Whether you are looking to buy, rent or even invest in property, keeping a check and a watchful eye on prices is crucial. You need to know where the cheapest places are, where the best ROIs could be and where prices are expected to rise in the future.
This is the primary trend for prices in Dubai right now with a few notable exceptions. For the last six months, prices have continuously fallen and have now reached the level that they were at in 2013.
In the past sale prices were falling faster than rent but now, there has been a switch, particularly in Dubai. This is because the economy has slowed down here and the oil industry, in particular, has slowed to a trudge. That is not to say that the situation will not improve. Small and medium-sized businesses are now growing in Dubai and prices are expected to rise as we approach the 2020 Expo.
One of the reasons for the slowdown in property prices is the new mortgage cap that has been imposed by the central bank. The minimum 25 percent deposit and massive transaction costs have achieved a slow down in prices, but it has also opened up an opportunity for off-plan buying.
In off-plan buying, deposits are low, but commissions are quite high with a 3-4% earnings available. This is good news for investors, and buyers can also benefit from it. Many residents in Dubai are now moving towards purchasing larger villas in the most popular areas. In fact, it is possible to buy luxury housing for less than one million which is cheaper than any other major city in the world.
Rent prices have fallen in Dubai in most places, with Discovery Gardens experiencing the highest drop. This is due to the previous buy to flip investors deciding to buy instead to rent out. One of the rare exceptions for rent prices is Investment Park where the prices rose. Despite a drop, downtown Dubai is still the most expensive area for renting.
Villa rentals in Dubai have also decreased in price with Al Furjan and VC now the cheapest places to rent. As for purchasing, villas have become more affordable to buy in Dubai which has attracted significant levels of interest. Meadows, in particular, has dropped in price and has always been one of the most desirable places to live in Dubai.
Dubai Villas for Rent – Image courtesy of Propertyfinder.ae
On the opposite side of the scale, rent prices have risen in Abu Dhabi with MBZ now becoming one of the most affordable places to live. Saadiyat island continues to be the most expensive despite a reduction in cost. The good news for investors is that yields are high, between 7-8% and as such good be a substantial opportunity.
Villa prices, on the other hand, continue to fall in Abu Dhabi and have been on a downward trend for the last few months. This is particularly true in Al Reef where the most noticeable drops have occurred at over 7%.
Finally, the Northern Emirates is providing a fantastic opportunity for investors in the rental market. Rental yields have reached 9.6% in this area and are the best in the UAE currently. For rented accommodation in the UAE, Ajman also provides the cheapest option while RAK is the most expensive.
It will be interesting to see how prices continue to rise and fall over the next few months and indeed the years leading up to the 2020 Expo.
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