Dubai is the most stable and vibrant hub for businesses and one of the most attractive cities for expats. It offers high salaries and high quality of life without imposing any income tax. According to Charterhouse average monthly salary for a civil engineer makes AED 30,000 and for graphic designer AED 16,000. However, the monthly budget for a family of four is set at AED 12,243 including property costs. It means if you find a job in Dubai above this you will have more than a comfortable life. Now Dubai is ranked the sixth best city for working expats.
But that’s one of the criteria to keep in mind before moving in Dubai and buying property in this high-tech city.
The main question property investors have at the moment – what’s the situation with house prices. It’s a known fact that the prices went down, and this process followed the drop in oil prices back in 2014. The real estate experts suggest this might last until the end of 2020, and one of the reasons for that is oversupply of new development projects.
The UAE government has this situation under control and is introducing new initiatives for foreign property buyers to make home ownership more attractive. The most important initiative offers 3-year visa for those who invest AED 1 million or more in a residential property that is in a freehold area and is ready to move in, 5-year visa for those who spend AED 5 millions for a property in the UAE and 10-year visa for those who invest AED 10 millions into the country (company, business partnership or property). All these visa types are renewable.
Another fact for the record is EXPO that is planned for 2020 (starting October 2020 till April 2021). That is a huge event that will attract more than 25 million guests from all over the world, thus it will boost economic growth by 10% already in 2020. But from world expos experience, this impact will have some post expo effect, and economy will benefit from it in the long term.
As for property prices – they will surely go higher after that, not to mention demand in rentals during the event. So, analyze property offers in Dubai South – areas around the place where EXPO 2020 will be held (Al Wasl Plaza). Now you still have more attractive homes available and you’ll surely benefit from soft prices (AED 1.8 million for a flat instead of AED 2.1 million back in 2015 or AED 4.7 million for a villa instead of AED 5.6 million).
However, if it’s a pure investment to have some income from letting property for rent, you’re also going to benefit. Dubai can give you 6-7% annual rental return on average, in the best areas of Paris or New York you’ll get not more than 3%. Of course, you need to calculate property expenses on management, bills, insurance, but that’s something you’ll have to pay for in any other city. Anyway, don’t expect to make a massive return overnight, it’s the developing market where you need to invest for long term returns. That said, when homework is done, you can expect higher returns than in other markets, but no one says it’s a guarantee and you shouldn’t do anything for that.
Is it finally worth buying in Dubai right now?
Frankly speaking, if you plan to purchase property in Dubai, it’s better to do it earlier than later in current circumstances, as we see a lot of factors that could force price surge. But if you’re not convinced, please proceed with your market research and weigh up all your pros and cons.