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- I am concerned about the risks involved in purchasing an apartment, particularly with regard to my rights if something should go wrong.
Laws have been introduced to better protect the rights of industry participants. These include measures to standardise and clarify the relationship between parties to a real estate agreement and provide recourse when a party has been disadvantaged because of unethical behaviours or practices. There has been a lot of progress made in other areas as well such as the management of investor finances with the introduction of escrow accounts; owner empowerment with the introduction of strata law and introduction of owners associations; investor recourse when disadvantaged by delays in handing over of projects or changes in specifications of properties; or tenant protection with the introduction of mechanisms to restrict the imposition of ridiculous rent hikes.
- I am looking to buy an apartment in Jumeirah Lakes Towers or the Dubai Marina area. Do you think it is a good time to buy? Any recommendations?
It is definitely a good time to buy right now. The market has corrected well for buyers and there are some fantastic easy payment schemes on offer. One example of an extraordinary payment plan is that which is being offered in Dubai Marina. Some two-bedroom apartments in the area are being offered with prices starting at Dh2,150,000. All you need is a 10% deposit and you can pay the balance in pro-rated monthly installments over the ensuing seven years with no profit charges applied to the balance.
Meanwhile, Jumeirah Lakes Towers is also a sought-after destination for residents and tenants because it is known to provide various housing options that offer affordable rates. It likewise has the huge advantage of being close to the Dubai Metro and Dubai Tram, Dubai Media and Internet Cities, the business district and Dubai Marina.
- I have a young family and I am considering purchasing our first home. Can you provide any advice as this is the first purchase I am making.
Here are common factors to consider as a first-time buyer: 1) The real estate market is cyclical and home values do not always appreciate over time. Very careful planning is required if you plan to move in just three or four years; 2) You are much better off financially if you apply your hard-earned dirhams towards building equity in your own home, but remember that mortgage payments can be subject to fluctuations as interest rates rise, while rent increases are governed by law; 3) Avoid making lifestyle sacrifices by choosing a home and a mortgage that suit your budget; 4) Factor into your decision your family requirements in the future; 5) The Dubai market today is a buyer's market. If you have done your planning properly, you should be in a position to make a quick decision.
- I am looking at expanding my business by establishing several branches around the city. What should I factor into my planning?
It is all about the convenience and prestige that a carefully thought-out location can bring to your existing and potential customers, staff and business associates. Location is critical to establishing a competitive advantage. There is no use having a superior product or service if your location is inconvenient for your customers. The same can be said for the staff. Proximity to public transport and parking availability reach new levels of importance when summer reaches its peak and staff will be appreciative if you recognise their needs as well. Taking advantage of a prestigious location can do wonders for your brand image. People naturally gravitate towards successful enterprises and a prestige location can help send the message that your business is successful, strong and superior to the others located in lesser environs. Business associates will also be eager to visit and do business with you.
- Question of the Week: I am thinking of diversifying my property portfolio by buying some commercial assets. Any thoughts on this would be appreciated.
Things are looking very promising for new business in Dubai. As the emirate seeks to grow economically, readily available office space is one of the important factors that new enterprises will consider. A few points to keep in mind:
• Dubai's economic growth is strong at around 4+%, driven by tourism and trade. New projects to expand these revenue-generating economic sectors are a feature of Dubai's growth outlook.
• The amount of infrastructural, development and economic initiatives, culminating in the hosting of the Expo 2020, is indicative of the government's commitment to economic progression.
• Population growth is forecast to be between 5% and 7% going forward and, by some estimates, is considered to be conservative.
• Business establishment costs, including the cost of capital, have been at their lowest for years.
Office rental returns are staging a recovery. There is a relative shortage of Grade A, large floor-plate, single-owner space favoured by large companies. This represents strong investment potential. But, there is still a considerable, albeit shrinking, vacancy rate of around 23% which represents good opportunities for value purchases providing strong cash flows increasing with Dubai's economic momentum over the longer term.
Find out why you should invest in Dubai
Source: Mohanad Alwadiya, Special to Freehold
The writer is Managing Director - Harbor Real Estate
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