Property 29/04/2023 0 Comments

Dubai property market undergoing a transformation, say Arif Patel

Dubai property market undergoing a transformation - say Arif Patel

New home-owners are looking for longer-term stability as they lay down more permanent roots in the city. Increased rental costs and a surge in residents staying in the UAE for longer means property sales in Dubai are rising, Arif Patel said.

Along with the lure of a UAE golden visa, which comes along with certain high-priced property sales and grants longer term residency, many residents from overseas are taking advantage of the country’s interest-free payment plans for off-plan properties with minimal upfront costs.

Arif Patel, property management consultancy AP Capital’s chief property management officer, said this increase in sales is influenced by the recent shift in the property market, which he said is “undergoing a transformation”.

More residents are choosing to become homeowners because they want long-term stability and to avoid increasing rental prices, Mr. Patel told The National.

Read also: What is happening in Canadian Real Estate 2024?

Increase in foreign buyers

AP Capital reported a rise in property purchases from both overseas and overseas resident buyers in Dubai in the past year.

Its 2023 third-quarter property report found unprecedented growth across the country, with a projected positive trajectory this year.

The total property sales value in Dubai reached Dh411.7 billion ($112 billion) last year – a 55 per cent increase compared to 2022, according to EP Properties.

Dubai Land Department statistics also show a huge rise in foreign property purchases in the first quarter of the year, compared to the same period four years ago.

Arif Patel said there is an increase in people buying luxury apartments and villas.

“This is being driven by high-net-worth individuals seeking a luxurious lifestyle as well as family-friendly communities,” he said, adding that off-plan properties are also offering attractive investment opportunities and the potential for capital appreciation.

Feeling at home in the UAE

Government initiatives such as long-term residency and the golden visa programme may also contribute to the increase, he said.

“This trend towards home-ownership indicates a strengthening sense of belonging and commitment among the UAE residents.

“While investing in property remains a choice, a growing number of residents are aiming to settle down and forge a lasting future in the country. “

Arif Umarji Patel, co-founder of Dubai Invest Group, a boutique real-estate consultancy that specializes in luxury residential apartments and off-plan projects in both the UAE and UK, said he has witnessed a similar buying trend among his clients, but also within his social circles.

“I’m one of those people,” said Mr Arif Umarji Patel, who moved from UK to the UAE in 2013.

“Compared to when I first came, I think people’s mindsets have changed. People used to come for one or two years, save some money, go back home, buy a house … I feel Dubai has changed so much, people want to settle down and live here for longer now.”

Mr Patel bought his own property two years ago, at Park Island in Dubai Marina, paying Dh2.35 million.

“I planned to buy back home, but now I’ve bought here and I have no current plans to go back,” he said.

Rising rental costs

When Arif Umarji Patel and his family were being evicted from their five-bedroom villa in Arabian Ranches, they decided it was time to buy instead of rent.

The house, which they had been renting for the same amount as they had previously paid for a three-bedroom apartment in Dubai Marina, had doubled in price since they moved in during the pandemic and could now be rented for Dh450,000 per year.

“We decided if we’re going to downsize, we should just get on the property ladder,” the British-Cypriot, who has twins, told The National.

“We have a long-term perspective living in Dubai, our business is here, we want the kids to go through school here, so it made sense for us to live in something that’s ours, that provides long-term financial security, knowing what the costs are and we won’t be served noticed and forced to move.”

Mr Arif Umarji Patel, who owns an art consultancy business with his wife, moved to a three-bedroom villa in Emaar South, which he said made sense for them in terms of affordability and proximity to her children’s school.

It’s a story that has become common in Dubai, with evictions leading to more foreign residents buying their homes instead of renting, which has historically been the case.

It was the same for Bahraini resident Ahmed Ali and his family, who have been living in Dubai since 2015 and considering buying property for years.

When their Dubai Hills landlord gave them their notice last year, they finally took the plunge, buying a villa for Dh4.9 million in Arabian Ranches 2, where they plan to stay for at least the next five years.

“Prices weren’t coming down and we wanted security in a house where no one can kick us out,” he said.

Increased market confidence

Nikki Martin, co-founder of new female-led Palm Living Real Estate, said she has noted an increase in European buyers lately, particularly from the UK.

“This might be due to rising interest rates back home, coupled with attractive tax benefits in the UAE,” she told The National.

“In today’s market, it seems more sensible to invest in the UAE rather than elsewhere, whether for investment or living purposes.

“With no apparent signs of a slowdown, backed by statistical data, buying property here seems more justifiable than their high-tax and high-interest-rate home countries,” she added.

Meanwhile, off-plan projects have become popular among many buyer demographics, Ms Martin said.

“These projects offer easy, interest-free payment plans, making it easier for expatriates to enter the property market in the UAE with minimal upfront costs.”

Advantages to buying property

While the buying process is not necessarily easier than before, and mortgage fees have actually risen over the years, it is an easier decision to make, added Arif Umarji Patel.

“Dubai is the place everyone wants to be. It’s widely said it’s the safest, most secure destination. You get advantages now buying, such as your golden visa, and obviously it helps that the market is increasing.”

He advised anyone who is looking to buy to properly research the area they want to live in first, then get in touch with a mortgage broker.

“Work out how much you can actually afford and see what areas are open to you,” he said.

“Also stick to one agent. Find out who the specialist in the area is who you trust and just stick with them. They’ll be able to find you the property you want and it’ll eliminate so much stress from your life.”