Does renting still make sense in the UAE?

Continued rent increases mean buying could be a better option.

To buy or not to buy – that is the question faced by many UAE tenants.

The economic recovery brought with it skyrocketing rents and property prices in Abu Dhabi and Dubai. But both began to stabilise earlier this year.

If increases in rents remain low, 2015 will be a “good year for renters”, according to Erik Volkers, senior consultant at CBRE.

But Ben Crompton, the managing partner of Crompton Partners estate agents in Abu Dhabi, forecasts a 5 to 10 per cent rise in rents in Abu Dhabi this year – which he says boosts the case to buy.

“Buying a property is a way to insulate yourself from those rent rises,” says Mr Crompton “It makes more and more sense as more people start staring down the barrel of year-on-year rent rises.”

But the real answer to the “buy or not to buy” dilemma comes down to how long a resident plans to remain living in the country, says Michael Lahyani, chief executive of propertyfinder.ae, who was talking about the Dubai market.

“If you see yourself living here for the long haul, then now is a great time to buy property. Prices are stabilising, the long-term fundamentals are still very positive,” he said. “Rents, on the other hand, are also stabilising, so renting is the way to go for expats with short-term plans, or those who cannot afford to set aside the deposit or secure financing.”