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UAE expats warm towards property ownership
| Published: | 1 Nov at 6 PM |
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Expats now resident in the UAE are beginning to like the idea of property ownership.
A report from the online real estate portal Property Finder revealed the result of a recent survey, with 50 per cent of respondents who’d purchased homes over the previous six months now believing owning is better than renting. A further 33 per cent said now seemed to be a good time to buy. Those who’d purchased homes did so for financial reasons, as they were planning to stay in the UAE for at least three years or more and didn’t want to pay rental charges when they could own their own homes.
According to the website’s survey, the two major problems for expats as regards buying property are the affordability of homes for sale and the challenge of saving enough to afford the down payment at its present rate of 30 per cent of the full cost. The deposit is set high due to a government-mandated cap on available mortgages, which is far higher than in Hong Kong, New York or London. Since 2014, property prices have fallen faster than have rental charges, making the prospect of owning one’s home the sensible option as regards not having to pay monthly rents. Seeing property as an investment is also appealing to prospective purchasers.
Market analysts believe the slump in real estate prices is due for a reversal in the near future but, at present, rising supply and a comparative lack of demand during the run-up to Expo 2020 in two years’ time is holding price increases back and even causing further falls in some areas. Prices in Dubai fell by 7.7 per cent year-on-year in September and, in Abu Dhabi, declines were 5.6 per cent during the same time period. Real estate agents believe a larger proportion of expat-owned homes would be good for the market as owner-occupiers look after their properties better than do tenants and stay longer, thus lending stability to the sector.
A report from the online real estate portal Property Finder revealed the result of a recent survey, with 50 per cent of respondents who’d purchased homes over the previous six months now believing owning is better than renting. A further 33 per cent said now seemed to be a good time to buy. Those who’d purchased homes did so for financial reasons, as they were planning to stay in the UAE for at least three years or more and didn’t want to pay rental charges when they could own their own homes.
According to the website’s survey, the two major problems for expats as regards buying property are the affordability of homes for sale and the challenge of saving enough to afford the down payment at its present rate of 30 per cent of the full cost. The deposit is set high due to a government-mandated cap on available mortgages, which is far higher than in Hong Kong, New York or London. Since 2014, property prices have fallen faster than have rental charges, making the prospect of owning one’s home the sensible option as regards not having to pay monthly rents. Seeing property as an investment is also appealing to prospective purchasers.
Market analysts believe the slump in real estate prices is due for a reversal in the near future but, at present, rising supply and a comparative lack of demand during the run-up to Expo 2020 in two years’ time is holding price increases back and even causing further falls in some areas. Prices in Dubai fell by 7.7 per cent year-on-year in September and, in Abu Dhabi, declines were 5.6 per cent during the same time period. Real estate agents believe a larger proportion of expat-owned homes would be good for the market as owner-occupiers look after their properties better than do tenants and stay longer, thus lending stability to the sector.
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