Renting in the UAE is a rite of passage for most who come to work in the Emirates, not least because many are unsure how long they plan to stay.
But for some more fortunate residents who know they will be here for an extended stay, buying is an attractive alternative to paying rent.
As long as the initial cost of deposit and fees are not too hefty, it offers the freedom from the stress of annually negotiating prices and the knowledge you are paying off your own mortgage.
However, purchasing property in a country that is not your home can come with its own problems.
The National spoke to residents who explained why they chose to buy a home in the UAE.
Rising rent costs
The spiralling cost of rent was a significant factor in Alan Caskie’s decision to buy a four-bedroom home in Abu Dhabi’s Al Reef back in 2014.
“When we were in Dubai, basically our second to last year in Dubai, we paid Dh120,000 in rent,” said the engineer from the UK.
“The last year we paid Dh140,000 and then the next year we moved to Abu Dhabi we paid Dh180,000. We thought this was crazy.
“I always said to my wife I would never buy in this country because of various things, build quality etc. But the project I was on was supposed to be going on six or seven years. And I thought that’s just nuts. So I decided to buy.”
Preparing for the worst
Mr Caskie purchased his property knowing that if he needed to rent it out the income would cover his mortgage.
“That was the cornerstone of the strategy behind buying, that the outstanding mortgage would be covered by rent. That was my one stipulation, plus a safety net on top of it.”
This plan was tested after the project he was working on was suspended in 2016, meaning the family would have to leave the UAE and rent out the property.
At first the income more than covered his mortgage, but by 2020, when he returned to the UAE again for work, Mr Caskie was having to top it up by a small amount.
“I have had this conversation with many people and the one thing I would say is, make sure if you have to leave and you need to rent it (if you’re not selling it) that your costs are covered and you have a safety net,” he said.
If he were to do it all again, he said he would, but this time he would take more time to look around.
“For the most part I am happy we bought. Nothing is ever perfect. It would be wrong to say it was a mistake. But would I do things slightly differently next time?
“Yes, I would maybe do it slightly differently. I would probably spend more time looking elsewhere. We were restricted at the time where we could buy because we are expats.”
Mr Caskie and others like him who buy are fortunate to have the choice. But many who cannot cover the deposit amount do not, and remain at the mercy of fluctuating rental costs.
“Not everyone earns enough or is eligible for a mortgage,” wrote one member of the Abu Dhabi Q&A Facebook group in a discussion on the topic.
“Some people would rather send money back to their home country to invest in property."
Putting down roots and avoiding the constant upheaval of moving home to avoid rising rental costs were chief reasons given by homeowners who were in a position to buy.
“My husband and I were renting for seven years in apartments and we were fed up constantly moving because the rent kept going up and up,” said Caroline Ralston, who is originally from the UK and runs her own company helping men plan wedding proposals.
“Every year, the landlords would put the rent up and we just couldn’t settle anywhere.
“It was costing a lot as well to redecorate our new home every year so we decided to take the plunge and buy our own property.”
Previously, Ms Ralston and her husband had always lived in apartments since moving to Dubai.
That all changed in 2018 when they bought a three-bedroom villa for Dh2.3 million in Arabian Ranches.
“We calculated how much we had paid in rent since moving to Dubai and when we saw how much money we were spending in black and white, we decided it was time to buy our own property if we were going to stay here,” said Ms Ralston.
“We thought about buying an apartment but as we were planning to stay for at least another 10 years, we didn’t want to spend that much time in the same apartment.”
Sector on the rebound
The property market in Dubai is buoyant right now as the industry recovers from the impact of the Covid-19 pandemic.
The average price of villa sales in Dubai rose by more 20 per cent in the past year, figures released by consultancy firm CBRE showed.
There were more than 6,300 transactions in Dubai in April alone, a rise of 43 per cent from the same period in 2021.
The economic side of buying a home was not the only deciding factor for Ms Ralston.
“Renting an apartment made it very much feel like we would only be here for the short term,” she said.
“It was really hard to settle down and I didn’t feel properly settled until we moved to the home we bought.”
She was adamant there were no regrets about the purchase, even though she conceded ownership was not without its downsides.
“If there’s a problem or anything needs fixed, you have to take care of yourself,” said Ms Ralston.
“It’s not like you can just go to your landlord anymore and ask them to sort it out.
“But we’ve paid a lot of money to renovate the villa exactly how we want it but that’s money well spent because this is our home and it belongs to us.”
Golden Visa boost
One real estate broker said there has been a surge in demand for property due to the government’s decision to amend the conditions of the 10-year golden visa.
Real estate investors can obtain golden residence when spending at least Dh2m on property.
“This move is boosting demand and may send Dubai property prices skyrocketing,” said Gaurav Aidasani, founder and managing director of Union Square House.
“The number of inquiries by Dubai residents and visitors registering their interest to buy real estate units has tripled following the government announcement laying down the new UAE visa rules.”
Spotting investment opportunities
Another person who chose to buy her own home is Canadian Bianca Riley.
She bought a one-bedroom apartment in Dubai Marina in 2018 for Dh1.4m.
“I had lived in rentals in places like Palm Jumeirah and JBR but Dubai Marina was always my favourite place, so it made sense to buy there,” said Ms Riley, who works in marketing.
“It is an amazing location and there’s a limited supply so it seemed like a better investment than other areas might have been.”
She did admit that owning her own property has led to some anxiety due to the changing nature of the market.
“The market has fluctuated since then and it can be scary watching the value of your property go down,” said Ms Riley.
“But when I watch my mortgage reduce with every payment, I realise I am getting something in return for my money."