I have lived in the UAE for seven years and seen the markets rise, fall and rise again. Despite these fluctuations I am now considering buying in Dubai thanks to a nest-egg I have built up. I can't decide between an apartment and a villa. Which is the better investment in the current climate? ZAM, Dubai
The Dubai property market is on an upward curve in terms of prices. How long this continues cannot be predicted. However, there are several factors that point to a continuation of this sentiment, at least for the short to medium term. Dubai is positioning itself as a tourist hub. The expansion of high quality hotels and resorts, together with retail and leisure infrastructure, is on the increase and will make Dubai a very attractive destination to live, work, holiday and play alike.
Choosing an investment, whether it be an apartment or villa, can take time as there are a variety of options to consider. Always begin with preparation. Ask yourself, who you are targeting, is it families, couples or individuals? Will the investment be for the long, medium or short term? Consider all kinds of developments that already have or will soon have attractive projects nearby or among them. This will likely bring tourists and residents alike to the area.
Look for transport links such as the Metro or Tram. What retail/shopping facilities are there? Preferably recreational facilities should also be close at hand. Developments near to the beach or with a view are always sought after.
The upkeep or maintenance of the property should also be considered as this will eat into your profit. A villa will generally have a garden to maintain that will add to the expense, but buying an apartment means that you will be at the mercy of the managing agents/developer as to how the tower is maintained or run. Therefore if considering an apartment, look for one that is well run, preferably by the residents as this will ensure value for money.
Deciding on a property investment is clearly a personal choice but with Dubai at the beginning of such exciting times ahead, can only mean that either investment will, most likely, bring the investor good returns in terms of rental income and capital appreciation.
One of the main drivers of this positive sentiment is whether Dubai will host the Expo 2020. The host city will be announced in November. Dubai appears to be in the driving seat and, if successful, the next seven years will see a concerted push to complete previously announced projects that will place the city firmly on the world map.
These are exciting times and my advice to any investor of property is to consider the points listed above, but once decided, proceed to conclude any transaction.
Whether a villa or an apartment, it should bring the investor excellent returns in the short/medium term. As to whether to buy a villa or apartment, if asked, I would presently opt for an apartment in Jumeirah Beach Residence (JBR) or Dubai Marina. This location in the new Dubai is, in my opinion, set for attractive returns in the short/medium term. My reasons are as follows:
1. The Al Sufouh Tram system is due for completion in December 2014. This will bring yet another mode of transportation and will link seamlessly up with the metro system. This tram line will appeal to residents and tourists alike.
2.More retail and leisure facilities are scheduled for completion towards the end of this year at The Walk in JBR. The Beach development by Meraas will add to an already popular destination with extra shops, cinemas, and food and beverage (F&B) outlets.
3.Another development by Meraas to bring focus to the Marina and JBR is the Jumana Island project. This man-made island just off the JBR coastline will have more retail, leisure and F&B facilities and will be the home of the world's tallest Ferris wheel.
4.The location of the Marina and JBR also lends itself to being easily commutable to Abu Dhabi.
5.The new Maktoum International Airport and home to the Expo 2020 exhibition is close to the JBR and Marina area and will also open up further opportunities.
The above are some of the reasons why any well thought out property purchase will not fail to deliver the returns an investor is looking for. One last point to consider is the exit strategy. Unless the investor wants to hold onto the property forever, then when to sell is another consideration. Timing is everything and the sale price will determine whether the investment was a success or a failure.
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 mario@prestigedubai.com
