Is now the time to invest in Dubai property? Our experts advise. Pictured, Palm Jumeirah. Sarah Dea / The National
Is now the time to invest in Dubai property? Our experts advise. Pictured, Palm Jumeirah. Sarah Dea / The National

Dubai property: is 2016 the year to invest Dh1m in the rental market?



Is 2016 the best time to invest in Dubai’s property market? I want to invest Dh1 million in a rental property to earn the maximum yield. MH, Dubai

Expert one:

Mario Volpi, property expert and Homefront columnist at The National

To get straight to the point, 2016 will be a great time to invest in Dubai’s property market, but the real question should be when to take the plunge.

Property sales values and transactions have declined over the past 18 months since the government introduced the necessary cooling measures to reverse sales prices from overheating due to the announcement of the successful Expo 2020 bid at the end of 2013.

During the last quarter of this year, there has been talk about the many thousand of property units that were expected to be delivered in 2015 but ultimately were not. There is still speculation as to the total number that will now become available in 2016.

Depending on how high this number is, sales prices could fall further. Therefore, knowing when to purchase a rental investment property will become the major factor. My belief is that we are probably close to prices bottoming out.

This year’s price softening has been welcomed as it has allowed the market to catch its breath and realise that the residential sales market represents good value once again when compared with other global property markets.

Dubai’s rental yields are averaging just over 7 per cent – extremely attractive when compared with cities such as Hong Kong at around 2 to 3 per cent and London at 3 to 4 per cent. In some parts of Dubai, the yield can be as high as 10 per cent net such as on The Palm Jumeirah in the Dukes and Anantara project developments.

The reason for these growing yields is that while we have seen a cooling of sales prices, the rental market has remained broadly robust. The reality is that residents still need somewhere to live; couple this with the increases in population due to job creation, means that renting continues to be the first choice for the majority.

Expert two:

Adam Price, managing director, Middle East at Select Property Dubai

In short, 2016 is a great time to invest in Dubai property. Following the global financial crisis the property market came back in 2012 and peaked in the first quarter of 2014. Prices fell across the board in 2015.

However the Dubai property market continues to mature and stabilise as a result of strategically implemented government regulations, including the increased property registration fees and mortgage caps, so 2016 will be the perfect time to invest.

Gross returns for both small and large apartments in Dubai are delivering between 5.87 per cent and 7.21 per cent yield which is higher than Hong Kong, Singapore and London.

But where to invest? With Dh1 million, I would recommend a studio apartment in a tier 1 location that is going to deliver a strong rental return. These areas would be Downtown Dubai, Dubai Marina, and Burj Khalifa side of Business Bay.

In particular, there is a shortage of studios in and around the Downtown area, so this offers an opportunity to drive high yields.

In addition, I recommend investors buy off plan – which means a lower cash outlay over the build period. The buyer can take advantage as the market recovers without having to pay all the money straight away..

Next Money Clinic:

I recently read about the freezing up of the US$788 million Third Avenue Focused Credit Fund in the US. The mutual fund that was meant to provide small-time investors with easy access to their cash has now been closed and redemptions have been blocked. I have invested, via a platform with a global insurer, into a number of funds around the world. How can I protect myself from something similar happening to my investments? GJ, Dubai

Every three weeks The National features a reader’s personal finance problem. If you have an issue or would like to suggest a solution for another reader’s concern, write to pf@thenational.ae.

The advice provided in our columns does not constitute legal advice and is provided for information only. Readers are encouraged to seek appropriate independent legal advice.

MATCH INFO

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Man of the match: Joshua Kimmich (Bayern Munich)

Company Profile

Company name: Namara
Started: June 2022
Founder: Mohammed Alnamara
Based: Dubai
Sector: Microfinance
Current number of staff: 16
Investment stage: Series A
Investors: Family offices

The chef's advice

Troy Payne, head chef at Abu Dhabi’s newest healthy eatery Sanderson’s in Al Seef Resort & Spa, says singles need to change their mindset about how they approach the supermarket.

“They feel like they can’t buy one cucumber,” he says. “But I can walk into a shop – I feed two people at home – and I’ll walk into a shop and I buy one cucumber, I’ll buy one onion.”

Mr Payne asks for the sticker to be placed directly on each item, rather than face the temptation of filling one of the two-kilogram capacity plastic bags on offer.

The chef also advises singletons not get too hung up on “organic”, particularly high-priced varieties that have been flown in from far-flung locales. Local produce is often grown sustainably, and far cheaper, he says.

SPECS

Engine: Two-litre four-cylinder turbo
Power: 235hp
Torque: 350Nm
Transmission: Nine-speed automatic
Price: From Dh167,500 ($45,000)
On sale: Now

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Director: James Cameron

Stars: Sam Worthington, Zoe Saldana, Sigourney Weaver

Rating: 3/5

The specs

Engine: 3.6 V6

Transmission: 8-speed auto

Power: 295bhp

Torque: 353Nm

Price: Dh155,000

On sale: now

UAE currency: the story behind the money in your pockets
Company Profile

Company name: Cargoz
Date started: January 2022
Founders: Premlal Pullisserry and Lijo Antony
Based: Dubai
Number of staff: 30
Investment stage: Seed

Company profile

Name: Tharb

Started: December 2016

Founder: Eisa Alsubousi

Based: Abu Dhabi

Sector: Luxury leather goods

Initial investment: Dh150,000 from personal savings

 

The specs

Engine: 4.0-litre twin-turbo V8
Power: 666hp at 6,000rpm
Torque: 850Nm at 2,300-4,500rpm
Transmission: 8-speed auto
On sale: Q1 2023
Price: from Dh1.15 million (estimate)

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Platform: iOS 17

Main camera: Triple: 48MP main (f/1.78) + 12MP ultra-wide (f/2.2) + 12MP 5x telephoto (f/2.8); 5x optical zoom in, 2x optical zoom out; 10x optical zoom range, digital zoom up to 25x; Photonic Engine, Deep Fusion, Smart HDR 4, Portrait Lighting

Main camera video: 4K @ 24/25/30/60fps, full-HD @ 25/30/60fps, HD @ 30fps, slo-mo @ 120/240fps, ProRes (4K) @ 60fps; night, time lapse, cinematic, action modes; Dolby Vision, 4K HDR

Front camera: 12MP TrueDepth (f/1.9), Photonic Engine, Deep Fusion, Smart HDR 4, Portrait Lighting; Animoji, Memoji

Front camera video: 4K @ 24/25/30/60fps, full-HD @ 25/30/60fps, slo-mo @ 120/240fps, ProRes (4K) @ 30fps; night, time lapse, cinematic, action modes; Dolby Vision, 4K HDR

Battery: 4441mAh, up to 29h video, 25h streaming video, 95h audio; fast charge to 50% in 30min (with at least 20W adaptor); MagSafe, Qi wireless charging

Connectivity: Wi-Fi, Bluetooth 5.3, NFC (Apple Pay), second-generation Ultra Wideband chip

Biometrics: Face ID

I/O: USB-C

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Cards: Dual eSIM / eSIM + eSIM (US models use eSIMs only)

Colours: Black titanium, blue titanium, natural titanium, white titanium

In the box: iPhone 15 Pro Max, USB-C-to-USB-C woven cable, one Apple sticker

Price: Dh5,099 / Dh5,949 / Dh6,799

UAE currency: the story behind the money in your pockets
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TWISTERS

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COMPANY PROFILE

Company: Eco Way
Started: December 2023
Founder: Ivan Kroshnyi
Based: Dubai, UAE
Industry: Electric vehicles
Investors: Bootstrapped with undisclosed funding. Looking to raise funds from outside

Director: Nag Ashwin

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KEY DATES IN AMAZON'S HISTORY

July 5, 1994: Jeff Bezos founds Cadabra Inc, which would later be renamed to Amazon.com, because his lawyer misheard the name as 'cadaver'. In its earliest days, the bookstore operated out of a rented garage in Bellevue, Washington

July 16, 1995: Amazon formally opens as an online bookseller. Fluid Concepts and Creative Analogies: Computer Models of the Fundamental Mechanisms of Thought becomes the first item sold on Amazon

1997: Amazon goes public at $18 a share, which has grown about 1,000 per cent at present. Its highest closing price was $197.85 on June 27, 2024

1998: Amazon acquires IMDb, its first major acquisition. It also starts selling CDs and DVDs

2000: Amazon Marketplace opens, allowing people to sell items on the website

2002: Amazon forms what would become Amazon Web Services, opening the Amazon.com platform to all developers. The cloud unit would follow in 2006

2003: Amazon turns in an annual profit of $75 million, the first time it ended a year in the black

2005: Amazon Prime is introduced, its first-ever subscription service that offered US customers free two-day shipping for $79 a year

2006: Amazon Unbox is unveiled, the company's video service that would later morph into Amazon Instant Video and, ultimately, Amazon Video

2007: Amazon's first hardware product, the Kindle e-reader, is introduced; the Fire TV and Fire Phone would come in 2014. Grocery service Amazon Fresh is also started

2009: Amazon introduces Amazon Basics, its in-house label for a variety of products

2010: The foundations for Amazon Studios were laid. Its first original streaming content debuted in 2013

2011: The Amazon Appstore for Google's Android is launched. It is still unavailable on Apple's iOS

2014: The Amazon Echo is launched, a speaker that acts as a personal digital assistant powered by Alexa

2017: Amazon acquires Whole Foods for $13.7 billion, its biggest acquisition

2018: Amazon's market cap briefly crosses the $1 trillion mark, making it, at the time, only the third company to achieve that milestone

COMPANY PROFILE

Company name: Revibe
Started: 2022
Founders: Hamza Iraqui and Abdessamad Ben Zakour
Based: UAE
Industry: Refurbished electronics
Funds raised so far: $10m
Investors: Flat6Labs, Resonance and various others

Tips to keep your car cool
  • Place a sun reflector in your windshield when not driving
  • Park in shaded or covered areas
  • Add tint to windows
  • Wrap your car to change the exterior colour
  • Pick light interiors - choose colours such as beige and cream for seats and dashboard furniture
  • Avoid leather interiors as these absorb more heat
COMPANY PROFILE

Company name: Almouneer
Started: 2017
Founders: Dr Noha Khater and Rania Kadry
Based: Egypt
Number of staff: 120
Investment: Bootstrapped, with support from Insead and Egyptian government, seed round of
$3.6 million led by Global Ventures

5 of the most-popular Airbnb locations in Dubai

Bobby Grudziecki, chief operating officer of Frank Porter, identifies the five most popular areas in Dubai for those looking to make the most out of their properties and the rates owners can secure:

• Dubai Marina

The Marina and Jumeirah Beach Residence are popular locations, says Mr Grudziecki, due to their closeness to the beach, restaurants and hotels.

Frank Porter’s average Airbnb rent:
One bedroom: Dh482 to Dh739 
Two bedroom: Dh627 to Dh960 
Three bedroom: Dh721 to Dh1,104

• Downtown

Within walking distance of the Dubai Mall, Burj Khalifa and the famous fountains, this location combines business and leisure.  “Sure it’s for tourists,” says Mr Grudziecki. “Though Downtown [still caters to business people] because it’s close to Dubai International Financial Centre."

Frank Porter’s average Airbnb rent:
One bedroom: Dh497 to Dh772
Two bedroom: Dh646 to Dh1,003
Three bedroom: Dh743 to Dh1,154

• City Walk

The rising star of the Dubai property market, this area is lined with pristine sidewalks, boutiques and cafes and close to the new entertainment venue Coca Cola Arena.  “Downtown and Marina are pretty much the same prices,” Mr Grudziecki says, “but City Walk is higher.”

Frank Porter’s average Airbnb rent:
One bedroom: Dh524 to Dh809 
Two bedroom: Dh682 to Dh1,052 
Three bedroom: Dh784 to Dh1,210 

• Jumeirah Lake Towers

Dubai Marina’s little brother JLT resides on the other side of Sheikh Zayed road but is still close enough to beachside outlets and attractions. The big selling point for Airbnb renters, however, is that “it’s cheaper than Dubai Marina”, Mr Grudziecki says.

Frank Porter’s average Airbnb rent:
One bedroom: Dh422 to Dh629 
Two bedroom: Dh549 to Dh818 
Three bedroom: Dh631 to Dh941

• Palm Jumeirah

Palm Jumeirah's proximity to luxury resorts is attractive, especially for big families, says Mr Grudziecki, as Airbnb renters can secure competitive rates on one of the world’s most famous tourist destinations.

Frank Porter’s average Airbnb rent:
One bedroom: Dh503 to Dh770 
Two bedroom: Dh654 to Dh1,002 
Three bedroom: Dh752 to Dh1,152 

The specs

Engine: 2.0-litre 4cyl turbo
Power: 261hp at 5,500rpm
Torque: 400Nm at 1,750-4,000rpm
Transmission: 7-speed dual-clutch auto
Fuel consumption: 10.5L/100km
On sale: Now
Price: From Dh129,999 (VX Luxury); from Dh149,999 (VX Black Gold)