Even during the boom time, statistics indicate Dubai residents tend to rent rather than buy. In addition, buying a home was out of reach for most residents as prices went through the roof.
However, the global downturn reversed the trend and brought the prices down, making many units affordable as never before. So, is this an ideal time to buy your own home rather than continuing to pay rent, which is basically a dead investment?
Property, in association with Jean-Luc Desbois, managing director of Home Matters, analyses whether it is a gain or loss for tenants, especially double income families, who wish to become owner-occupiers.
While the calculations clearly suggest it is a great time to buy, real-estate experts advise discerning property buyers to buy only if they are thinking long term. Clearly, rents give no returns, and paying more or less the same amount in the form of a mortgage every month will ultimately benefit you in terms of capital appreciation and rental savings, especially at current price levels.
Here we give a selection of properties that could fit the bill. These mortgage calculations are provided by Home Matters Mortgage Consultants. The calculations are based up to 25 years with interest rates ranging from 5.3 per cent to 5.99 per cent.
Saheel
- What: Villa with three bedrooms plus maid’s room
- Where: Arabian Ranches
- Premium rent: Dh180,000 per annum
- Purchase price: Dh2.5 million
- Loan-To-Value ratio: 80 per cent
- Mortgage payment: Dh144,528 per annum
- Savings: Dh55,476 per annum
- Maintenance fee: Not available
- Property’s verdict: For villa lovers, Saheel has always been a very popular community, indicated by the sheer demand for units, even in current market conditions. Prices and rents have come down post-global downturn, making it more attractive. It’s a great time to consider buying in Arabian Ranches for those who currently rent there or want to movethere. A mortgage payment of Dh12,044 per month is certainly an irresistible offer,especially given the fact that the current average monthly rent for a three-bedroom unit is Dh15,000.
Shoreline Apartments
- What: Apartment with two bedrooms plus maid’s room
- Where: Palm Jumeirah
- Premium rent: Dh120,000 per annum
- Purchase price: Dh1.2 million
- Loan-To-Value ratio: 80 per cent
- Mortgage payment: Dh74,148 per annum
- Savings: Dh45,852 per annum
- Maintenance fee: Not available
- Property’s verdict: Owning a home on the Palm is a much-cherished dream for most people, but escalating prices often put a damper on purchase plans. But times have changed and those who have been aspiring to live on Palm Jumeirah can now rejoice. By paying monthly mortgage instalments as low as Dh6,179, you can now own a two-bedroom unit in the Shoreline Apartments on Palm Jumeirah — definitely something that a lot of discerning buyers can afford. For those who are currentlyliving in rented units on the Palm, it is a golden opportunity to own property.
The Springs
- What: Three-bedroom townhouse
- Where: Emirates Living
- Premium rent: Dh135,000 per annum
- Purchase price: Dh1.7 million
- Loan-To-Value ratio: 80 per cent
- Mortgage payment: Dh102,672 per annum
- Savings: Dh32,328 per annum
- Maintenance fee: Dh3 per square foot per annum on the built up area (information courtesy: Ocean View Real Estate) Property’s verdict: Extremely popular with families, The Springs is one of Dubai’s leading residential developments. The tranquil lifestyle on offer, coupled with plenty of amenities and facilities, make this development a good place to live in and also a good investment option. With mortgage payment of Dh8,556 per month, it certainly seems a good bargain, even if you take into account the maintenance fee of Dh3 per square foot per annum in the yearly payments.
Green Community
- What: Four-bedroom bungalow
- Where: Located on Emirates Road
- Premium rent: Dh185,000 per annum
- Purchase price: Dh2.3 million
- Loan-To-Value ratio: 80 per cent
- Mortgage payment: Dh132,972 per annum
- Savings: Dh52,032 per annum
- Maintenance fee: The cost of maintenance varies within the development, depending on the type of units. For a bungalow, the maintenance charges are Dh4 per square foot. (Information courtesy: Ocean View Real Estate).
- Property’s verdict: In the rent-versus-buy game, the Green Community inspires people to buy. For double income families, setting aside an amount of Dh11,081 per month as mortgage payment may not be a difficult proposition. So, if you can own a four-bedroom villa in the Green Community for this amount, it might just be the right choice because, compared with some other developments, the maintenance fee is also on the lower side.
The Greens
- What: One-bedroom apartment
- Where: Emirates Living
- Premium rent: Dh70,000 per annum
- Purchase price: Dh700,000
- Loan-To-Value ratio: 80 per cent
- Mortgage payment: Dh41,232 per annum
- Savings: Dh28,768 per annum
- Maintenance fee: Not available
- Property’s verdict: Located close to Emirates Golf Club, this community has always attracted a lot of occupants. For a one-bedroom apartment, tenants currently pay about Dh5,833 per month. However, what many people don’t realise is that by paying Dh2,397 less than your rent per month, you can actually own a one-bedroom apartment in The Greens which is available for approximately Dh700,000.
Victory Heights
- What: Five-bedroom villa
- Where: Located on Emirates Road
- Premium rent: Dh220,000 per annum
- Purchase price: Dh3.15 million
- Loan-To-Value ratio: 80 per cent
- Mortgage payment: Dh182,100 per annum
- Savings: Dh37,900 per annum
- Maintenance fee: Not available
- Property’s verdict: Victory Heights is certainly one of the best villa developments in Dubai. The community continues to attract buyers and tenants alike and real-estate agents often complain that there is more demand than supply. With more units expected to come onto the market in the next few months, it is bound to create more enthusiasm among buyers and tenants. The current market conditions have provided buyers and tenants with an amazing opportunity to own a huge five-bedroom villa in Victory Heights at just Dh15,175 per month, while the rent for a similar unit is Dh18,333 per month.
Downtown Dubai
- What: Three-bedroom apartment
- Where: Located on Shaikh Zayed Road
- Premium rent: Dh175,000 per annum
- Purchase price: Dh2.2 million
- Loan-To-Value ratio: 80 per cent
- Mortgage payment: Dh129,564 per annum
- Savings: Dh45,436 per annum
- Maintenance fee: Maintenance fees are on the higher side. For example, charges per square foot in Old Town vary from Dh19.28 to Dh21.01 plus chiller charges ranging from Dh6.90 to Dh7.61. Maintenance charges at Burj Views are Dh17.87 plus Dh5.83 as chiller charges, while Southridge charges Dh12.45 as maintenance fee plus Dh5.52 as chiller charges.
- Property’s verdict: This is a great option for those who have been waiting to own a high-profile address in the Downtown area. Although the monthly mortgage payment of Dh10,797, which is Dh3,786 less than the rent you pay per month, is quite affordable for many people, high maintenance charges may put off a few discerning buyers.
The Meadows
What: Five-bedroom villa
Where: Emirates Living
Premium rent: Dh230,000 per annum
Purchase price: Dh3.3 million
Loan-To-Value ratio: 80 per cent
Mortgage payment: Dh190,776 per annum
Savings: Dh39,224 per annum
Maintenance fee: Meadows probably has one of the lowest maintenance charges in the emirate. Homeowners have to pay Dh1.92 per square foot of plot size per annum, which is bound to attract more buyers.
Property’s verdict: Regarded as a favoured destination for families, The Meadows certainly offers good value for money for buyers. The monthly mortgage payment of Dh15,898 is a bargain, given the fact that the average rent per month for a similar villa in The Meadows is Dh19,166.
