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Showing posts from 2012

Property Price in Dubai

A friend recently brought up the sudden surge in property prices in Dubai, expressing concerns about investing due to the rapid increase. It was a valid point, considering the influx of speculators aiming to capitalize on short-term gains. Indeed, the rise in property prices can be attributed to increased demand and reduced supply, which is a common factor behind price increases. However, it's important to scrutinize the market from a different perspective. While manipulating property prices may be relatively easy, the rental market presents a different story. Rental rates have also witnessed an upturn, and unlike property prices, the rental market is not easily manipulated. Rental demand can only grow with an increase in population, which is typically accompanied by economic growth. Another factor contributing to the rise in rental demand is the recent mandatory requirement set by RERA (Real Estate Regulatory Authority) for tenancy contracts to be registered through Ejari (For mor

Strategic Timing: Building a Property Portfolio

When it comes to building a property portfolio, one crucial factor stands out above all else: timing your entry into the market. Unfortunately, we cannot turn back time to purchase properties or investments that we know would have appreciated in value over the course of 10 or 20 years. Reflecting on some properties we sold in International City back in early 2006, it's surprising to see that their prices today are still lower than they were in that year. It's almost as if going back in time to acquire a property. However, this situation presents an excellent opportunity to construct a property portfolio with a small initial investment. Consider the following example of purchasing a studio apartment in International City, Dubai, using bank finance: Property Purchase Price: AED 250,000 Down Payment required by the Bank: AED 50,000 Bank and valuation charges: Approximately AED 5,000 Bank Loan: AED 200,000 In this scenario, a cash investment of AED 55,000 is require

Enhancing Property Value: Importance of Maintenance and Upgrades

In Dubai, we handle numerous property rentals every month, and one common mistake we often observe is that investors tend to neglect the upkeep of their properties. Despite receiving rental income, many landlords are hesitant to invest in maintaining their properties, particularly in International City where apartments are often in poor condition. Fortunately, property maintenance in Dubai is relatively affordable. To illustrate, let's consider the example of several properties we manage in International City for our clients. These apartments are now 5-6 years old, and the construction materials used at that time were of mediocre quality. However, by simply replacing the floor and bathroom tiles, you can significantly enhance the value of your property. We have experienced firsthand that investing in these improvements never results in a loss. In fact, it greatly improves the rental and selling potential of these properties. From a financial standpoint, it makes per

Understanding Property Investment: Key Considerations

When it comes to purchasing properties, people have different motivations. Broadly speaking, these motivations can be categorized into two main types: "buying for investment" and "buying to live." In this discussion, I want to shed light on some significant issues faced by those who buy property for investment purposes. Over time, I have observed many individuals making hasty decisions when it comes to investing in property. The majority rely on luck and hope that their investment choices turn out to be correct. However, it is crucial to ask yourself an important question: Why am I buying this property? If the answer is simply because everyone else is doing it and property prices are rising, it's time to reconsider. Human nature often leads us to follow the crowd, with numbers increasing as more people join in. In financial theories, this phenomenon is known as herding. Unfortunately, the Dubai property market also fell victim to this trend. Many individuals w

Dubai's Property Market Rebounds Strongly in 2012

The year 2012 has marked a significant turning point for Dubai's property market since the crash in 2008. Property prices are experiencing a rapid and impressive increase. Emaar's Arabian Ranches villas, in particular, have witnessed a substantial price surge of 24%. Other prominent areas such as International City, Greens, Springs, and Marina have also seen a rise in property values. Emaar Properties, a key player in the market, has reported a 1.9% increase in its share price, reaching a 15-month high. Adding to the positive news, Emaar announced an estimated second-quarter profit of 614 million Dirhams ($167 million), representing a remarkable 82% surge in net profits. This outstanding performance is highly beneficial for investors. Mohamed Alabbar, chairman of Emaar Properties, emphasized that Dubai's property market is making a turnaround after the crash in 2009, which was largely due to the global financial crisis and the subsequent drying up of available finance for

International City: A Promising Investment Opportunity in Dubai's Real Estate Market

Introduction: Over the past four years, Dubai has experienced a challenging period, but as the dust settles, one area is emerging as a lucrative investment option with impressive returns: International City. This article explores the factors that make International City an attractive investment opportunity, including its affordable prices, high liquidity, rental demand, reliable brokers, improved services, ongoing developments, and the potential for price appreciation. Affordability and Attractive Prices: International City offers some of the most affordable apartments in Dubai, making it an appealing choice for both local and international buyers. The competitive prices allow investors with limited budgets to secure stable returns. Even compared to London's property market, it is difficult to find properties at a similar price range with comparable rates of return. High Liquidity: Liquidity is a crucial consideration for any investment, and International City excels in this aspect

A Comparative Analysis: Dubai vs. London Property Market

Introduction: On July 10, 2012, The National published an article titled "Dubai puts London in Shade when it comes to rents yield," which provided an interesting comparison between property markets in Dubai and London. As an avid follower of both markets, I appreciate Cluttons' valuable insights into property prices in Dubai. The timing of the article couldn't have been better, prompting me to reflect on the stark differences between these two real estate landscapes. Dubai vs. London: Divergent Priorities: Even back in 2008, certain areas of Dubai offered significantly higher rental yields compared to London. While I closely monitor the London property scene, it's important to acknowledge that investment motivations in the two cities differ greatly. Rental yield is not necessarily the primary focus for investors eyeing London properties. Fundamental Differences: London's mature market provides a sense of security for investors, with high demand for rental prop