With all the offers on at the moment, do you consider it a good time to buy in Dubai? I've been considering Sports City, so do you consider that area a good long-term investment? JY, Dubai
This is a very dangerous question to ask a real estate agent. Joking apart, I do actually believe this is a great time to jump onto the property market.
One point to stress though: if you are considering buying as an end user, the time to buy is always now. The reason being is that you are buying for the long term and for the purpose of habitation; presumably your stay in Dubai will be for a sustained period so buying to live in at any time is a wise move.
If you are buying for investment, ie to rent out, timing the market is key. Timing the market is when one buys at the bottom of property cycle, for example when the prices are at their lowest. This maximises the investment, assumes future capital growth and guarantees profit later when one decides to sell.
So the real question is, is now the right time to buy?
I guess if you asked 10 brokers this question, you could potentially get 10 different answers. From my perspective, the Dubai property market has now passed four-and-a-half years of downward pressure on property prices. If we are not actually at the exact bottom of this cycle, we are most definitely very close to it, so the time to buy is most definitely upon us.
It is true that potentially there may be some areas of Dubai that might witness further softening of prices going into 2019, by say 5 or perhaps 10 per cent. However, as we more into the new year, you will see prices start to firm up and eventually go up. This may still take six to 12 months or perhaps even less.
The facts speak for themselves. There have been a number positive steps undertaken by the government in recent months in collaboration with the Dubai Land Department. These include giving longer 10 and five-year visas and making life happier through the lowering of service fees, government fees, school fees etc. This will all make Dubai a magnet for foreign investment, especially with all the infrastructure spending on roads, transport, leisure, retail and hospitality as we get closer to Expo 2020.
Developers are adding to the attraction of property ownership with fantastic payment plans and post-handover payment plans. It is true that it seems there is too much choice for the investor at the moment, however, paying for these properties has never been easier. Despite interest rates remaining high, many developers are acting as banks themselves by giving interest-free repayment plans for three, five and seven years post handover. This allows buyers to enjoy their property and pay for it in instalments, helping end-users especially.
To name Sports City as an investment hotspot would not be correct. It is indeed a good area but I would also look at others such as Jumeirah Village Circle or Al Furjan.
Look for what is happening in these locations and other areas in terms of government spending such as improved road links, Metro connectivity, leisure facilities, food and beverage and other retail outlets. All these add to the attraction of the project/area and in turn will bring you good return on investment and potential future capital growth.
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Mario Volpi is the sales and leasing manager at Engel & Volkers. He has worked in the property sector for 34 years in London and Dubai
The opinions expressed do not constitute legal advice and are provided for information only. Please send any questions to mario.volpi@engelvoelkers.com