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Home sales in Dubai predicted to increase over the next five years

Thursday 27th April 2017

Written by Roy Weatherby, The Overseas Investor

The United Arab Emirates is seeing significant changes in its property market, with more people than ever before looking to buy rather than rent. In a predominantly rental driven market, how realistic is it for this trend to completely turn on its head?
Living the dream
In a country where the vast majority of the population chooses to rent their homes, it is perhaps shocking that a huge number of renters now expect to be able to buy their own home in the next five years. This change represents a dramatic shift in the UAE housing market, however, with official figures not being clear how many people are actually owner occupiers, it is difficult to judge the real size of the property revolution.
Rents are falling across all types of property in Dubai, which means that landlords are having to be more flexible with their tenants as they are in a better position to now negotiate rents down, which may allow renters the opportunity to save more towards a deposit, however it may also have the opposite effect and keep renters in rented accommodation as it will be cheaper than taking their first step on the property ladder.
Those aiming to make the move to property owners are facing a number of negative factors which appear to still be holding them back. A lack of deposit and the feeling that many salaries are too low appear to be the main sticking points for those looking to move into the property market.
The cost of moving is also proving to be a big consideration, with many finding that high broker fees, legal costs and renovations have all produced bigger bills than they initially expected. This could be due to a lack of planning and research into these costs, and whilst better financial planning could help to combat some of these surprises, it seems many are still relying on financial assistance from their parents. In fact, this trend is now greater in the UAE than in other countries such as the United Kingdom or even the United States.
In the UAE, it is recommended that a deposit of at least 35% is set aside, which should then allow buyers to cope with the unexpected costs that are likely to crop up. With so many people being unfamiliar with the buying process, it stands to reason that buyers are being caught out by unforeseen expenditure. The market is currently driven by investors rather than home-owners and so it may take time for the experience and planning of home-buying to become common-place.
The optimism seen in those looking to buy is a good thing for the UAE housing market, but many younger buyers need to look closely at their financial planning if they are ever to make their dreams a reality.
For more information on investing in Dubai property, please contact Hopwood House.

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Editorial Contact Details - Conor Shilling
0845 672 6000
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