Whether or not to buy a home in the UAE is at the forefront of the thoughts of many expatriates and nationals alike
Your home is your castle, so choose well
Q)I just moved to Abu Dhabi and have been reading about people making a lot of money in the property market. I owned a home in England, but sold it before I moved, so I want to put my profits to good use. I will probably stay here for at least five years. My wife and I have three children, and I want to find a home near their school. Do you think now is a good time to purchase? A)Whether or not to buy a home in the UAE is at the forefront of the thoughts of many expatriates and nationals alike.
Rent is soaring by double digits each year, a fact that can dampen the thrill of a tax-free lifestyle. And as part of the crowd who arrived here relatively early, there is a feeling of wanting to profit alongside the enormous economic growth of the Emirates. The answer to this question is complicated. For most people in the world, buying an apartment or villa is one of the biggest single purchases of their lives. Apartments in Abu Dhabi are usually well above Dh1 million these days. That's not a small investment. Because of the seriousness of this investment, most property experts and brokers recommend that you buy a home if you plan on actually living in it, not just as an investment in which you never intend to reside. That way, no matter what happens to the market, you have a place to live. And like most markets, the long-term trend is gradually upwards, so if you are happy to live in your investment you will probably come out alright in the end.
A lot of investors, known in the market as speculators, have been taking advantage of low down-payment requirements on off-plan sales to buy multiple units and resell them quickly for a profit. This has worked well for some people, but it is an inherently risky venture, because if markets go south for any reason the resale market will dry up. Still, property can be a financially rewarding investment if you do your homework before you buy. For one, you should make sure it is fairly priced. Take a look at similar apartments in the same part of town; talk to multiple brokers; read up on the neighbourhood; and definitely evaluate the building's infrastructure, such as plumbing and quality of material. At the moment it seems that construction quality could use a lot of improvement, so ask your friends or colleagues who own property what their experiences with contractors have been, and try to find an apartment that was constructed - or will be constructed - by a reputable company. And in a place like Dubai or Abu Dhabi, always try to get a sense of what the neighbourhood will be like several years down the line. Is there a big tower starting construction next door that will ruin your view of the ocean? Will your living room windows look on to a parking garage? View comes immediately after location as a major factor in price.
Our forebears were not known for rapidly reselling their homes. They thought of them as something that would last decades, perhaps centuries. Think of the enormous estates in the world; those buildings have gained value steadily over time and are worth veritable fortunes now. Property can be one of the safest long-term investments around, but it is important to treat it as one of the biggest investments you will ever make. email@example.com