Monday, December 10, 2018
There are many new communities that are expected to be arising on the outskirts of Dubai. Most of the family buyers can afford to buy a 3 or 4-bed townhouse or villa in Dubai. Thus, they can move out. Multiple new off plan developments in Mudon and Dubai South cater to middle-income families. Most of these families are seeking a proper family home that has good practicality than an apartment. Usually, a 3-bed townhouse in Mudon’s lush Arabella 3 development starts at AED 1,422,000.
Now, the off-plan looks set to appreciate in value. This is because the new suburban communities are growing in popularity. It is expected that with a drop in mortgage rates, the mid-range market will continue to flourish. Most of the latest off plans are bringing a change to the way investors are approaching the property market in Dubai.
When you invest in luxury prime property in Dubai, you will notice that it is cheaper than many other international cities. Paying AED 42,000,000 for this five-bed apartment in Downtown, you can enjoy Burj Khalifa views. If you compare the same to New York, you might have had to pay five times more for the same type of property.
The consistent growing trend for serviced properties is adding good value to the price of a prime off plan property. In case you’re an investor from overseas, you must buy now. This way you can ride the wave of demand for major rentals from high net worth tenants in the lead up to EXPO 2020. The good part is that Dubai is becoming more and more connected. It is inviting foreign investment as well. Its property market needs to benefit.
In 2017, global property prices have increased on average by 2.1 percent. This is significantly up from 1.6 percent the previous year. The oversupply in Dubai has implied that prices in this region softened by 5 percent over the same period.
The Dubai market has been known to have been volatile throughout. There has been a significant price movement. However, the market appears to be maturing with time. The performance has improved pretty much over a past decade. The sentiment in this area is encouraging as well. After all, caps on borrowing, caps on loan payments and crashing oil prices are failing to maintain the impact.
The supply side issues are apparently inhibiting the early stage positivity. However, certain neighborhoods have been impacted more than the rest. Downtown is Dubai's central hub. It is dragging down average property prices. At the same time, the market sentiment in more upmarket areas such as Emirates Hills, The Lakes, and the Palm Jumeirah is pretty positive. This area has a good deal of amenities. Multiple top-quality properties and massive transport links are still attracting demand.
As far as the investor base is concerned, Dubai is diverse. It has almost 200 nationalities investing in the 18 months to June 2017. The market has lured in a good deal of Chinese investment. The country, currently, ranks sixth-highest for inbound property investment. There has been a policy shift that grants Chinese nationals visas on arrival in Dubai. This has been a major factor in this context. Thus, there has been a remarkable increase in the connectivity permitted by direct flights to 13 Chinese cities.
Dubai has direct access to12 US cities in the present scenario. A good focus on the tourism sector has also been a major driver. It has pretty much-increased investment from US nationals. The purchases that have been denominated in the British pound. The euro is still gaining a lot from a relative discount.
In the meantime, the UAE government is focused on stimulating the local economy. It is also putting the focus on the visa and foreign ownership changes. Almost forty-three percent of its 2018 budget is booked to grow vital sectors such as infrastructure and transport. This is pretty much predicted to give way to an overall economic stimulation in the property market.
The viability of international property investment into Dubai needs to be taken in the context of other international opportunities.
In the current scenario, people have more choice in the Dubai market. This is a superb news for most of the buyers and renters.
The mortgage cap has given way to the reduction of the house prices. The mortgage cap was a vital introduction at the end of 2013. The mortgage cap was basically crafted to stop increasing prices that would have given way to a bubble and bust scenario and a great deal of instability.
Having the mortgage cap in proper place, you need a third of the property value in cash, if you are purchasing a property valued at Dh5 million or less. Generally, the breakdown of this is a 20 to 25 percent deposit for the property. However, the rules vary a bit depending on whether you are a local or an expat. An Emirati is required to supply a 20 percent deposit. At the same time, an expat needs to supply a 25 percent deposit. This corresponds to a good deal of bank loans allowed. This is an 80 percent loan for an Emirati and 75 percent for an expat. Now, since Dubai has many foreign workers, expats constitute the overriding market.
Apart from the 25 percent purchase amount deposit, there's a 4 percent Dubai Land Department fee, a 2 percent broker fee and another 1 percent for other associated fees that are involved in the purchase. This is a proper burden of 32 percent of the total cost of the property to pay.
Many people wish to decorate a property in Dubai and furnish it at the time of moving in. Thus, an expat needs at least a third of the property value available in order to be able to purchase.