With a little more than a year left until Expo 2020 Dubai, industry experts at the Dubai Property Festival say they are now finding a spate of high demand for Dubai’s real estate sector.
Expo 2020 is expected to attract 25 million visitors, of which 70 per cent will be from outside the UAE. In an interview with Property Weekly, Robert Booth, managing director of Ellington Properties, says, “I am personally very excited about Expo 2020. I had the benefit of growing up in Vancouver that hosted the 1986 Expo, and once people saw the city, they kept coming back and buying property. So I think the great thing about the Expo here is that it will have a huge long-term impact. In fact the post-Expo impact will be greater.”
According to Booth, developers have the mandate to support the government in ensuring there is enough units to service Expo 2020 Dubai and the new stream of population that will come as a result.
“Dubai has one of the highest growth rates in population, year-on-year, around the world. It’s important to note here many developers have already slowed down their launches so that post 2020 the market goes back to moderate supply. It is always better to invest when it is a buyer’s market in order to benefit from the offers available.”
Get on the property ladder
The challenge is buying your first property, says Booth. “Once you get on the property ladder, you can work your way up. It is also important to remember that property is a long-term investment, and not a short-term gain. You are not here for one or two years; think 10-20 years, think multigenerational. Many big families think multigenerational when they buy property. So even if it’s a small property, get on that ladder.”
According to Booth, investors in Dubai also enjoy higher returns, in addition to paying zero tax on investment — a combination that does not exist in other global markets.
“Pick up quality assets as they always hold value,” he advises. “Don’t buy it just because it is less expensive than another. Think about the location.
Buyers should look at good neighbourhoods first and then pick the home. Take your time and do your research — buying property is the biggest investment decision you will make.” Booth picks Jumeirah Village Circle and Town Square as areas with a great neighbourhood and community feel. “MBR City is also a great location where you are only 10 minutes away from Downtown, the epicentre of Dubai.”
Despite low prices, Lewis Allsopp, chief executive of the Dubai real estate agency Allsopp & Allsopp, says Dubai now has a very different clientele.
“You don’t get a Ferrari when you enter the country anymore. It’s a different place now. You’re not coming here to be a millionaire, you are coming here to have better-quality life and be in the sun. We have other expenses now, such as VAT and Salik, but that has made Dubai a better place with great facilities. People with lower salary jobs are also coming to Dubai now, and they are willing to stay further away from the city and look into affordable areas.”
While the core areas, such as Downtown Dubai and Dubai Marina, will continue to stay in value, Allsopp says price will get cheaper as one goes further out.
“This means being out that farther away, you will be at a lower salary level, but you will use transport, such as the Metro, to get into town, like people do in most big cities such as London or New York. This adds another dimension to Dubai.”
Talking about ready properties, Booth says, “My recommendation is to target properties that will be available in the coming months as that also means that the warranty will come from the developer directly. You have Arabian Ranches 2, which is a very well-established community with prices starting from Dh1.2 million for a villa. There are also Nshama apartments where a two-bedroom unit starts from Dh800,000. A one-bedroom property in one of our projects in Jumeirah Village Circle is at an average of Dh800,000, while a very similar property in Meydan is around Dh1.1 million. In Downtown Dubai figures are more towards the Dh1.7 million mark.”
The greatest concern of investors today is whether they will lose money if prices go down.
“If you have three to five years, and there is the option to rent or buy, you have to buy,” says Allsopp. “When you rent, you are paying someone else, and you might have to move out one day of that property. But when you buy a house, in 20 years, even if the price goes down to zero, you still have a home. But as tenant, after those 20 years, you have nothing.”