The Dubai expatriate’s dilemma

To buy or to rent? Find out how to use your money to increase your wealth


It’s not hard to see why expats choose Dubai. It has a lot of attractions: beaches, restaurants, shopping, outdoor activities… even snow skiing! Dubai boasts a modern infrastructure and is regarded by many as one “of the safest places for families to live in the world and is located advantageously for excursions to Europe, Asia and Africa.

As the emirate has grown and matured, the average tenure of expats living here has been on the increase. This is due to a number of reasons, principal among them is the recognition of employers that three year employee tenures are inefficient and the recognition by expats that Dubai is actually a very good place to live.

If you cannot find a property immediately that will satisfy your requirements, do not settle for less. Be persistent and patient in your approach.

With many expats now considering living in Dubai for longer, an increasing number are contemplating on purchasing a home instead of renting. For many, making this commitment can be a daunting respect and decision making will often become clouded. There are many things for the uninitiated to consider such as budgeting and finance, asset type, area, fair values and timings.

So, as an expat, why buy your home instead of renting it? Buying your home is a positive step towards establishing your financial security by building your equity or “net worth.” Owning property allows you to change the application of your hard earned dirhams from covering an expense which offers you no financial return to investing in an asset which does. In a way, it’s a forced form of saving which will reap benefits.

Conversely, paying rent actually detracts from your ability to build net worth because not only are you paying out money for no financial gain, you are also at the mercy of rental inflation. This is a problem because you are consistently being asked to pay more while your salary increases are lagging behind, eroding your ability to build wealth. By owning your home, inflation is working in your favor because, in all likelihood, your property is increasing in value. This allows you to build your net worth through capital appreciation.

The fundamentals of buying real estate in Dubai are no different from those elsewhere in the world.

First of all, be clear as to why you are investing in real estate. Whether it’s to provide the family with a home, generate a steady stream of income or build equity, make sure you are clear about your expectations and quantify them wherever possible. Plan for the long term as the industry is cyclical yet very rewarding.

Also ensure that you know what you can afford. If you have the cash, pay for it out right; however, don’t be afraid to take out a mortgage. At least your repayments are building equity, not being lost forever on rent.

Then it’s as case of finding .the right property. A reputable real estate brokerage can assist you in doing this, but make sure that you conduct your own research. It’s a big decision you are making. You need to make sure you take the responsibility.

As always, stick to the basics. Think carefully about location, building quality, developer reputation, completion status and quality of infrastructure and building amenities Properties close to the beach, with a golf course view or are part of an iconic development are a good place to start. If you can also have close access to the Metro, even better. These locations are likely to provide a superior appreciation in capital value.

“Also consider the effectivity of the owners association, service charges and the quality of maintenance services. Facility management is more important in determining the value of buildings and it will have an effect on the long term value of your investment.

Finally, think clearly and rationally. If you cannot find a property immediately that will satisfy your requirements, do not settle for less. Be purposeful, persistent, patient and pragmatic in your approach and you are well on the way to making a very sound decision. “

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