Here's where you should buy property in Dubai and why

Here's where you should buy property in Dubai and whyImage Credit: Supplied

There have been numerous reports about how Dubai property prices compare with other global cities, but I'd like to take a look at what $1 million (Dh3.67 million) buys you today in some of our most popular freehold residential developments.

The industry has experienced a decrease in the number of sales transactions in the residential market since mid-2014, with November through to January at a 20-month low, but more noticeable is the fall in prices since November, averaging around 10 per cent to date. This, of course, has come off from a peak in the middle of last year up until which point price increases of 40-50 per cent had been recorded since 2011, so it's no bad thing.

Does it make sense for end users to buy now with their hard-earned cash? We are seeing a lot of interest from expat families and young professionals who are confident that they will reside in Dubai for the next three to five years and don't see why they should be paying exorbitant rents.

Moreover, corporate expat packages are harder to come by, and an influx of foreigners into Dubai for a better lifestyle and prosperity will fuel the trend of first time buyers. Not only does $1 million have a nice ring to it but it is also an achievable price bracket for many middle-income earners. And in doing basic calculations, it is clear why you should buy.

We look at how affordable it is to buy instead of renting, and the benefits of being an owner-occupier, using an interest rate of 3.9 per cent and repayment term of 25 years for ease of calculation.

Arabian Ranches

One of the most popular villa developments is Arabian Ranches, which became famous when the Jumeirah English Speaking School opened in 2005. The gated community has excellent facilities and its vastly improved infrastructure allows easy access to Downtown Dubai and Dubai Marina. Alma is a town house subcommunity handed over in 2009. Within walking distance of the golf course and clubhouse, it has a shopping centre on your doorstep.

Community facilities include swimming pools, tennis courts and children's play areas, and Dh3.6 million can buy you a three-bedroom semi-detached town house spread over 2,788 sq ft with a study and servant quarters — ideal for a young family — and plot size of around 4,000 sq ft.
* Rent: Dh215,000 a year or Dh17,917 a month
* A mortgage of 75 per cent would require a down payment of Dh900,000 plus Dubai Land Department (DLD), mortgage and agency fees of nearly Dh265,000
* Monthly repayments would be around Dh14,000
* Price per sq ft: Dh1,291

Jumeirah Park

For those who are not really inclined towards a mature development and well developed amenities, take a look at the emerging community of Jumeirah Park, which was handed over in 2013. Prices increased at first and then remained fairly stable since residents started to move in, but the wider area is still under development. The location will become very central with time and retail centres will come up, but there are limited facilities for now.

However, what it lacks is made up for by the space you'll get when compared to Arabian Ranches. Dh3.6 million will buy you a three-bedroom villa spread over 3,065 sq ft with servant quarters and a plot size of around 5,500 sq ft.
* Rent: Dh220,000 a year or Dh18,333 a month
* A mortgage of 75 per cent would require a down payment of Dh900,000 plus DLD, mortgage and agency fees of about Dh265,000
* Monthly repayments would be around Dh14,000
* Price per sq ft: Dh1,175

Downtown Dubai

For city lovers the most popular apartments are in Downtown Dubai — the centre of commerce and the city's premier zone. The magic words, location, location, location, represent its proximity to hundreds of retail outlets, restaurants, the financial district and Burj Khalifa. Dominated by Emaar projects, real estate here is high-end with a hefty price to pay for its decadent and lavish lifestyle.

The first buildings were handed over in 2007 and the following years saw the community mature. 29 Boulevard was one of the latecomers in 2013 but its location is one of the best — right on the boulevard — and it offers excellent amenities such as a swimming pool, gym, games room and play area.

With 45 floors and 642 apartments, Dh3.5 million can buy you a two-bedroom apartment facing the Burj Khalifa on a high floor, with an area of about 1,300 sq ft. Practically laid out with an open kitchen, sizeable bedrooms and a balcony, it makes for a great base for a young professional couple.
* Rent: Dh170,000 annually or Dh14,167 a month
* A mortgage of 75 per cent would require a down payment of Dh875,000, plus DLD, mortgage and agency fees of around Dh258,000
* Monthly repayments would be around Dh13,700
* Price per sq ft: Dh2,692

Palm Jumeirah

Some prefer a beach lifestyle and Palm Jumeirah has remained a prominent choice for not only second homeowners but also owner-occupiers. Its prices have been key indicators, leading the way when any adjustment takes place. Today one can get great value for money from the Shoreline apartments, which provides beach club membership and access to the many restaurants on the Palm.

Handed over in 2006, it has 20 buildings and 2,600 apartments, and Dh3.5 million will buy you a three bedroom well-proportioned apartment — suitable for a family in an idyllic setting — with servant quarters, on the right hand side of the beach, and an estimated area of 2,200 sq ft.
* Rent: Dh200,000 per year or Dh16,667 a month
* A mortgage of 75 per cent would require a down payment of Dh875,000 plus DLD, mortgage and agency fees of Dh258,000
* Monthly repayments would be around Dh13,700
* Price per sq ft: Dh1,591

Clearly a significant lump sum is needed to climb the property ladder and the UAE Central Bank regulations announced in October 2013 that raised the deposit requirement from 15 per cent to 25 per cent went some way in slowing down the volume of transactions. It was a cooling measure to stop the market from overheating, but shouldn't it have considered the genuine first-time buyer and owner-occupier? The consensus is that it should have and we hope to see some relaxation of these rules in the future.

On a more positive note, owning a property gives you the freedom to make improvements and upgrades that benefit you — particularly in older properties where the finishes are tired and not of good quality. It is becoming more commonplace to find newly installed kitchens, bathrooms and floors, which make the home that much special for its inhabitants and attractive to potential buyers.

So is it value for money? Well, in one of the world's greatest cities with an amazing future ahead, surely it's better to invest in buying property than line someone else's pockets?

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Source: Helen Tatham, Special to Property Weekly

The writer is Managing Partner of Prime Places Real Estate, a boutique agency in Dubai. She was Director of Residential at Knight Frank and has been an observer of real estate trends in the UAE for more than ten years


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