A consultant explains the advantages of owning property
Next Move, a property show targeting end users as opposed to investors took place in Dubai this week, suggesting a shift in focus in the Emirate’s property market. The recovery of the Dubai property market is good news for owners and landlords, but it can leave those living in rental accommodation feeling the pressure as rents go up.
Many projects put on hold are now being revived, so now could be the time to invest in Dubai property. Residential consultant Ajay Wagh talks us through the basics of the Emirate’s residential sales market.
How easy is it for first time buyers and investors to get a mortgage in Dubai?
“Whether the buyer is a first time buyer or an experienced investor, the process of getting a mortgage from the banks is the same. If the buyer is not a resident in the UAE and wants to get a mortgage on a completed property, they are eligible for up to 60 per cent of the property value. If the buyer or investor is a resident of UAE, they would be eligible for an amount of up to 75 per cent of the property value. There are mortgage consultants like Independent Finance who make life easier for the buyer or investor by completing the whole process from start to finish for a nominal fee of 0.75 per cent of the loan amount. To sum it up, it is extremely easy to get a mortgage in this country.”
What are the advantages for buyers or investors purchasing a property as opposed to renting?
“Buying a property is a much more profitable option than renting a property. If we are renting a property worth AED 120,000, over six years, we have paid AED 720,000 in rent and we don’t own the property. But if a buyer is buying a property worth AED 1.5 million and takes a mortgage from the bank, he or she would pay about AED 71,000 every year for repayment of loan and in six years the property can appreciate in value by about 70 per cent, if we take previous growth as an example. Above all, the buyer owns the property and can customise it as per his or her requirement, then sell it for a profit after the property has appreciated.”
In your view, is now a good time to buy or should potential buyers wait for a market correction?
“Now is the perfect time to buy a property as the market is growing at a steady rate. This market is for long term investors and buyers. It is not a market for buyers who are looking to flip. With laws in place that regulate the market value and to prevent a bubble, the property prices will definitely keep growing at a steady rate.”
What are your views on buying “off plan”?
“Buying an off plan property is definitely worth doing as the value will appreciate as the construction comes to completion. The price of an off plan property is always less than a completed property. It is always a good option for buyers who do not have large initial deposit.”
Sources – The National