Dubai real estate is doing really well, and many people are thinking about whether they should buy a house instead of renting. An expert is saying that with the property market growing so much, it might be a good idea to stop “wasting” money on rent.
In Dubai, the property market has been breaking a lot of records, making it stand out as a stable place in the world, even when the overall economic situation isn’t that great. But for people living there, renting has become really expensive. So, the question is, should they think about buying their own place instead?
How much money do landlords make in Dubai’s real estate?
In an interview with Arabian Business, Simon Baker, who runs haus & haus Real Estate, has a clear answer. He says it makes sense for people looking at the long term in Dubai to buy a home instead of spending money on rent for a few years.
Dubai’s real estate market is getting a lot of attention from investors, both local and international. The demand is increasing more than in previous years, causing both rents and property values to go up. This trend is expected to continue, according to recent data.
Milos Antic, from DHG Properties, mentions a significant increase in off-plan sales in Dubai. While renting gives flexibility and lower upfront costs, Antic believes buying property has great potential for investors.
Simon Baker points out that although the growth in rent rates has slowed a bit, they are still increasing, and in some places, they’re higher than ever. He says that buying can be more affordable in the current market for those who have the necessary funds. If people can’t buy or don’t want to buy in Dubai, they might end up paying higher rents and may need to downsize or move to more affordable areas.
What are the benefits of buying a property in Dubai compared to renting?
According to Baker, who is in the real estate business, Dubai is a relatively new property market compared to global cities like Paris, London, and New York. He says there’s significant potential for the value of your property to grow as the city develops, especially in newer communities.
Owning a home has advantages, too. It means you don’t have to worry about things like eviction or typical problems that come with renting. Having a family home also allows you to upgrade and personalize it, making it your own.
Antic adds that the UAE, where Dubai is located, offers strong economic and political stability. This stability, along with the city’s ability to withstand tough times, can provide investors with a good return on investment (ROI). He suggests that if investors have the money, now is a good time to buy one or more properties, especially in the off-plan sector.
Additionally, Antic mentions that buying property in the city not only offers the potential for the property’s value to increase but also provides expatriates with the opportunity to attain permanent residency.
Does the location affect the decision to buy or rent in Dubai?
Absolutely. Where you’re thinking of living can have a big impact on whether you choose to buy or rent. Some areas don’t even offer the option to buy, and returns on investment can vary. Rent costs are different in each area, and there are several other factors to consider.
According to Baker, apartments in Dubai tend to have more owners looking to rent for either the long or short term. On the other hand, communities with villas or townhouses usually have more people looking to buy and live in the property themselves.
While popular areas like Dubai Marina and Downtown are already well-established and desirable, newer places like Jumeirah Village Circle (JVC) are becoming more accessible because of their affordable prices.
To make the right decision, Baker suggests comparing sale prices to rent and looking at service charges on rent for an accurate comparison. The demand for buying property in Dubai is high, especially in established communities, leading to a shortage of available properties. This makes the market move quickly, and buyers need to act fast when the right property becomes available.
Antic mentions that the expected population growth in the future has led to speculation about a housing shortage, prompting investors to buy existing properties due to Dubai’s appeal and promising return on investment.
Many people now see Dubai as a long-term home rather than a place for short-term gains. Over the years, the city has become more secure and stable, making buying property a more sensible choice in the long run, according to Baker.
When it comes to the technicalities like getting a mortgage, Dubai is more affordable than other places. Baker explains that getting a mortgage for expats is more straightforward now because Dubai wants people to invest in the city.
In summary, the real estate expert emphasizes that deciding to buy a property is a significant choice that should be made carefully. It’s crucial to find something within your budget that you can sensibly afford in the coming years. In this context, he strongly recommends buying instead of renting, especially considering the expected rise in rents due to increased demand. Purchasing ensures that you’re not priced out of living in Dubai.
To simplify, he says, “Money matters. If you have the funds, and buying won’t strain your finances, it comes with many benefits. It provides a place to live, the potential for passive income through renting, and the opportunity to make a profit by selling later on. Real estate has consistently been one of the safest investments,” concludes Antic.