When is the best timing and season to buy a property?
Many people make the mistake of waiting until the market hits rock bottom before buying their property. Owning a property allows you to better utilize your hard-earned dirhams from covering an expense which offers you no future financial return to an investment which does. In a way, it’s a forced form of saving which will reap benefits for you in the future as your wealth is in the form of property instead of cash. Paying rent can actually inhibit your ability to build net worth. Conversely, as a property owner, inflation is working in your favor, because, in all likelihood, your property is increasing in value and, if kept for multiple years, you will enjoy an inflationary compounding effect on our property’s value. So, as long as you are taking the long-term view, don’t get too hung up on trying to time the market. Focus your energy on getting the best deal and you eliminate half of your perceived risk straight away.
Can a broker be a property manager?
Absolutely, and many times, clients are better off because of it. The best property managers I have encountered in my time in the industry cut their teeth as successful brokers. To be an effective property manager, you need to be able to provide your clients with a complete and realistic property assessment, and strategy and activity plan designed to harness the true financial potential of your property. The scope of consideration should be global,regional and local in nature, and you should have a good understanding of economic factors, societal trends,industry knowledge extending to policy and regulation, finance and market dynamics.
If you expect to provide the range of services expected of a professional property manager, such as marketing, vetting tenants, executing rental agreements, authority and tenant liaison, handling maintenance issues and providing regular reports, market updates and financial statements, then the “on the ground” knowledge, experience and expertise that is accumulated by being a broker will be hugely beneficial.
Is it true that house prices drop by record amount in summer?
There has been a widely-held belief that summer sees significant price reductions. The reason for this is that average prices reduce slightly due to there being less “non-distress” or “urgent” sales during the period. Urgent or distress sales typically cannot wait until the end of summer and, given the lower levels of overall activity, may somewhat sway the statistics. People who are not in a rush to sell property are more likely to exit the market during summer for their holidays, thereby diluting the number of non-distressed sales in the market which lowers the average selling price. There is also a dearth of buyers during summer. High participation rates lead to higher levels of competitiveness resulting in higher prices. The seasonal trend of Dubai’s real estate seems to see participation rates rising in the post -summer period, before starting to fall off again in the middle of the second quarter.
Now that the hype surrounding the Expo 2020 bid has eased, what effect will it have on real estate values?
The effect of Dubai’s successful Expo 2020 hosting bid was significant. The sharp increase in demand for property was not surprising as it was accompanied by a bunch of data, which indicated the significant economic effect that the event is expected to have on the economy. The real or tangible economic effect comes in the form of planned infrastructural investment and the creation of new jobs in preparation for over 25 million additional visitors to the emirate.
The Expo is expected to further strengthen Dubai’s growth prospects going forward with’ the IMF revising its GDP growth figure to 4.5% for the UAE for this year. While a proportion of the effect of the Expo has already been priced into real estate values,l believe the benefits will eventually exceed most investors’ expectations as many underestimate the multiplier effect that the infrastructural investment alone will have on the economy.
Question of the Week
Shall I consider purchasing land and have a house built on it or get it directly from the developers?
It totally depends on what you require and to what extent the current range of offerings from developers can actually meet your needs.
The obvious advantage of appointing an architect to design your home and working with a designer to craft an interior that matches and complements your taste is that you will have a home that suits your desires in terms of layout. style. amenities. ambiance. fixtures and fittings. You will have a home which is truly unique. Of course, choice and preferences come at a cost and the personalized attention that you receive from your architect and interior designer can be expensive. In addition. sourcing, appointing and managing your contractor (or contractors) can be a time-consuming and frustrating process and, given the likely unique requirements of your new house. the construction cost per square meter is bound to be higher. Nevertheless, if you feel that you have the expertise. time and patience. then your new home can be exactly as you envisioned.
The advantage of buying from developers is that most of the hassles with design. approvals. construction, materials sourcing, dealing with the utilities and services suppliers is already taken care of. The trade-off is that the likelihood that the product you are buying exactly matching your tastes and preferences is rather remote.