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Making the most out of the Dubai property cycle

Tuesday 12th September 2017

Written by Roy Weatherby, The Overseas Investor

Generally speaking markets move in cycles and this includes property markets.  This can lead to investors trying to work out how to time the market and looking for that elusive “perfect moment” to make their move.  In actual fact, however, there are often opportunities in all stages of a market and the most successful investors tend to be the ones who understand and appreciate this and go with the cycle rather than trying to second-guess it.
Strategic investment decisions are taken with calculators rather than calendars
At a very basic level, when buying an investment property, you look at the return it can give you and you look at the price you will pay for it and you see how the figures compare to the other opportunities available at the time.  That holds true whether the market is in its recovery phase (like the Dubai property market at the present time), the upswing (sellers’ market), downturn or trough (buyers’ market).  While the old adage of “buy low and sell high” is based on solid foundations, one of the reasons the property market is both complex and fascinating is that there are all kinds of nuances to it.  
For example, a buyer’s desire to “buy low” has to be set against the fact that in market troughs are the time when renters are most empowered to become home owners and when inexperienced investors are most likely to pile in.  Even though the Dubai property market is characterized by particularly strong demand in the rental sector due to the number of people who come to work in Dubai for a (relatively) short time and also due to its popularity as a holiday destination, some of those renting could well choose to become investors in Dubai property themselves as they become familiar with the local market and learn to appreciate it.
The dynamics of selling are similar to the dynamics of buying
The right time to divest yourself of an investment is when the investment has stopped working for you and/or you see a better opportunity out there.  As with selling the desire to “sell high” has to be set against two other considerations.  Firstly unless you happen to decide that the right moment to sell coincidentally happens to be during an upswing, you will be holding on to an investment after it has ceased to be a valid investment, which of comes at a price.  Secondly, if you push to get the highest possible price for your property, there is a distinct possibility that you will find yourself dealing with an owner occupier rather than an experienced investor and hence may well find yourself needing to wait on chains and so forth rather than just making a quick and easy sale to an investor.
Cycles continue and repeat
The nature of cycles is that they continue and repeat, so if you’re in property investment for the long term (which is generally the best approach to the property market), you will almost certainly find yourself buying, selling and holding property through all stages of the cycle.  
For more information or to browse a range Dubai property investments, please contact Hopwood House.

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Editorial Contact Details - Conor Shilling
0845 672 6000
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