Expert Eye: A tide of buyers in Dubai realty market

Expert EyeRakesh Mirchandani

It isn’t overly optimistic to say the tide is high in Dubai’s property market right now – and it’s washing ashore some attractive opportunities for seasoned investors and first-time homebuyers alike.

While buyers have been skeptical of the overall economic volatility due to the record-low oil prices, the real estate market is proving its own mettle. The Dubai Land Department released numbers stating that real estate transactions surpassed Dh267 billion across over 63,000 transactions in 2015, an 8 per cent increase compared to the year before. In this bittersweet situation, experts say it continues to indicate a lucrative buyer’s market and outline reasons to support that claim.

First off, there has been a reported slackening of demand since Q4 2015. The slight dip in demand has led to a dip in prices. To hold on to the optimistic figures reported last year, developers are beginning to offer exceptionally attractive payment plans and other incentives to buyers. For instance, a first-time buyer might strike that perfect deal in the market as it stands today, with mortgage interest rates and products so attractive that monthly payouts are almost at par or sometimes even less than the receiving rent.

     See related story: Dubai's realty can navigate past oil price slide

That leads directly into rental yields: yes, they stand high and stable, and are likely to see only slight fluctuations. An investor that is looking to lease out purchased property would essentially be buying low and leasing high – a very favourable situation.

Another positive is that a buyer in Dubai today is comfortably spoilt for choice. Master and other well-known developers are offering a wide range of investment options to both global and local investors, seasoned and first-timers alike. The diversity in their offerings makes real estate shopping an exciting prospect for buyers the world over, especially when price tags are displaying friendlier figures and payment options.

The current buyer’s market might, however, look at taking a slight turn in the near future. With the Expo 2020 approaching, the city is moving into high gear with development plans and is expecting a large influx in relation to the commercial activity that the event brings with it. A spike in demand is expected to accompany this influx, which still makes now a good time to buy and, perhaps, the spike a better time to sell.

     Look back: Dubai Expo 2020 - First milestone in six-year journey
Dubai’s real estate market, although currently volatile, has turned into a safe and mature space for investments. Developers are tuning into the city and its people’s demands, while balancing global investment interests and giving rise to a healthy ‘there’s-something-for-everyone-here’ position, reflective of the city’s comfortable diversity.

In the past year, there has been a slowdown in the luxury segment and primarily the focus has turned towards the “affordable” segment. Investing in the “affordable” segment may not be as lucrative in profitability but surely it is sustainable and does offer a good net operating income. We believe that the property prices in the “affordable” segment cannot go lower than where they are at today.

An article published just recently in reference to “affordable housing” and the launch of DP’s first phase of Bella Casa at Serena states the “intense demand” from buyers has resulted in clients and investors “queueing up from early hours of the morning” to eventually be sold out.

There has never been a better time to take a plunge into the real estate space – good options, great opportunities, the right deals and the right advisors are available to guide you through your first or your next investment.

Source: Rakesh Mirchandani, Special to Freehold
Director, KGR Real Estate


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