Expert Eye: Stalling will get you nowhere; invest today

Freehold PropertiesMohanad Alwadiya

The oft-quoted proverb “Opportunity knocks only once” rings even truer when it comes to real estate. Others may argue that other opportunities will present themselves in the future, but will they be the same opportunities?

But what if they don’t, which is usually the case as far as opportunity in real estate is concerned? After all, land is not unlimited and a building or unit, once sold, won’t likely change hands many times when it is at its peak value.

Expertise derived from hindsight has no place at the table of successful people. They thrive on opportunities. If they cannot make one opportunity work to their satisfaction, they find another opportunity. Regret simply diverts focus from the pursuit of the next great opportunity.

     Investing in a diverse range

For those still on the fence about real estate investment, resolve to buy TODAY. After all, oil prices aren’t expected to go anywhere soon, the decline of the Russian ruble and the euro versus the US dollar has made offshore investing appear too expensive for many, there are reports of a growing oversupply and the inevitable interest rate increases on the US dollar, and its AED cousin, will only further hamper overseas investment and overall market liquidity.

While these are valid and worthy harbingers of the dreaded procrastination, we need to put our positive hat on for a while, and consider the following…

Dubai needs people to support an economy that is expected to grow at an estimated 5 per cent annually for the remainder of the decade and to deliver initiatives such as the Expo 2020. The Expo is expected to generate an additional 277,000 jobs and drive demand for housing and commercial facilities. Much of the city’s planning comprehends the number of people living in the emirate to grow to 3.4 million people by 2020, a 7 per cent annual increase from today’s population of 2.25 million.

While the price of oil is a big issue for the region’s economies, with oil representing only about 4 per cent of Dubai’s GDP, the effect of the decline is not as drastic as some may think. Dubai’s economy is being driven by tourism and trade, and new projects.

Dubai welcomed 4.1 million overnight visitors in the first three months of 2016, a 5.1 per cent increase over the same period last year, continuing a growth trend of 10 per cent per annum since 2010.

But the visitor numbers will seem paltry once the Expo kicks off. The extra jobs that will be generated to ensure the estimated 20 million visitors see Dubai in its most favourable light cannot be underrated in terms of generating significant demand for real estate.

Though the speculation surrounding the US Federal Reserve’s intention to raise interest rates is making people nervous, we can be sure that interest rates in the US will eventually rise and the AED will continue to get stronger. To invest in a market that is undergoing a 10 to 20 per cent correction in a currency that is certain to appreciate makes sense.

     What are the key trends to watch out for that will affect the UAE property scene this year?

There is no doubt that a stabilised real estate market will provide a better launch pad for a period of significant economic and commercial activity over the next five to seven years. The structural shift towards more affordable housing will not only serve to accommodate the expected population growth associated with the Expo, but also serve as an important factor in the development of the Dubai economy overall.

Still undecided? The opportunities that have come with 2015 and 2016 – the period of opportunity for the astute investor – will certainly never come again. Ask around for expert advice, conduct your own research, make the calculations and decide today, so you won’t find yourself scratching your head in disappointment five years hence.

Source: Mohanad Alwadiya, Special to Properties
CEO, Harbor Real Estate


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