Having witnessed first an escalating market and then a property crash, a reader wonders if it is the right time to finally take the plunge.
Homefront: is it wise to buy a property in Dubai?
I have lived in the UAE for 10 years and have always rented. When people find out how long I have been here, they raise their eyebrows and exclaim: “Why haven’t you bought here?” When I first arrived I wanted to buy but the prices were crazy. Then when the market crashed, I thought my hesitation was justified. Now, as it goes up again, I wonder have I missed out? Is it too late to make a gain from investing in a home now? Z R, Dubai
If only we had a crystal ball to predict when the right time to buy a property would be. Some people seem to have a knack to it, while others always seem to lose their shirt. The reality is all about doing your homework and calculating the facts. Yes, on the face of it, it would appear that you have missed the boat as prices have increased by more than 30 per cent this year. Timing has everything to do with it but I believe that you still have time to gain further from your investment, if you take the property plunge sooner rather than later.
Recently there have been discussions about whether Dubai’s property price hikes are the start of a bubble. I believe that the market this time around has different fundamentals than in 2004 to 2008. The buyers this time are more end-users rather than just investors. New laws are in place now to protect the buyer and spending on infrastructure is at an all-time high. This is not to say that prices will not fall again, because obviously they will, but if Dubai continues to improve the systems of regulations and laws and keeps a close eye on its market then, while a fall in prices is an inescapable part of the business cycle, hopefully we can avoid a crash landing.
I recommend that you select developments that have attractions going for them in terms of amenities, facilities and potential touristic appeal. Buy the investment for the same reasons as you would buy a property to live in, this way you are guaranteed to always be able to rent it whether the market is rising or declining.
• Look for infrastructure – is it near a metro or tram station, are there good vistas from the property such as water or green views over a park or golf course?
• How is the building/tower or villa maintained? Look at the common areas, the community swimming pool and/or gymnasium. Do they look appealing and are they kept clean?
• Lastly, keep an eye on maintenance fees. These are also a major factor in your decision as they will eat into your profit, so pick a development that does not take all your money and is well run, perhaps by the owners’ association.
With more and more money being spent on transport infrastructure, such as extensions to existing metro and tram systems, improving road connectivity, the pan-GCC Etihad Rail project in the pipeline and the world’s largest airport on our doorstep and about to open to passenger traffic this month, no wonder there is positive sentiment all around.
Finally let’s not forget about Expo 2020. Late next month, we will come to know who will be chosen as the host city. Dubai appears to be in the driving seat for this showcase, which if successful, will bring a huge shot in the arm in terms of boosting the economy, tourism and put the emirate on the map even more than it already is.
I would therefore conclude that you still have a great opportunity to make money on any property investment purchase … just don’t wait too long.
Mario Volpi is the managing director of Prestige Real Estate in Dubai and has worked in the property industry in London and Dubai for the past 29 years. Send any questions to firstname.lastname@example.org