There’s something of a stalemate situation going on in Dubai at the moment – on the one hand rental property in Dubai is still in extremely high demand with more expatriates arriving every month and seeking accommodation. And on the other hand, there are fewer investor buyers acquiring property to let out.
This means that the intense pressure that has existed in the rental market for some time is not easing – if anything it is intensifying. In the meantime, buyers are reluctant to enter the market as they are aware that not all in Dubai’s property market garden is rosy.
As buyers sit on the fence and consider their options, this makes it ever harder for would-be tenants to find a place to live in Dubai. But we have some advice for potential purchasers of property in Dubai – and that is, don’t be afraid to enter the market, just keep your wits about you and adhere to the following advice: –
There has been a plethora of developers churning out similarly styled, relatively soulless apartment blocks in recent years. These have been constructed with little serious concern having being paid to aesthetic appreciation and even less being paid to how residents will feel about the place in which they live. These developments are unpopular with buyers and even less popular with would-be tenants, and so demand for such units is dwindling causing some developers to struggle and even to put other projects on hold.
As a potential buyer of a property in Dubai you need to know that there remains intense demand by would-be tenants that can translation into lucrative returns…however you have to service both your own needs and your future tenants’ needs when buying. So, whilst a struggling developer may be offering you a good deal on a faceless apartment in a block with few redeeming features and it may seem like the bargain of the century in pure financial terms, over the longer term the purchase could prove to be an albatross. You may struggle to let it, if you do let it it will not be for top dollar and you may find you have a fast turn around of tenants. What’s more, if at some point you want to sell the property you may well struggle to.
So, steer clear of ‘obvious’ bargains and look instead at where you can still buy value added property in Dubai. Whilst many are looking straight to the high-end where there will probably always be the potential to profit well, you have to have massive capital outlay to get on the ladder. Additionally, many feel that Dubai’s bubble has burst and there will be negative pricing adjustments with the high-end likely to be hardest hit relatively speaking. So instead look around at some of the niche developments where there are specific and superior offerings in terms of either the superiority of the dwelling, or the appeal of the onsite amenities and facilities. Look also at location when choosing a home – think about how accessible it will be for your likely tenant market to either their work place or even the best schools if you’re thinking of buying a family home to let out.
Be willing to negotiate hard – you may be negotiating with a poker faced developer or agent who is giving nothing away – but just KNOW that these guys are ALL struggling to make the profits that they want to make at the moment, and so any sale is valuable to them. This means that you are in the driving seat and in the absolute best position to negotiate a good deal that suits you. Point out why you’re valuable to them – i.e., perhaps you’re a cash buyer, a buyer of multiple units, a buyer who can recommend others use this particular company or a buyer who has financing in place. They will then not want to lose your business and will be more likely to listen to your demands.
Choose developers who are long established and have finished developments and homes under their belt that you can look at. Choose properties on developments that are nearing completion or already complete. And finally, look on the forums and get active chatting to expatriates already living in Dubai and find out what it is they look for in a rental property – that way you can ensure you’re buying to suit your rental market demand.