AUG 28, 2018 (BE2C2 Report): Dubai has seen prices softening since 2015. As a result, we believe we must be close to the bottom of the market, therefore this is an excellent time to invest.
What seems to have dragged down the property selling and renting prices are a mixed bag of local and international trends impacting the Dubai property market. Imposition of VAT on sale and purchase (other than properties) is one of them, besides global currency fluctuations.
Rents are down 30 per cent since 2016 and it will take two or three years before prices start increasing, several analysts said.
The country’s property slowdown is forecasted to run for a couple of years, as the government moves with several initiatives to bolster the economy. This has created an opportune time for bargain hunters though, as there will be a gradual uptick in real estate with Expo 2020 round the corner.
Three initiatives stand out to push the property market concurrently: Dubai’s goal to become renewable energy hub, a center of new Financial Technology (FinTech) and tourism magnet for the region. These moves are attracting investments and highly-skilled workers and professionals are expected to follow from all over the globe in droves.
UAE’s trilateral initiative — Renewables, FinTech, Tourism — is ahead of the curve in the MENA region. And, with the upcoming Expo 2020 achievement of the goal is expected to synergize the Emirate’s socio-economic ecosystem backed by concurrent upward swing in the property market driven by demand-supply dynamics.
Among established areas, Dubai Marina is one to look at now. This area is possibly the most sought-after and always has plenty of buyers and tenants seeking accommodation. It’s popular among the Dubai-expat community due to its proximity to the beach at Jumeirah Beach Residence and all the retail, hospitality, leisure and food and beverage outlets which are global brands. The transport network of roads and rails with the tram linking up to the Metro is an obvious draw.
Buyers and renters should also look at projects that are close to completion or handover, as many are offering post move-in payment plans, making it easier to spread your cost.
Buying at what can be described as being at the bottom of the market, will also ensure capital appreciation on your property in time, especially during this period of ownership leading up to 2020 and beyond.
Here’s the latest first half yearly (H1) 2018 buying and renting figures from property portal bayut.com. The downward trend is visible across the board — indicative of Dubai having become a buyer’s or tenant’s market now — and is expected to be so for the next 10 to 12 months.
As for rentals, landlords are at the mercy of the market today. It is definitely a tenant’s market, one where rents are coming down and where tenants are negotiating multiple checks than ever before. Some landlords are offering 13 months for the price of 12, just to entice the tenant to take their property.