Dubai's tenants are becoming homeowners
Dubai's tenants are becoming homeowners
More people buy homes to settle down in emirate
The shift in demand towards end users is becoming more and more apparent over the last few years, with an increasing number of people and families buying a home to settle down in Dubai. Attractive price points, lucrative offers from developers flooding the market and encouraging reforms announced by the government have all helped lure more end users to the homeowner segment.
“Dubai is becoming a city people can call home as they progress in their careers, build their families and enjoy the incredible lifestyle,” says Lewis Allsopp, CEO of Allsopp & Allsopp. “At the end of 2018 the Dubai Land Department released statistics, which showed that despite the drop in off-plan sales, the secondary market stayed consistent. Allsopp & Allsopp have had a record-breaking January and February with a rise in buyer registration by 20 per cent and a rise in tenant registration by 55 per cent in January 2019 compared to January 2018. Three out of four of the buyers we work with are buying with a mortgage. In most of these cases, the buyers are buying as an end user.”
Allsopp further notes that many tenants who have been renting for three to four years are now moving onto the property ladder and investing in their first family home. “The UAE has just been voted as one of the safest cities in the world, a perfect place to raise a family,” he says. “The introduction of the long-term visas by the Dubai Government has made many expats feel more secure within their jobs and the city itself.”
He notes that tenants who have rented for many years and now have families are looking to be in full control of their property and have the luxury of putting their stamp on their home. “People want to pay into their mortgage and are looking to invest in the Dubai economy. However, there are a few tenants in Dubai who would like to step onto the property ladder but are unable to do so because of the high down payments required,” adds Allsopp.
Riyaz Merchant, CEO of Realty Force, agrees that many end users are buying houses to meet expanding family requirements. Many developers are offering incentives in response to this trend. “The offers in most cases include 100 per cent off on registration fees, service fees waiver for the initial four to five years while they pay their instalments to complete the purchase, and covering the agency fees within the price. So for the end user it’s an end price without any add-ons,” says Merchant.
There are also interest-free post-handover schemes, which remove the burden of taking a mortgage. “This trend is very positive,” says Merchant.
Kunal Puri, group CEO and managing director of La Capitale Real Estate, believes the market currently is offering extremely lucrative offers that are more competitive than what most expats will find back in their home countries. Puri notes that 70-75 per cent of expat residents want to continue living in Dubai if given a chance. “With government opening retirement options for expats here, everyone is now looking at the investment from a long-term perspective and the market has seen a huge surge in sales figures, especially in off-plan.”
Properties priced between Dh1 million Dh1.5 million are seeing the most transactions, said Puri. “This segment will keep outperforming as the demand of domestic residents is way higher than supply, and also this is the entry level to getting a renewable visa by investors,” he added.
Harry Tregoning, Managing Partner, Tregoning Property said the softer market is altering consumer behaviour. “A customer recently told me how much rent he has paid so far in his time here and when he calculated it, he could have bought a decent-size villa. He is not alone in this and with those sort of calculations it remains attractive,” said Tregoning. “Another end user bought a house in the Meadows in 2010, when the property market was at its lowest, with a mortgage. The mortgage on their villa is now 90 per cent paid off, and they have their own house which they have upgraded and customised to their taste. There are so many excellent deals out there from developers that there is increased uptake in their off-plan and completed properties.”
By Hina Navin Special to Property Weekly