Savvy Dubai residents are taking advantage of falling property prices caused by the Covid-19 pandemic to buy their first homes in the emirate.
The National spoke to first-time buyers who benefited from the unexpected opportunity to put down roots in Dubai.
Property prices were 8 per cent lower year-on-year in Dubai and 4 per cent lower in Abu Dhabi during the fourth quarter of 2020, in part because of the wide-ranging economic effects of coronavirus.
“I was initially thinking of upgrading by renting a bigger apartment than the one I was living in but then the pandemic happened,” said Australian Tariq Rao, 51.
“When I saw how the property market was going I thought I might be able to get a villa.
"It turned out that having a mortgage and renting a property would end up costing me about the same anyway."
In November, Mr Rao and his family bought a three-bedroom townhouse in Dubai's Town Square community for Dh1.3 million, a price he said was too good to refuse, given that similar properties were selling at Dh1.5 million just a few months previously.
'It took me eight years to buy a property in Dubai," said Mr Rao, who works in the cultural section of the British Council.
“I just never trusted the market enough before and didn’t feel confident enough to invest until the prices came down with the pandemic.”
Property experts predicted there would be more bargains in Dubai in the coming months with prices expected to fall further.
Property surplus a boost for bargain hunters
Analysts at property company JLL said an oversupply in residential units had put downward pressure on the market, which would create a decline of between 5 per cent and 8 per cent to eight per cent.
JLL forecast that 53,000 new builds would be added to Dubai’s property market in 2021, representing a 9 per cent increase on the 595,000 properties registered at the end of 2020.
Another Dubai resident said the lower property prices provided the ideal opportunity for him, and his family, to buy their own home.
“We were living here for six years before we decided to take the plunge,” said corporate lawyer Chris Walters, 36.
‘We had been toying with the idea for some time and have often had issues with landlords we were renting from, so when the property prices dropped it felt like a good time to make a home for ourselves in the UAE.”
Mr Walters, from Scotland, has just bought a villa in the Springs, Dubai, for Dh2.4 million, but has already noticed neighbouring properties being sold for as much as Dh3 million.
‘It’s already looking like a wise investment,” Mr Walters said.
“We saw that prices had dropped [at the start of the pandemic] but had started to creep back up already and we didn’t want to miss out just as the market turned.”
Chandra Dake, 42, from India, believed he had secured a bargain when he bought a five-bedroom villa in Al Furjan, Dubai, for Dh3.9 million.
“I saved about 20 per cent to 30 per cent by buying it when I did,” said Mr Dake, who runs a desert farming company.
“We wouldn’t get value for money like this in any other country.”
Mr Dake said the property would have been even cheaper if he and his wife had bought it in the early months of the pandemic, instead of October.
“We wanted to see if the market would begin to pull back and if prices were going back up before we invested,” he said.
“We were confident the lowest dip had already happened and it wouldn’t drop any more and that we had chosen the right time to pick up the property.”
Mr Dake said he had rented a villa in Dubai since 2018 and had been monitoring the market for the perfect moment to buy his first property in the emirate.
Dubai's hot spots for buyers
The top five areas in Dubai in terms of property sales in 2020 were Dubai Marina and Jumeirah Beach Residences, Jumeirah Village Circle, Town Square, Downtown Dubai and Business Bay, according to an annual report from Core Middle East.
Gil Van Gelder, sales director with Dubai real estate company Espace, said demand was especially high among first-time buyers in The Springs, The Meadows and The Lakes.
He said this was because residents were putting a premium on space and their surroundings as they spent significantly longer at home because of remote working and travel restrictions.
“Most of the people purchasing property right now are first-time buyers,” he said.
“A lot of people who had been renting for years saw the opportunity to buy and took it.”
He said incentives from the Central Bank of the UAE had played a significant role in allowing first-time buyers to get their feet on the property ladder.
“Since the pandemic, first-time buyers are able to borrow up to 85 per cent of the capital required when before that it was capped at 75 per cent,” Mr Van Gelder said.
It was not just first-time buyers who were snapping up deals during the pandemic, with investors picking up relative bargains in some of Dubai’s most illustrious locations.
"One investor bought a villa in Palm Jumeirah for Dh10 million in April that had been valued at Dh25 million before the pandemic," Mr Van Gelder said.
“He sold it for Dh15.6 million a few months later and the person who bought it from him then sold it for Dh16.8 million.
“Now its value is back up to Dh25 million.”