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Expat property buyers in UAE locked out of market by soaring prices
| Published: | 29 Apr at 6 PM |
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As property prices in Dubai soar towards their 2007 levels, mid-range expat and local buyers are being left far behind.
Nowadays, cash is king in the Dubai property market, with overseas buyers underpinning the sector and construction of new apartments and homes picking up at a surprising rate. House prices are fast approaching levels at which locals and lower-paid expats can’t match.
Real estate prices in 2013 increased by 22 per cent, driving up rents as result. The increase measures four time the rate of wage increases in the emirate during the same period, locking 20 per cent of prospective buyers out of the market and opening the door for wealthier overseas property investors happy to pay cash.
Luxury apartments are now making around £300 a square foot, just under 50 per cent more than their mid-range equivalents at £215 per square foot. At the cheaper end, prices range around £215 per square foot, with wages in the emirates only increasing last year by 0,1 per cent. According to local property sales professionals, up to a third of the expat community either cannot afford to buy or would have problems raising a mortgage on wages of less than £60,000 per year.
However, in 2013, Dubai banks lent £43 billion to home buyers, a seven percent increase on 2012. Analysis of these and other figures points to a total of 60 per cent of property purchases being made in cash, and that 50 per cent of all buyers are not living or working in the emirate.
Foreign buyers, it seems, are betting on property prices continuing to increase, at least over the short term, although realtors are expressing concerns that freezing out expat and local purchasers will eventually depress the market.
Nowadays, cash is king in the Dubai property market, with overseas buyers underpinning the sector and construction of new apartments and homes picking up at a surprising rate. House prices are fast approaching levels at which locals and lower-paid expats can’t match.
Real estate prices in 2013 increased by 22 per cent, driving up rents as result. The increase measures four time the rate of wage increases in the emirate during the same period, locking 20 per cent of prospective buyers out of the market and opening the door for wealthier overseas property investors happy to pay cash.
Luxury apartments are now making around £300 a square foot, just under 50 per cent more than their mid-range equivalents at £215 per square foot. At the cheaper end, prices range around £215 per square foot, with wages in the emirates only increasing last year by 0,1 per cent. According to local property sales professionals, up to a third of the expat community either cannot afford to buy or would have problems raising a mortgage on wages of less than £60,000 per year.
However, in 2013, Dubai banks lent £43 billion to home buyers, a seven percent increase on 2012. Analysis of these and other figures points to a total of 60 per cent of property purchases being made in cash, and that 50 per cent of all buyers are not living or working in the emirate.
Foreign buyers, it seems, are betting on property prices continuing to increase, at least over the short term, although realtors are expressing concerns that freezing out expat and local purchasers will eventually depress the market.
Comments » There is 1 comment
Junaid Ahmed wrote 9
years ago:
This is a great informative post with tons of useful knowledge. This helps the expats and investors to make investment in property market of Dubai knowing the trends for Dubai real estate. Thank you for sharing some good information here.
