Property expert Mario Volpi takes a look at Dubai's best areas and projects when it comes to making an investment in a one-bedroom apartment.
The best areas to buy one-bed apartments in Dubai
I am looking to buy a one-bedroom apartment in Dubai (in the next one to two months) and would apreciate your advice on the best areas/projects to invest in, in terms of potential capital appreciation. My husband and I plan to put our entire savings in this and also take on a hefty mortgage loan, so this is a big decision for us. AK, Dubai
One-bedroom apartments are probably the most sought type of apartment in the UAE, and nowhere more so than in Dubai. They appeal to investors and owner-occupiers alike. You will be one of many people chasing the same product, so you must be ready to jump when an opportunity arises.
First, speak with your bank or a specialist mortgage broker. Going directly to your bank for finance is quick and relatively easy as you are an existing customer. You should be able to get pre-approved in two days. The downside is that you will be governed by the bank’s products only. Using a mortgage broker will give you a wider choice of products and should in the long run save you money.
You say you are after an investment with emphasis on capital appreciation. Properties anywhere in Dubai will rent easily, so choosing an area that will continue to increase in value will depend on what expenditure is going on in that area. The key is to find a zone that is not already too expensive. This is difficult, as the whole of Dubai has seen experienced increases amounting to approximately about 30 to 35 per cent since last year. I would suggest four areas for you to look at. For the purpose of this illustration I will advise on ready properties only, not off plan.
This is mainly Emaar territory and home to world-class attractions such as the world’s tallest tower and largest mall. Properties here are very sought after and already, on the face of it, quite expensive. On average you would need about Dh2 million to buy a one-bedroom apartment, although there are still options as low as Dh1.5m. Emaar is probably the most popular developer for several reasons; it builds good quality units, it has come through the downturn relatively unscathed, and it delivers on its projects. Buying in Downtown would ensure that your rental income is good. With several projects in the pipeline, such as an opera house and an extension to The Dubai Mall, I see only good news for the area.
BB is sometimes regarded as the poorer relation to Downtown, but this location has a chance of good capital appreciation as it starts from a lower base.
Dubai Properties is the main developer, but the area has many other private developers too. Expect to pay about Dh1.5m as the average – however, properties can also be found under Dh1m. The area is being groomed as a fashion centre with many designers looking to set up base here but its location next to Downtown and having a metro station next to Sheikh Zayed Road ensures that BB will remain sought after among young professionals working in BB or the Downtown/DIFC areas.
Marina/Jumeirah Beach Residence
The Marina is another predominantly Emaar area, only this time other developers are also present, making for a diverse architectural landscape. JBR was constructed by Dubai Properties and has “The Walk”, which is probably the emirate’s most visited spot after the fountains at The Dubai Mall. The Marina and JBR are major contenders for capital appreciation thanks to all that is presently going on in the area. The Walk is having a massive redevelopment with the addition of “The Beach”. This is a retail heaven with new restaurants, cafes and high-end shopping, together with the construction of a cinema complex. Prices for one-bedroom apartments in JBR depend on the view (sea, marina or community) but start at about Dh1.3m-plus. Marina apartments average around Dh1.3m to 1.4m but can be found under Dh1m for lesser quality towers.
Nakheel is the main developer and has had difficult publicity regarding restructuring debts, and maintenance issues with non-payments by owners. Still, I think that the Palm will continue to appreciate. Proposed developments include the Palm Mall, which should be completed in 2016. This would bring much needed shopping/retail facilities to the area. The Al Sufouh tram will link up with the Palm monorail, which would open up the whole metro system to Palm residents. One-bedroom shoreline apartments start around Dh1.5m but with newer developments you could easily spend well over Dh2m.
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