Despite the slight fall in prices, is Dubai still one of the world’s best places to invest property in? The answer is a resounding yes.
It is no secret that Dubai property sales values and transactions have shown a dip over the past year and a half. The government has since introduced cooling measures to prevent overheating and speculation given the upcoming World Expo 2020 that Dubai is gearing up to host. The Expo is the UAE’s opportunity to engage in the global community and drive innovation.
However, this price softening is no reason to feel worried about an upcoming bubble as it is only a sign of the market auto-correcting itself for the sake of long-term stability. Furthermore, the Dubai property market continues to mature given the government’s strategic regulations such as increased property registration fees and mortgage caps.
This is in fact a great time for those looking to buy Dubai property as attractive bargains are to be enjoyed in some locations. Moreover, with high rentals, this is an apt time to lock in a property that will bring good yields as well. So while the Dubai property market may remain subdued over the course of this year, this phase certainly provides rewarding opportunities for investment in Dubai real estate for the long term.
Dubai property represents solid value when compared with other global real estate markets and is one of the world’s best markets for income-generating assets. We believe that greater control and market regulation will help the Dubai property market mature and keep confidence among the investor community.
With the government stepping in to curb speculation by tightening mortgage regulations and capping price increments, the Dubai property market has learnt from the 2008 downturn and is heading steadily to be more mature and better controlled. Furthermore, the market is performing very well in the rental segment, with rental yields reaching more than 7%. Compare this with cities such as Hong Kong which offers around 2% to 3% and London which offers yields averaging 3% to 4%.
So, while Dubai property sales prices have dipped, the rental market has remained robust given the increase in expat population and number of jobs created by the infrastructure investment planned around the mega Expo 2020. Hence, those with stable incomes and long-term plans of living in the UAE should consider investment in Dubai real estate, as rents can work out to be more expensive in the long run than mortgage payments. Investors should consider buying off-plan properties to take advantage of the recovering market, as Dubai property units are being offered at a 20% to 30% discount.
Lower prices, higher yields: this is the right time to invest in Dubai property.
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