020 starts to filter into the market.
That’s why Irishman Darragh Gallagher, 41, is looking to buy an apartment in Dubai. “Now is absolutely a good time to buy property in the UAE. Property prices have reached rock bottom and as a homebuyer I have quite a few options to choose from.”
As a financial consultant who works with expat clients, Gallagher knows quite a few people in his circle who are sitting on the fence to see if prices drop further. “Ithink the upcoming Expo 2020 will see prices and demand for mid-range properties rise as peopledo not want to spend onfancy, high-end properties but are more likely to look for a reasonable options
to buy and live in.”
Seasoned investor
So, is buying a home a good investment? Like any investment, the question comes down to the opportunity cost of your capital — in other words, what else can you do with your money? Buying a home or investing in stocks and bonds are some of the options to earn risk-adjusted returns but it all depends on an individual’s appetite.
British expat Alex George, 49, is a seasoned property investor in the UAE who has been buying and selling real estate for the past ten years. George is currently looking to invest in new developments in a market he believes is flooded with properties and insufficient buyers. “I expect a decline of another 5-10 per cent on prices in 2017,” he says.
“Investing in the UAE is a good decision for longterm growth.” Prices in established areas such as Downtown have begun to stabilise, although newer areas such as Al Furjan, and Jumeirah Village Circle and Triangle could see price rises as developments are completed, residents
move in and communities become established.
“It is essential for master developers to fully complete projects if they want investors to commit future funding,” explains George.
Offset rent
Others look to buy in a bid to offset rental rates. Indian national Abhishek Modi, 37, believes living in his own apartment for five years will leave him in profit even if he eventually sells the two-bedroom unit in the Greens at the purchased price.
“I was looking for an apartment in the Greens as it’s an established community and would be great for my family and me to live,” he says.
“I had done my research and had a specific price range in mind, so initially when I started scouting for potential properties I realised that there was a shortage of apartments in the market. I waited patiently for the right apartment to come along.”
He’s not alone. More than 80 per cent of resident respondents in a recent HSBC report who do not own their home now expect to do so in five years despite a complex market environment and low salary growth.
