Most of us hope to buy some kind of property at some point in our lives. A well-chosen apartment can outlive its first owner’s life. And some of the most common and valuable inheritance commodity is property.
A recent study by the Royal Institution of Chartered Surveyors (RICS) and International Property Measurement Standards (IPMS) showed that around 85 per cent of the worldwide wealth is tied to real estate (rather than cash or bonds etc). And yet, deciding to buy a property is easy - but deciding which can be quite confusing.
Now that we are starting to get some positive vibes from the Dubai property market, let's look at what could lie ahead.
* 2020 was an exceptionally difficult year - so anything that shows an improvement over last year will come across as a huge positive.
* Health and security: Vaccinations and testings are widespread. And security is second to none.
* COVID-19 has added an extra need for larger residential units. More residents will want to move away from apartments to villas as they expect to work-from-home for some more time to come.
* Changes in the UAE's Citizenship Law and the Golden Visa numbers are rising.
* The UAE continues to have a world-class infrastructure in the shape of roads and airlines.
* Return on Investment: With banks offering almost zero interest rates, property is still offering high returns even if the rentals continue to record downward pressure.
Now that the market reasons have been stated, let’s look at the factors to consider before deciding what to buy:
Reputation: Choose a developer that has a track record of delivery... and good customer service. Never buy the cheapest out there. If you cannot afford it, then wait until you can find something to suit your budget. Check if the developer has delayed on previous projects.
Check the quality of completed projects. Does the developer have more lawyers than sales agents?
Location: Land is a finite asset, so choose wisely. Look for nearby metro stations and other infrastructure. Look for schools, malls and hospitals. This helps your property to maintain and increase its long-term value. Avoid a new project in the middle of nowhere. That is the reason it is so cheap.
Visit before buying: Do not buy based on what a salesman has told you. Visit the site and see for yourself. Are the neighbours annoying? Are the noise levels too loud? Is the promised water-view non-existent? Does the place reek of odours or mosquitos? Only a site-visit will reveal that.
Do the maths: Study the price and other numbers. Factor in the service charges, Land Department registration fees, mortgage costs, current and future rent, etc. Apartments should be kept for 5-10 years to get maximum benefit. Villas can be kept for longer.
Apartments can offer up to 10 per cent RoI with minimal increase in asset value. Villas on the other hand offer less ROI (in the range of 2-4 per cent) but have cheaper service charges and appreciate in value more. Never trust an advert that guarantees a certain RoI. Also avoid hotel apartments because of recent legal changes.
Government: Finally, do not shy away from approaching the relevant government entities for advice before - and not after - buying. Go to the Dubai Land Department to check about service charges, unit and balcony areas, and project completion dates. Visit Dubai Municipality or Dubai Development Authority to check about planning issues.
Contact the RTA to check about road construction progress. Approach the master-developer to see if that promised school or mall opposite will actually get built. Luckily, all government entities have decent mobile apps that save you the hassle of a visit. However, if you decide to visit in person you will be met with free specialist advice and a warm cup of tea... and a smile to match!