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Dubai has emerged as a global city and business hub, attracting expatriates from around the world. It is a melting pot of cultures; a brief walk around one of the many malls and you are likely to hear numerous languages and see the traditional wear of several countries.
Many come to Dubai looking for opportunities to grow their career, most with an initial plan to spend just a couple of years in the region before moving back home or to another country. Time flies in a city that never sleeps and those two years suddenly turn into five and then ten.
During their stay, expatriates tend to rent property rather than purchase. With the one-more-year mentality, they accept the annual rise in rents, and as their families grow the rent commitment increases from a one-bedder to a two-bedroom apartment or even a villa. Over this period, rental money could be more wisely invested in a property, representing a valuable asset that can be sold or rented out in the future. With low interest rates, monthly mortgage repayments are typically lower than monthly rents on comparative properties.
Dubai might not be everyone’s first choice for property investment, with many questioning the stability of the market, lack of legal structure and inherent risks, in addition to their transit lifestyle and lack of commitment to permanent residency in the region. However, in more recent years the regulations implemented by the government and the UAE Central Bank have given buyers more confidence to purchase property. Preventative measures seem to have been put in place to avoid a market bubble burst.
Shift to off-plan
Prices have dropped from peak figures in the second quarter last year and with the significant amount of offplan developments launched in the first half this year, buyers have more choices and a stronger negotiation power. In addition, with the vast array of options available in multiple locations, buyers are taking more time to make their decisions. We have seen a slight shift in transactions towards the off-plan market, away from the secondary market in the second quarter this year as these launches target a buyer segment that was previously overlooked.
About 24 off-plan launches were recorded in the first half of the year, 19 of which were released during the second quarter. This resulted in about 7,900 units added to the 1,781 units released in the first quarter, all set to be delivered over the next
Some developers have been diversifying the development mix within their portfolio, with some entering the upper-mid market, a segment previously neglected. These types of properties meet the demand of those buyers who are keen to purchase property in Dubai but could not previously afford the expensive price or payment plans.
These developments are also extending the borders of the city inland and away from the current central locations. As it has been evident from previous years, the centre of Dubai has been constantly changing, from Deira to Dubai Marina, then Down