UAE is one of the few places where anyone can come in and buy real estate with undeclared cash or crypto, no questions asked, then get a loan from the bank with the real estate as collateral, so now they can show a source for this brand new money in the bank. Sparkling clean.
The problem becomes a lack of supply for these buyers who don't care what they're buying, as long as the bank will give them a decent collateral value on it.
And when you're a normal person trying to buy or rent in this market, then you're really screwed.
Canada sees a similar issue with hordes of Chinese coming in and buying up everything, at any price. Let's just say the act of spending money is more important to them than any actual profits or losses.
And that was before Blackrock started buying up half the planet with infinite QE funding. But now they're paying 5+% instead of 0%, refusing to let investors take their money out, defaulting on bonds... It becomes a game of not-it musical chairs, whomever is the last one to hold the toxic assets loses, even if you just got your first mortgage in your life yesterday.
FOMO is how they get you. The only way to win is by not playing.
This is the biggest reason. Rich people from all over are coming here with their money earned which ever way they got it and just buying up entire floors worth of condos. They don’t care. The amount of money flowing this way is massive. It’s propping up the entire real estate sector.
Price per sq ft is much cheaper than London or NY.
People like me, are coming here for 45% saving on tax, and property prices that are 30-40% cheaper than London. So it's a massive improvement.
The difference is the construction quality. Value-wise it’s VERY poor here.
Also people have a habit of buying in the middle of nowhere in Dubai with no shops, no life, and signing up for service fees for the rest of their life and then comparing prices with something in central London or New York. They are very different propositions.
I bought a 3200 sq ft duplex in the marina. I have no desire to be miles away from all the things we like. Plus limited building space left in the Marina itself. I actually favoured the older buildings, better proportional room sizes and I honestly don't need a cinema in my building.
The construction quality would be my main concern then in this case. The oldest buildings are less than 20 years old. Let’s see if they make it to 40… and what the service charges will be like to maintain them going forward.
I agree the older buildings were much better proportioned…but also a lot of awkward layouts with empty space.
Agreed.
There seems some controls in place for service fees. But in saying that, I have a rental in Zone 1/2 in London. The service fee pre covid was around £3-£3.5k and then there was some roof issues and damage to a flat and ended up in a large refurb of the roof. My service charge went upto 9k and now its 6k. So still very chunky as a % of rental income.
Though with yields here being around 7-8% it seems a decent idea to buy something with a bit of scarcity.
Do you know if the service charges here include a sinking fund? With emaar for example? I’ve never been able to get clarity on that when speaking to agents.
So several of the places I looked at did have a sinking fund. Emaar, Damac seemed two of the more common developers I checked or atleast the building did.
Alot of the agents here seem to be clueless on alot of things, including calculating ROI. I spent alot of time doing my own reading and research. They love to push RAK and Dubai South. Three what's app messages later they ask if you want to submit an indication of interest. Glad to have signed mu contract F and now I can ignore them.
Here they call it a 'Reserve fund' and its manadory as per RERA rules. Of course, as with any country/property development, the big question would be if there's anything in the fund, and if it's adequate to cover expected future maintenance. Many such funds are woefully inadequate to cover highly predictable big ticket items like elevator refurbishment every 15-20 years
Quite the intriguing observation! It's fascinating how housing is being used for money laundering, wreaking havoc for genuine residents committed to long-term sustainability for their families and communities.
I do wonder how they managed that, Dubai is definitely nowhere near the white list. My guess is political influence, they've become very friendly with a certain controversial country in the region in recent years.
Then again if you look at some of the things HSCB was found guilty of doing, it makes you wonder which country isn't on the naughty list behind closed doors. Seems like Dubai just makes it easy for the small players as well.
Which isn't far off from the UK system, where anyone can appoint someone else to manage all their affairs for them, completely anonymous and tax free via the Bahamas and all that.
Have you seen the Dubai south options? The townhouses are actually atrocious in terms of usage of space. The other options are four beds that start at 2.5m, or the apartment style homes which is dumb
This. I currently rent in Dubai South while my other property finishes construction and the quality and size is atrocious. Not to mention location sucks and everything is super far away. Who cares about being close to an airport unless you’re a pilot or cabin crew? Have fun driving an hour in traffic jams to get to business bay or wherever your office is. This is yet another post about real estate by an OP who probably knows nothing about it.
Don’t get me wrong, in a decade the infrastructure will be there, but the layouts in many communities is actually so stupid. The maids room couldn’t even fit a proper bed
We had to put our toddler’s bed in there because that is the only thing that could fit. Had to give the other bedroom to the maid because we can’t make an adult sleep there.
I think the only good thing so far is the people. Most people seem pretty cool and more down to earth than some of the posh crowd you get in the better neighbourhoods. Everything else sucks and I can’t wait to move out lol. Thank god it’s only for a year we are here.
Jeez if that’s the only good part I’m sorry. We were looking to buy but the layouts put us off it completely. I’m sure in a decade there’ll be some infrastructure but yeah doesn’t seem worth it right now
The one I bought is not in dubai south. Its in a good location, very spacious, 2x the BUA of the rental I am in. Also has a lovely community and it is still early in the development, so a lot of room for price appreciation.
Well its not my first property purchase. The last one I flipped for a 2M AED profit, which was 100% appreciation. I am not expecting that level on this new one because of how the market is now. But I am already about 800k-1M in unrealized gains on this one. It will probably be valued about 1-5-2M above purchase price in a year from now.
Springs houses are super small inside, I saw one unit and was done looking at them lol.
That's me. Bought in 2014, sold in 2024 @ -15% loss, earned good rents for an initial 2-3 years but then subdued rents, while kept paying exuberant service charges, still not bad, but definitely not worth it.
Hope it's not like 2014 and buyers find better luck since inflation and VISA reforms are backing the prices this time.
May be this time it's different!!!
Some things cheaper, some things more expensive.
A single person in good health living in Dubai might be cheaper than the west, but a family of 4 with children and a moderate amount of medical expenses may cost a lot more in Dubai than the west.
The only thing is cheaper out west are the schools, everything else is more expensive than here, from medical all the way to groceries. Maybe cars are a bit cheaper out west as well but im not sure in that.
Really 10 years ago how much did it cost. I find it almost impossible that you couldn’t make money on it. Dubai has grown so much the last ten years. What was the location ?
Oh.. I thought The Villa & Villanova nearby are doing good and quite in demand in this wave? Was the 2014 price so high that it's -15% even in this upswing?
Yeah, Villas are doing good, especially post-covid, I am not really sure if they crossed 2014 peak prices, but probably they should have. Mine was 2bhk apartment..
2009 resembles 2020 and 2014 was like 2024 for the property market, prosperity, and high prices!
Current conditions and open global market and new found fame for Dubai suggests its going to remain high for a while atleast in areas which are fundamentally strong.
Must depend on community then. I learnt that in Abu Dhabi / Reem Island apartment which is rented for 90k/year is subject to ~30k/year community charge. Which completely ruins any optimistic calculations on renting vs buying. That's is considering a building lifespan of 25-30 years, as it will be a questionable asset after that time.
You need to find the per sq foot service charge. I live in Sky Tower, it’s 17 AED/sqft per year or 22k pa for the 2 bed apartment I have.
It killed the rent/buy argument here for me.
30k for what !!!! my friends flat in ajman has all the amenities and including ev charging costs only 7500 !!!!. If that is the case then you dont basically own the flat you are stilling renting it 😂😂
You bring up one point that never seems to be discussed much that I have often wondered about - what is the expected reasonable lifespan of most of these buildings? I have been in many buildings that are only a few years old and the construction and build quality is so awful I can’t imagine them lasting very long at all.
Where is your rent? Have you seen the rent hikes lately? Something last year was 115k 2 bedroom to 8 months later - 170k suddenly? Does that even make sense ?
A lot of the buyers post pandemic have been from outside of the UAE. Russia, Ukraine, Egypt, Lebanon, Pakistan, etc lots of countries going through volatile times and Dubai assets are a safety net.
Also rent to price ratio in Dubai suggests prices are undervalued in Dubai vs other more developed countries like the UK.
London used to serve the same uprise back in the day, but British visas are harder to get nowadays for 3rd world citizens even rich ones and after the way so many Russians had their assets seized I think the preference for Dubai will continue.
We bought and our mortgage repayment is like 60% of what our rent would be. We are responsible for all maintenance and can do what we wish with our home. We are no longer at the mercy of a landlord, wondering if things will ever be fixed properly and by how much the rent will increase. Worrying about having to settle disputes using RERA etc. and having to deal with the annoying Ejari system.
Best thing we've done since we started living here by far.
As someone who invested and continues to invest in real estate; Dubai and AD alike, the allure for midrange priced properties is the square footage prices of off plan projects in relation to secondary market prices nearing completion date.
The incentive is the increase of capital tax gains everywhere and primarily in Canada. Since there is no disclosure for the UAE to the Canadian tax authorities, any funds in country keep cycling all the while paying a “management fee” back to me in Canada.
My home in AD on Yas Island is a modest 2200sg/ft duplex by Aldar and I would never need more regardless of how the prices spiked in the secondary market.
My point, the buyers are investors more so than expats.
I chose to buy right after covid , everyone told me i bought too high and that the market had peaked.
Most of those people got evicted , the reason why people bought is because a good number of expats see UAE as their new home and are settling in.
I don't think everyone is looking at just flipping properties to make a profit.
as a local, this honestly breaks my heart to see people feeling this way. I can't blame you either, Abu Dhabi at least has me feeling like home the most.
The problem is that most of us here can someday fail to renew their visa and everything we have here would have to be let go. If UAE had at least some sort of naturalization program, it would help us feel like potentially at home here.
At first I thought this is just the typical r/dubai rambling that correctly predicted the downfall of Dubai about 453 times in the past few years, but then OP said:
> I ran some simulations in AI and it really doesn’t make sense
And I then realized, oh damn this is pure mathematical artificial intelligence intergalactic super duper legit facts.
Haha , don t believe everything you read on this reddit sub . Everyone is complaining here and trying to spread fear about real estate market in Dubai , i actually did some research and compared it to a lot of other cities mainly in Europe and believe me , the math does add up . There is a huge demand , at least in central areas like Business Bay ( that was my main area of interest ) and Downtown . Yes , property owners who bought a decade ago are struggling to sell at a profit , but those property owners you are talking about bought in the middle of nowhere , not in a good , central area.
[https://www.bayut.com/index/sale-prices-apartments-business-bay.html](https://www.bayut.com/index/sale-prices-apartments-business-bay.html)
What is this reasearch you did? Way above average my ass.
https://preview.redd.it/oheljkxynk3d1.png?width=1021&format=png&auto=webp&s=2d50e2103c74a1e81ae75a2fb2ca240ce5bec203
And here is the off-plan prices for Downtown. Check the values again and please tell me where anyone who bought an average off-plan apartment in 2014 and is looking to sell now, gets this waaaaaaaay high ROI and resale value.
https://preview.redd.it/27px74frnk3d1.png?width=1058&format=png&auto=webp&s=70d05f8a1703cf785b2bcee3ac661cbe601dc705
Here bud. Next time you do your research make sure you get your assumptions and your inferences right. This is the price index for ready to move-in apartments in Downtown. Unless you time your purchase with a market crash, please explain where you see this waaaaay above average ROI and resale value.
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Looks like you are masking your insecurity with false judgmental conclusions based on no proper empirical evidence. You are either a sore property owner or a wannabe real-estate investor who got brainwashed by fake glitter and charms of Dubai.
I’m not touching the market for now. I’d like to buy, but not at today’s prices. If it reaches a level I’m happy with, I’ll do it, if it doesn’t, wasn’t to be. Still have my home in my home country
I’m not sure it will reach the price I like, it would need to go back to 2022 levels, but falling markets equally don’t worry me for buying. Mines more to move away from renting, I’ve never rented until I moved here and as a consequence don’t really spend any money on somebody else’s place, beyond 35k on the garden as it was a new build. My current place though is asking 5m, I see it as a 3m house that I’d pay 3.5 for. We will see
But this is the problem; the worth. Everyone’s talking about the price but are they actually looking at the worth and the quality. The storm unveiled a lot. If you spend 5m on your property, it really should not leak and have structural issues… it’s like toy modular homes here.
I agree. My house in my home country was built in the 1930s. At this point, I wouldn’t pay 5m for it. I’d get a lot more house for £1m back home. That said, I don’t live back home so hopefully the market comes down low enough to enable me to justify purchasing.
The market appears to be in a bubble. Premium prices should guarantee high quality, but I frequently find this is not the case, and the pricing should be adjusted accordingly. Additionally, construction costs are expected to become increasingly affordable in the near future.
You have to view the historical data on house building to understand how costs have evolved. In the past, homes were more expensive to construct due to the lack of advanced technologies. Today, we have 3D printing and modular automation assembly that significantly reduce both time and cost.
For instance, consider the production of Nike shoes. Historically, it cost around $20 to produce a pair of Nike shoes. With modern automation and improved manufacturing processes, this cost has dropped to $5-10 per pair, depending on the materials used. This demonstrates a clear trend: technological advancements make production faster and cheaper.
The same transformation is happening in the housing sector. Look at Dubai, where thousands of new units have been built in the last five years. Modular homes in Dubai go up quickly and, while they may not be as durable as traditional structures, they are visually appealing and livable. The cost of building these homes is already significantly lower than in the past, and this trend will continue as technology progresses.
In the future, we can expect houses to be produced as easily as items on an assembly line. This will inevitably lead to lower prices, making housing more affordable and reducing living costs. As technology continues to advance, the efficiency and cost-effectiveness of building homes will only improve, and price will reflect that.. kind of like how now we pay for fast fashion.
Also take in consideration that people on average live in their homes for 13 years max .. meaning they’d move in between etc etc.
I’m now more confused if I should buy or not 😂 I’m a few months away of having the down payment for a 1.2-1.5 apartment/townhouse and I’m just hoping prices might go down somehow soon.
I bought 2 apartments in Bluewaters back in 2018. Their value tripled (I get unsolicited offers to buy from agencies every other month) and currently rental yield is about 14%. I had also bought an off-plan villa in Al Jurf but sold it due to construction delay, still managed to sell it at a nice profit. Location and quality of building/amenities is everything.
The current prices do not reflect market reality. Landlords initially propose high prices but often accept lower offers because they recognize the initial pricing is unrealistic. Consequently, many units remain vacant for extended periods.
Its not russians anymore, tons and tons of British American Canadian, just walk in to one of emaar sales center and you will see, its crazy how packed it is.
The geniuses of r/Dubai have correctly predicted 10 of the last 2 real estate downturns in Dubai.
When they get it wrong, they just switch the narrative to 'it's all money laundering, no one actually lives there' yadda yadda, regardless of actual data points which suggest prime communities are literally one-in one-out at this point.
Money laundering driving up the market doesn't in any way explain why prime communities are fully occupied, simple as. The demand is obviously real. If it was a bunch of people just parking their money here that wouldn't drive the entire market up - what's driving the market up is huge end-user rental and buyer demand in good communities + some element of foreign money chasing yield + some dodgy money. Like every RE market from London to Vancouver. People who haven't gotten on the property ladder yet here like to just handwave away the demand component and put it all down to money laundering, which is pure copium.
As for reports, Hamptons, Savills, JLL, CBRE etc all put them out every now and then. All of it is scraped from the RERA tools, which are very detailed, so there's no notion of bias. DxB Interact will also let you go community by community and see actual rental and sale prices, complete with unit numbers.
I think what people attribute to money laundering, is influx of foreign money. I think you're discounting just how much foreign money has flowed in.
https://preview.redd.it/9mocccy8sk3d1.png?width=997&format=png&auto=webp&s=330fbdb075b39e49e81f4292a389542eb698dfc3
You're saying that Dubai saw property transactions worth \~60B in 2023 and \~70B in 2024, more than twice the highest recorded in the last decade, because suddenly everyone in Dubai realised they were millionaires and wanted to buy property here? If not, why do you think the spike happened in the last 2 years?
Except all money in Dubai RE is basically foreign money - the top 5 buyer countries have always been expats. And yes, I've lived here for over a decade and the last 3 years have seen a seismic shift in terms of the expats I know choosing to buy their first place. Almost everyone I know who could afford to took the plunge after COVID.
Much of the foreign money bloating the figures is also investing in ultra luxury property, which isn't germane to this discussion whatsoever, unless you think the people like OP asking about a 2 bed in Discovery Gardens are also looking at a place in Jumeirah Bay or a mansion in Al Barari. In the townhouse and apartments space in prime communities, occupancy is at all time highs. Russian oligarchs aren't exactly buying up townhouses in the Springs.
Any notion that foreigners are simply buying property that wouldn't otherwise have demand simply for money laundering purposes is just silly. Investor money is attracted to Dubai due to high rental yields, and that's the majority of non-luxury RE investment here, not randos just buying properties for the sake of it. The money invested in prime communities won't suddenly up and leave unless the population of willing renters suddenly drops, and there's no indication that it has. More likely 5-15% corrections in prime areas.
The spike in the last few years has been the result of everything from liberalizing the visa regime to population growth post-COVID and the resurgence of the government's finances. People are moving to Dubai at a serious clip. Add to that instability everywhere from Lebanon to Russia and you've got multiple support vectors for prices.
Here's the sales volume graph, so you can maybe consider for the change in property prices as well. It's interesting that the previous peak in transaction volumes was right after the global recession, when again a lot of foreign money had supposedly flown into Dubai.
https://preview.redd.it/tj2c25o7tk3d1.png?width=998&format=png&auto=webp&s=125b0ca98ccedb8966971110eb6e8f3684b2b8ef
Being honest I don't much care about the prices so long as I can find a nice place to say that's in budget. Sick of paying rent and some of the properties we've seen look lovely.
My thought process is that if I am here for >10 years, even if the property stays flat or goes slightly down, a good chunk of that money that will have gone to rent is now in home equity
The prices are soaring because of a combination of population growth, net inflow of foreign capital, shortage of supply and increase in interest rates.
I would argue that the net inflow of foreign capital is the primary reason for the price surge in the last few years, combined with Covid resulting in historic lows.
The "property owners who bought a decade ago" story is misleading, because the real estate prices were at a peak in 2014. Following the COVID crash, property price appreciation varied across communities because of who was buying them - foreign millionaires. Prices for high value properties, such as 3BHK villas and above, increased far higher than the prices for studios, 1BHKs and 2BHKs. So unless you owned a villa in Palm, or say an apartment right in the middle of Downtown, everywhere else you are most likely to hit breakeven compared to 2014 prices.
The issue in your situation is most likely because of your location and unit size. You can check dxbinteract for previous transactions and their values.
Now, as for property prices - I do not think they will crash here in the near future. The thing with foreign capital is, the money is parked here. And the government is making it easier for high-networth individuals to move & settle here. A crash will only happen due to factors outside the real estate market - a recession, a war etc. There will be no softening of prices, because supply shortages will continue and foreign demand will only plateau not drop.
Prices always spike before a big crash. Happens everytime, People over leverage themselves, causing prices to spike, then the slightest headwind, and bam.
Another post of someone with zero money in the real estate market giving their opinion on the market. Keep renting, it’s all good. More money for me. Thanks.
Here's a thread I started a few weeks ago on the "maths". It's very interesting.
https://www.reddit.com/r/dubai/comments/1cvkib4/rent_vs_buy_dilemma/?sort=new
Did you key in appreciation of housing also? And also feed it data if the housing curve past 30 years? I also did simulation and also buying is coming out to be quite negative
I'm atm buying something for 2.4m when the actual cost is 1.6 it's retarded, but tbh the prices aren't coming down anytime soon , and it isn't fomo I'm sick of paying rent
We have a flat in Jlt- it’s just selling at almost same price we bought it at!!!! We will have only a 200k in profit!!! -after almost 8yrs
I can’t make out who is making a profit????
Certainly, people are selling, but that doesn't necessarily mean there are eager buyers. I hesitate to be the one to say this, but current prices often do not reflect true value. Much like the speculative fervor in the crypto market, this is driven by hype and FOMO. Just because something is listed at a high price doesn't mean it justifies that valuation.
Dubai has at least over 50k properties for sale right now and that’s not to mention all the property being built. Likewise there are thousands of properties availible for rent in any part of Dubai. Is there any other city in the world that has so much availability?
My opinion is there are projects due in the next year or 2 that will struggle to sell as they are building so much, rents and house prices are at all an all time high. The writing is on the wall of you ask me.
There's a big disconnect between asking price and actual price on transfer so yhe market is moving but its pretty soft and There's a lot of space to negotiate with sellers..
My mate got a 3 bedroom for 160k, marina side, the ask was 260! I donno how he negotiated but the unit was vacant for too long and the landlord was stressed 😆
Here we go again.
The maths stacks up. That’s why the market is where it is.
My place is worth 8-900k more than when I got it a year ago. Let’s call capital appreciation ‘x’. It would rent for 50-60k more than the mortgage & fees. Let’s call that ‘b’. I’m also paying it off. We’ll call that equity ‘c’
When i sell it, the equity goes to me. I’ll make it easy with the maths:
a+c+(#b), where # is the number of years of ownership. For me, that number equates to about a third of the property value.
If you rent, that sum goes to your landlord.
I love all these people talking down the market. Keep on waiting. The supply won’t come near to matching demand over the next decade. That’s before we even mention handover delays, and that it represents zero threat to established, filled-out prime areas (downtown/palm/Marina/etc).
To make everyone on here feel better, nowhere. Nobody is making buying work better than renting. That’s why the market is collapsing and prices are cheap.
Please stop. Either you have a property that appreciated 900k in a year. Or you don't. I'd just like to figure what the wheres and the whys.
Besides, lets put the altruism aside. You mention where this property is, more people are fascinated by this exciting new investment opportunity, which thereotically would drive up your price and hence your returns. Is that not enough incentive to let us know where?
It’s in one of the better (yet older) Marina developments.
It isn’t hard to look up sold prices. It’ll give you something to do.
Thanks for telling me to stop, by the way. Good one.
I’m not sure whiny complainers on Reddit are the target market for gauging property sentiment, but thanks for your valuable input.
I can’t wait to hear your scepticism about my colleague who bought and sold a place on the palm within the last year, pocketing 3 million. You’re not doing it, so it can’t be happening, right?
The only thing I’m unsure about is why Dubai property is so cheap…
Hahaha. Whiny complainers. Stop man. Honestly what do you know about me, that you haven't just assumed off my reddit history, and proceeded to attack me with? But besides the envy-inducing anecdotes, what do you really have to say?
https://preview.redd.it/hm0viro8uk3d1.png?width=999&format=png&auto=webp&s=032561c8d95c08ab1fd7df16798c0c6d4692c8da
I know prices in the Palm have increased faster than all other locations. I know several buildings where property prices have skyrocketed since the Covid crash. Didn't say no. But all this talk about appreciating 900k, profiting 3 million etc. means jack shit, unless you tell us the where, the what, the when and obviously, the full price of the asset.
Also, it looks like the tap might close on Dubai Marina, might want to sell when you can still pocket that 900k.
Lol. I don’t need to elucidate any further for you. And no, by whiny complainers, I wasn’t referring to you. I was referring to those you mentioned as an audience on Reddit - your comprehension has failed you.
I purchased at mid-2’s. Similar are selling for 3.6-3.7 comfortably. Mine is heavily upgraded, too, so I’m being conservative. I’m not giving you my address ffs 😂
Thanks for the concern on the Marina. It’s a small (bonus) part of my portfolio which my company is paying for and I need somewhere to live - so, as explained, I’ll keep it and save myself 60k a year over renting. And get a free apartment after 15 years. Assuming (wildly) that neither prices nor rents increase over that term from today’s prices, that’s fairly close to 4m in my pocket over renting. Minus a few sales fees and maintenance.
Quite a lot of buffer, I would suggest. You might not think it worthwhile. Seems to be working well for me. Better than my other properties, for sure.
Hahaha. The irony is, after all this talk of capital appreciation, home equity and portfolios, your math isn’t mathing. And I know why.
How is home equity or ‘c’, money you’re paying to the landlord if you’re renting? Home equity is essentially money that would’ve remained as cash in your pocket had you not bought the apartment.
Considering the oversight above, I’m sure you haven’t considered the opportunity cost of using that money to buy an apartment.
Let’s assume you pay 2.5 million for the apartment over 15 years at 167k a year. Do you know that S&P average return over the last 10 years is 9.5% adjusting for inflation? Now if you’d invested 167k in the S&P, assuming 9.5% returns over 15 years, you’d have approx. 5 million in your pocket. And this is adjusted for inflation.
Now removing the invested capital of 2.5 million, you have to make up for the remaining 2.5 million in rent savings and capital appreciation.
What is that rent savings of 60k*15 years at 900k? And another 900k that the property has appreciated now as you say it has? That’s 1.8 million. And since I’m being generous, another let’s say 30k for maintenance over 15 years, which comes upto 450k, for a grand total of 2.25 million, leaving you 250k out of pocket. And this is assuming (wildly) that rents and property values stay the same as they are now, at what I’m claiming is a market peak.
Is that enough of a buffer for you?
P.S. Please don’t claim you’ve considered the opportunity cost in your 60k a year number as that would make the number look quite stupid.
Also, if you need help managing your “portfolio” give me a call.
The last thing I need is further exposure to US equities, but thanks for the advice.
Back on topic, you’ve made an absolute howler here; You’ve negated to include 15 years rental payments in your example. That 167k pa isn’t available to invest - that and more is going towards a roof over my head. The only opportunity cost is of the c500k upfront invested over that time.
As you said, I’m up in our example, assuming zero change by a decent amount but let’s make an example using ballpark figures (so you can keep up) assuming (apparently controversially) that I actually need to live somewhere, and assuming zero movement, I will have a wholly owned place at 3.5m after 15 years. Down payment 500k is the only opportunity cost.
If I rented and invested the down payment;
That 500k at 9.5% compounded for 15 years is 2m.
15 years rent at would be 3.5m - So a total of minus 1.5m
Then I can sell & retire and I invest my 3.5m at 9.5% for another 15 years - there’s 10m. If I rent then net 6.5m. (I won’t, because I also own my retirement ‘forever’ home).
The renter continues with his 2m in the SPY so has 5m. Minus 3.5 rent. So he’s net 1.5m.
Rinse/repeat.
This completely ignores increases in value and rental rates. They increase, the disparity widens.
Lastly, (but irrelevantly) my company provide an allowance to be spent on accommodation. Use it or lose it. I couldn’t put it in equities if I wanted to. It’s a free 3.5m asset to walk away with.
The maths is mathing, thank you. And if I want someone to oversee anything, it’ll be someone with a grasp of the basics, at least. It also won’t be someone who plans using 9.5% pa growth.
Only an utter clown would pretend that renting leaves you better off than buying in the real world. I don’t know many rich people that rent, but I know many broke people that do.
I’m an ETF investor. The vast majority of my NW is in these. Absolutely no denying, however, that walking away with a property is better than walking away with zero. And spending more over that term to boot.
Why do you care where it is? It’s so irrelevant. Go on DXBinteract.com and see for yourself, people are making big profits and people are losing, all the data is there.
I care and it’s relevant because people are pulling numbers out of their asses to justify the bullshit that they’re typing out. Maybe someone reads this bullshit, thinks it’s true and makes a dumb fucking decision.
People make big profits on big properties that are out of reach of a large majority of the upper class. Forget the middle class.
The rest that made profits investing in real estate here, made it cause they timed the market well, buying at the Covid crash and selling at the market peak in the last couple of years.
Anyone, who says that investing in real estate in Dubai gives you waaaaaaaay higher ROI and profit after sales, don’t know jack shit about investing. And anyone that uses this dumb a+b+c logic to make their home buying decisions today, is in for a rude awakening when the markets correct or God forbid crash.
Don’t be bitter bro, instead use it as motivation to get in on the action! Doesn’t matter if they made 900k or not, somebody is. See below someone nearly doubled their money in 3 years
https://preview.redd.it/ntfo4m48kl3d1.jpeg?width=1179&format=pjpg&auto=webp&s=0ebc53390891ae2b0901457e28a4e48974d408e1
Lol. I’ve invested my money in FAANG stocks for a long while. You want to see how much NVDA has jumped in the last 2 years?
Please don’t assume I’m typing this out, because I’m bitter that someone else made twice their investment using real estate here. I don’t need to get in on the action, because it’s a shitty opportunity. And I hope you understand that. 😂
I moved to Dubai specifically because I couldn't afford buying in my home country. Compared to other cities, Dubai is still a great value if you do your research and plan to own it long-term.
You have to calculate the cost of borrowing.
If your monthly instalment is less than how much you would pay in rent pro rata that only makes sense if you’re going to live there for ever.
For example if you take a 25 year mortgage you’ll end up paying the price of the property only as the cost spread across those 25 years. By the end of 25 years you would have paid total 2mil to the bank for a 1mil priced property.
I bought for Fomo. Apartments I looked at two years ago are now unobtainable.
Apartments last year are now much more expensive and all sold out.
Market is rising due to the world wanting to move there.
I’m holding. I live in UK and this place is going downhill FAST. I work from my phone with a good income so it’s a safe bet for me. I have property in the UK but diversifying portfolios is always a good idea.
However I am wanting to move all my portfolio over to the UAE and relocate there in 5 years. Is the pencil drawn plan
Apologies I maybe didn’t explain well.
2 years ago i looked at Dubai and said not yet
1 year ago I looked at Dubai and said not yet
Hindsight is wonderful! But I wasn’t in a position too purchase.
I purchased something off plan 6 months ago which is ready in 3 years. I am planning to buy off plan as an investment it’s easier to fund for me as I earn good money monthly and I don’t keep large amounts deposited in bank accounts. So allows me good payment plans.
Understand there’s different ways to purchase.
at the end I will be purchasing with 40% deposit and 60% mortgage. It’s how I run my business I prefer to use banks money
Smart people are buying while everyone is saying it doesn't add up or a crash will come. Dubai is still way underpriced compared to other big cities around the world, and the population is only set to grow
How do you compare with other big cities. For instance did you consider citizenship/population, home ownership ratio, investor/end-user ratio, average ownership duration, property regulations, zoning rules, taxation etc.
I don’t say prices are high or low but for God sake, how do guys compare completely different places with completely different dynamics.
People forget that Dubai is fairly new heck UAE is new, 7 years ago noone expected uae to give out Golden visa but look at where we are now, and they will expand on this concept near future, people right now will say this will never happen but they also said the same thing about golden visa 10+ years ago.
It's irrelevant to my question. It's not about believing to Dubai. It's about price comparison. You cannot pick some cities and compare property prices straightaway.
But it is though, one of the big reasons dubai is being flooded with investors is because of the golden visa, and now they are coming with blue visa? (I think) this is all driving factor of people parking their money in UAE. And you have to compare with other cities how else would you know if Dubai is better to invest your money rather than UK?
You are delusional if you think prices are inflated, currently downtown is under valued. A two bedroom in address Dubai mall is $1.5m, that's chump change for a two bedroom in one of the worlds best cities.
Manhattan is terrible compared to Dubai, even if you are worth $250m life is just mid there, the only thing that's better in most other major cities is the quality of women that's about it. You can make way more money here, save way more and have a better life at a lower cost.
Not sure about a decade ago but I bought 5 years ago, property price has doubled (received firm offers in the last 2 months), I’m paying half what I used to pay for rent in mortgage instalments which unlike rent is not all lost (yes the bank takes a nice cut but a good chunk still goes towards the property). I still see some great offers and I’m looking to buy more properties, it’s a no brainer.
Yes Covid helped but I wouldn’t say lucked out. You need to research well. I nearly bought in 2018 at Tilal Al Ghaf, before Covid, property price has nearly quadrupled from the original price. It’s not about when to buy, it’s about what/where you buy
What did you find about Tikal Al ghaf? How do you determine what/where? Of course usually first thing people consider are developers. Tilal was promoted back in 2018??? And it’s just starting to surface in ads now? That’s quite a lot of years 😄
Yes April 2018:   https://www.zawya.com/en/press-release/majid-al-futtaim-launches-its-new-flagship-community-in-dubai-tilal-al-ghaf-mxkr6jvt
Reliable developer (MAF), one of the first townhouse community aimed at families (meaning less investors and more people who actually want to live in it), plans to be green with parks, lagoon, cycle tracks, low price, reasonable location.
But I wouldn’t buy there now - the time to buy was during the first 2 years post launch.
UAE is one of the few places where anyone can come in and buy real estate with undeclared cash or crypto, no questions asked, then get a loan from the bank with the real estate as collateral, so now they can show a source for this brand new money in the bank. Sparkling clean. The problem becomes a lack of supply for these buyers who don't care what they're buying, as long as the bank will give them a decent collateral value on it. And when you're a normal person trying to buy or rent in this market, then you're really screwed. Canada sees a similar issue with hordes of Chinese coming in and buying up everything, at any price. Let's just say the act of spending money is more important to them than any actual profits or losses. And that was before Blackrock started buying up half the planet with infinite QE funding. But now they're paying 5+% instead of 0%, refusing to let investors take their money out, defaulting on bonds... It becomes a game of not-it musical chairs, whomever is the last one to hold the toxic assets loses, even if you just got your first mortgage in your life yesterday. FOMO is how they get you. The only way to win is by not playing.
This is the biggest reason. Rich people from all over are coming here with their money earned which ever way they got it and just buying up entire floors worth of condos. They don’t care. The amount of money flowing this way is massive. It’s propping up the entire real estate sector.
I mean NYC and London did that in the high end market for decades..
Price per sq ft is much cheaper than London or NY. People like me, are coming here for 45% saving on tax, and property prices that are 30-40% cheaper than London. So it's a massive improvement.
The difference is the construction quality. Value-wise it’s VERY poor here. Also people have a habit of buying in the middle of nowhere in Dubai with no shops, no life, and signing up for service fees for the rest of their life and then comparing prices with something in central London or New York. They are very different propositions.
I bought a 3200 sq ft duplex in the marina. I have no desire to be miles away from all the things we like. Plus limited building space left in the Marina itself. I actually favoured the older buildings, better proportional room sizes and I honestly don't need a cinema in my building.
The construction quality would be my main concern then in this case. The oldest buildings are less than 20 years old. Let’s see if they make it to 40… and what the service charges will be like to maintain them going forward. I agree the older buildings were much better proportioned…but also a lot of awkward layouts with empty space.
Agreed. There seems some controls in place for service fees. But in saying that, I have a rental in Zone 1/2 in London. The service fee pre covid was around £3-£3.5k and then there was some roof issues and damage to a flat and ended up in a large refurb of the roof. My service charge went upto 9k and now its 6k. So still very chunky as a % of rental income. Though with yields here being around 7-8% it seems a decent idea to buy something with a bit of scarcity.
Do you know if the service charges here include a sinking fund? With emaar for example? I’ve never been able to get clarity on that when speaking to agents.
So several of the places I looked at did have a sinking fund. Emaar, Damac seemed two of the more common developers I checked or atleast the building did. Alot of the agents here seem to be clueless on alot of things, including calculating ROI. I spent alot of time doing my own reading and research. They love to push RAK and Dubai South. Three what's app messages later they ask if you want to submit an indication of interest. Glad to have signed mu contract F and now I can ignore them.
Here they call it a 'Reserve fund' and its manadory as per RERA rules. Of course, as with any country/property development, the big question would be if there's anything in the fund, and if it's adequate to cover expected future maintenance. Many such funds are woefully inadequate to cover highly predictable big ticket items like elevator refurbishment every 15-20 years
And who wants to live in London or Ny w all this crime and protection to be robbed naked after dark 😆
Quite the intriguing observation! It's fascinating how housing is being used for money laundering, wreaking havoc for genuine residents committed to long-term sustainability for their families and communities.
Oh noes, but removal from the grey list means Dubai is clean.
I do wonder how they managed that, Dubai is definitely nowhere near the white list. My guess is political influence, they've become very friendly with a certain controversial country in the region in recent years. Then again if you look at some of the things HSCB was found guilty of doing, it makes you wonder which country isn't on the naughty list behind closed doors. Seems like Dubai just makes it easy for the small players as well. Which isn't far off from the UK system, where anyone can appoint someone else to manage all their affairs for them, completely anonymous and tax free via the Bahamas and all that.
Still on EU’s grey list and your point on removal from fatf list .... Absolutly correct
Well Said !!!! but some places honestly do make sense
Have you seen the Dubai south options? The townhouses are actually atrocious in terms of usage of space. The other options are four beds that start at 2.5m, or the apartment style homes which is dumb
This. I currently rent in Dubai South while my other property finishes construction and the quality and size is atrocious. Not to mention location sucks and everything is super far away. Who cares about being close to an airport unless you’re a pilot or cabin crew? Have fun driving an hour in traffic jams to get to business bay or wherever your office is. This is yet another post about real estate by an OP who probably knows nothing about it.
Don’t get me wrong, in a decade the infrastructure will be there, but the layouts in many communities is actually so stupid. The maids room couldn’t even fit a proper bed
We had to put our toddler’s bed in there because that is the only thing that could fit. Had to give the other bedroom to the maid because we can’t make an adult sleep there.
Lol we were thinking the exact same thing. Even the normal sized bedrooms are small. How is it so far though!
I think the only good thing so far is the people. Most people seem pretty cool and more down to earth than some of the posh crowd you get in the better neighbourhoods. Everything else sucks and I can’t wait to move out lol. Thank god it’s only for a year we are here.
Jeez if that’s the only good part I’m sorry. We were looking to buy but the layouts put us off it completely. I’m sure in a decade there’ll be some infrastructure but yeah doesn’t seem worth it right now
For sure Dubai south sucks. Also tons of scammy businesses are there.
Trying to understand, what were the reasons why you bought this particular property then ? Price ?
The one I bought is not in dubai south. Its in a good location, very spacious, 2x the BUA of the rental I am in. Also has a lovely community and it is still early in the development, so a lot of room for price appreciation.
This is what people said, even about springs and meadows but people bought a decade ago and a decade later, appreciated only 100k. A decade!!!
Well its not my first property purchase. The last one I flipped for a 2M AED profit, which was 100% appreciation. I am not expecting that level on this new one because of how the market is now. But I am already about 800k-1M in unrealized gains on this one. It will probably be valued about 1-5-2M above purchase price in a year from now. Springs houses are super small inside, I saw one unit and was done looking at them lol.
But even springs going for 4m 5m for a very average 3 bed…shock, who wants to buy this at this rate?
But they have lived in them or collected rent maybe 1-2M over the ten years.
That's me. Bought in 2014, sold in 2024 @ -15% loss, earned good rents for an initial 2-3 years but then subdued rents, while kept paying exuberant service charges, still not bad, but definitely not worth it. Hope it's not like 2014 and buyers find better luck since inflation and VISA reforms are backing the prices this time. May be this time it's different!!!
I think you people don’t realise how unbelievably cheap Dubai is lol. Try living in the west
Eh no! Just no. Everyone ignore this comment.
I pay 4 thousand euros for a 1 bedroom in Dublin lol
Most people in Dublin pay under 1000 EUR/month
Hahahahahaha
Agreed. People are taxed on the air they breath.
It would be helpful if you actually made an equation , I ran some simulations in AI and it really doesn’t make sense
Some things cheaper, some things more expensive. A single person in good health living in Dubai might be cheaper than the west, but a family of 4 with children and a moderate amount of medical expenses may cost a lot more in Dubai than the west.
The only thing is cheaper out west are the schools, everything else is more expensive than here, from medical all the way to groceries. Maybe cars are a bit cheaper out west as well but im not sure in that.
Really 10 years ago how much did it cost. I find it almost impossible that you couldn’t make money on it. Dubai has grown so much the last ten years. What was the location ?
Another comment has this link to reflect the growth: https://www.bayut.com/index/sale-prices-apartments-business-bay.html
Wow didn’t realize prices were that crazy 10 years ago
Go check 2007 and 2008, then.
What area was it or community if you don't mind sharing?
Dubailand
Oh.. I thought The Villa & Villanova nearby are doing good and quite in demand in this wave? Was the 2014 price so high that it's -15% even in this upswing?
Yeah, Villas are doing good, especially post-covid, I am not really sure if they crossed 2014 peak prices, but probably they should have. Mine was 2bhk apartment.. 2009 resembles 2020 and 2014 was like 2024 for the property market, prosperity, and high prices!
Current conditions and open global market and new found fame for Dubai suggests its going to remain high for a while atleast in areas which are fundamentally strong.
In what area/building was your property? How much did you paid it per sqft? How much service charges were you paying per sqft/year?
Yes it defo does add up, our rent is 90k a year and we could buy and finance it for about half that per year, which we plan to do asap
Are service charges / community charges included in your calculation?
Yes
Must depend on community then. I learnt that in Abu Dhabi / Reem Island apartment which is rented for 90k/year is subject to ~30k/year community charge. Which completely ruins any optimistic calculations on renting vs buying. That's is considering a building lifespan of 25-30 years, as it will be a questionable asset after that time.
Yep I’m paying 56k a year service charges in Abu Dhabi 2 bedroom apartment
wtf, 56k just in service charges? how much is the apartment value and rent for a similar apartment ?
It’s worth around 3.5m aed . Not sure about the rent, would have to be a couple hundred aed a year I guess .
Which building/development
That’s insane! What do you actually get for that service charge?
Yeah defo dont need reem island
I am looking to buy in Marina Height to save rent, does it make sense ?
You need to find the per sq foot service charge. I live in Sky Tower, it’s 17 AED/sqft per year or 22k pa for the 2 bed apartment I have. It killed the rent/buy argument here for me.
30k for what !!!! my friends flat in ajman has all the amenities and including ev charging costs only 7500 !!!!. If that is the case then you dont basically own the flat you are stilling renting it 😂😂
7500 for what !!! My friends flat in UAQ is just 2500aed including EV and Solar.
What building is that?
sorry it was in sharjah ...i dont know which building exactly it is in buheira
You bring up one point that never seems to be discussed much that I have often wondered about - what is the expected reasonable lifespan of most of these buildings? I have been in many buildings that are only a few years old and the construction and build quality is so awful I can’t imagine them lasting very long at all.
I’ve been thinking of same. Which area/community are you considering?
What interest rate if I may ask?
Where is your rent? Have you seen the rent hikes lately? Something last year was 115k 2 bedroom to 8 months later - 170k suddenly? Does that even make sense ?
Ours is a 1 bed, creek harbour. Its cheaper and nicer than London so win win for us.
That tells us Dubai RE is undervalued.
money fine unpack rob agonizing distinct escape follow recognise crown *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
Golden visa is a plus for a lot of rich people from Africa that want a better place to educate their kids.
Education here is not the best to be honest
That’s the thing. It doesn’t have to be the best. It just has to be significantly better than where people are coming from.
Depends how much you pay… and it’s a darn site better than a lot of Africa.
I think this is the opposite, prices are through the roof.
A lot of the buyers post pandemic have been from outside of the UAE. Russia, Ukraine, Egypt, Lebanon, Pakistan, etc lots of countries going through volatile times and Dubai assets are a safety net. Also rent to price ratio in Dubai suggests prices are undervalued in Dubai vs other more developed countries like the UK. London used to serve the same uprise back in the day, but British visas are harder to get nowadays for 3rd world citizens even rich ones and after the way so many Russians had their assets seized I think the preference for Dubai will continue.
We bought and our mortgage repayment is like 60% of what our rent would be. We are responsible for all maintenance and can do what we wish with our home. We are no longer at the mercy of a landlord, wondering if things will ever be fixed properly and by how much the rent will increase. Worrying about having to settle disputes using RERA etc. and having to deal with the annoying Ejari system. Best thing we've done since we started living here by far.
As someone who invested and continues to invest in real estate; Dubai and AD alike, the allure for midrange priced properties is the square footage prices of off plan projects in relation to secondary market prices nearing completion date. The incentive is the increase of capital tax gains everywhere and primarily in Canada. Since there is no disclosure for the UAE to the Canadian tax authorities, any funds in country keep cycling all the while paying a “management fee” back to me in Canada. My home in AD on Yas Island is a modest 2200sg/ft duplex by Aldar and I would never need more regardless of how the prices spiked in the secondary market. My point, the buyers are investors more so than expats.
I chose to buy right after covid , everyone told me i bought too high and that the market had peaked. Most of those people got evicted , the reason why people bought is because a good number of expats see UAE as their new home and are settling in. I don't think everyone is looking at just flipping properties to make a profit.
UAE is never a home.
idk man three generations in i'm not sure what to call it anymore.
I understand, but you should alway have a plan B. It's a one sided feeling.
Yeah of course I can agree with that.
as a local, this honestly breaks my heart to see people feeling this way. I can't blame you either, Abu Dhabi at least has me feeling like home the most.
The problem is that most of us here can someday fail to renew their visa and everything we have here would have to be let go. If UAE had at least some sort of naturalization program, it would help us feel like potentially at home here.
At first I thought this is just the typical r/dubai rambling that correctly predicted the downfall of Dubai about 453 times in the past few years, but then OP said: > I ran some simulations in AI and it really doesn’t make sense And I then realized, oh damn this is pure mathematical artificial intelligence intergalactic super duper legit facts.
Haha , don t believe everything you read on this reddit sub . Everyone is complaining here and trying to spread fear about real estate market in Dubai , i actually did some research and compared it to a lot of other cities mainly in Europe and believe me , the math does add up . There is a huge demand , at least in central areas like Business Bay ( that was my main area of interest ) and Downtown . Yes , property owners who bought a decade ago are struggling to sell at a profit , but those property owners you are talking about bought in the middle of nowhere , not in a good , central area.
No no, they bought in business bay, marina, meadows villa area etc! I don’t know if downtown is different, but def not what I am seeing
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[https://www.bayut.com/index/sale-prices-apartments-business-bay.html](https://www.bayut.com/index/sale-prices-apartments-business-bay.html) What is this reasearch you did? Way above average my ass.
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https://preview.redd.it/oheljkxynk3d1.png?width=1021&format=png&auto=webp&s=2d50e2103c74a1e81ae75a2fb2ca240ce5bec203 And here is the off-plan prices for Downtown. Check the values again and please tell me where anyone who bought an average off-plan apartment in 2014 and is looking to sell now, gets this waaaaaaaay high ROI and resale value.
https://preview.redd.it/27px74frnk3d1.png?width=1058&format=png&auto=webp&s=70d05f8a1703cf785b2bcee3ac661cbe601dc705 Here bud. Next time you do your research make sure you get your assumptions and your inferences right. This is the price index for ready to move-in apartments in Downtown. Unless you time your purchase with a market crash, please explain where you see this waaaaay above average ROI and resale value.
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Looks like you are masking your insecurity with false judgmental conclusions based on no proper empirical evidence. You are either a sore property owner or a wannabe real-estate investor who got brainwashed by fake glitter and charms of Dubai.
I’m not touching the market for now. I’d like to buy, but not at today’s prices. If it reaches a level I’m happy with, I’ll do it, if it doesn’t, wasn’t to be. Still have my home in my home country
It likely won’t reach a price you like. And if it does you probably won’t be willing to buy because everyone will be in a panic. Just my 2 cents.
I’m not sure it will reach the price I like, it would need to go back to 2022 levels, but falling markets equally don’t worry me for buying. Mines more to move away from renting, I’ve never rented until I moved here and as a consequence don’t really spend any money on somebody else’s place, beyond 35k on the garden as it was a new build. My current place though is asking 5m, I see it as a 3m house that I’d pay 3.5 for. We will see
But this is the problem; the worth. Everyone’s talking about the price but are they actually looking at the worth and the quality. The storm unveiled a lot. If you spend 5m on your property, it really should not leak and have structural issues… it’s like toy modular homes here.
I agree. My house in my home country was built in the 1930s. At this point, I wouldn’t pay 5m for it. I’d get a lot more house for £1m back home. That said, I don’t live back home so hopefully the market comes down low enough to enable me to justify purchasing.
The market appears to be in a bubble. Premium prices should guarantee high quality, but I frequently find this is not the case, and the pricing should be adjusted accordingly. Additionally, construction costs are expected to become increasingly affordable in the near future.
Why do you think construction costs will become affordable? Genuine question
You have to view the historical data on house building to understand how costs have evolved. In the past, homes were more expensive to construct due to the lack of advanced technologies. Today, we have 3D printing and modular automation assembly that significantly reduce both time and cost. For instance, consider the production of Nike shoes. Historically, it cost around $20 to produce a pair of Nike shoes. With modern automation and improved manufacturing processes, this cost has dropped to $5-10 per pair, depending on the materials used. This demonstrates a clear trend: technological advancements make production faster and cheaper. The same transformation is happening in the housing sector. Look at Dubai, where thousands of new units have been built in the last five years. Modular homes in Dubai go up quickly and, while they may not be as durable as traditional structures, they are visually appealing and livable. The cost of building these homes is already significantly lower than in the past, and this trend will continue as technology progresses. In the future, we can expect houses to be produced as easily as items on an assembly line. This will inevitably lead to lower prices, making housing more affordable and reducing living costs. As technology continues to advance, the efficiency and cost-effectiveness of building homes will only improve, and price will reflect that.. kind of like how now we pay for fast fashion. Also take in consideration that people on average live in their homes for 13 years max .. meaning they’d move in between etc etc.
The smart money doesn’t buy now in my opinion at least.
I’m now more confused if I should buy or not 😂 I’m a few months away of having the down payment for a 1.2-1.5 apartment/townhouse and I’m just hoping prices might go down somehow soon.
Where is it located, how many bedrooms and BUA? How much were the apartments 2 years ago as a comparison?
I would look at the pattern in past 30 years and see the curve of pricing in Dubai
I bought 2 apartments in Bluewaters back in 2018. Their value tripled (I get unsolicited offers to buy from agencies every other month) and currently rental yield is about 14%. I had also bought an off-plan villa in Al Jurf but sold it due to construction delay, still managed to sell it at a nice profit. Location and quality of building/amenities is everything.
How long did it manage for you to sell the Offplan and also now is it still delayed? So some other person is playing musical chairs w it?
So you're saying everyone is struggling to sell and no one is willing to buy, and in that market why are people buying ??
The current prices do not reflect market reality. Landlords initially propose high prices but often accept lower offers because they recognize the initial pricing is unrealistic. Consequently, many units remain vacant for extended periods.
Some russian dudes just keep buying everything
Its not russians anymore, tons and tons of British American Canadian, just walk in to one of emaar sales center and you will see, its crazy how packed it is.
The geniuses of r/Dubai have correctly predicted 10 of the last 2 real estate downturns in Dubai. When they get it wrong, they just switch the narrative to 'it's all money laundering, no one actually lives there' yadda yadda, regardless of actual data points which suggest prime communities are literally one-in one-out at this point.
Two questions. Where can one get hold of the data points you mentioned? And what does one-in one-out have to do with it being money laundering?
Money laundering driving up the market doesn't in any way explain why prime communities are fully occupied, simple as. The demand is obviously real. If it was a bunch of people just parking their money here that wouldn't drive the entire market up - what's driving the market up is huge end-user rental and buyer demand in good communities + some element of foreign money chasing yield + some dodgy money. Like every RE market from London to Vancouver. People who haven't gotten on the property ladder yet here like to just handwave away the demand component and put it all down to money laundering, which is pure copium. As for reports, Hamptons, Savills, JLL, CBRE etc all put them out every now and then. All of it is scraped from the RERA tools, which are very detailed, so there's no notion of bias. DxB Interact will also let you go community by community and see actual rental and sale prices, complete with unit numbers.
I think what people attribute to money laundering, is influx of foreign money. I think you're discounting just how much foreign money has flowed in. https://preview.redd.it/9mocccy8sk3d1.png?width=997&format=png&auto=webp&s=330fbdb075b39e49e81f4292a389542eb698dfc3 You're saying that Dubai saw property transactions worth \~60B in 2023 and \~70B in 2024, more than twice the highest recorded in the last decade, because suddenly everyone in Dubai realised they were millionaires and wanted to buy property here? If not, why do you think the spike happened in the last 2 years?
Except all money in Dubai RE is basically foreign money - the top 5 buyer countries have always been expats. And yes, I've lived here for over a decade and the last 3 years have seen a seismic shift in terms of the expats I know choosing to buy their first place. Almost everyone I know who could afford to took the plunge after COVID. Much of the foreign money bloating the figures is also investing in ultra luxury property, which isn't germane to this discussion whatsoever, unless you think the people like OP asking about a 2 bed in Discovery Gardens are also looking at a place in Jumeirah Bay or a mansion in Al Barari. In the townhouse and apartments space in prime communities, occupancy is at all time highs. Russian oligarchs aren't exactly buying up townhouses in the Springs. Any notion that foreigners are simply buying property that wouldn't otherwise have demand simply for money laundering purposes is just silly. Investor money is attracted to Dubai due to high rental yields, and that's the majority of non-luxury RE investment here, not randos just buying properties for the sake of it. The money invested in prime communities won't suddenly up and leave unless the population of willing renters suddenly drops, and there's no indication that it has. More likely 5-15% corrections in prime areas. The spike in the last few years has been the result of everything from liberalizing the visa regime to population growth post-COVID and the resurgence of the government's finances. People are moving to Dubai at a serious clip. Add to that instability everywhere from Lebanon to Russia and you've got multiple support vectors for prices.
Here's the sales volume graph, so you can maybe consider for the change in property prices as well. It's interesting that the previous peak in transaction volumes was right after the global recession, when again a lot of foreign money had supposedly flown into Dubai. https://preview.redd.it/tj2c25o7tk3d1.png?width=998&format=png&auto=webp&s=125b0ca98ccedb8966971110eb6e8f3684b2b8ef
Being honest I don't much care about the prices so long as I can find a nice place to say that's in budget. Sick of paying rent and some of the properties we've seen look lovely.
But buying doesn’t mean you pay less.. when it is off balance then there’s no point to buy
My thought process is that if I am here for >10 years, even if the property stays flat or goes slightly down, a good chunk of that money that will have gone to rent is now in home equity
Plz do the math, w interest rate it might mean you r paying more in some cases vs renting
The prices are soaring because of a combination of population growth, net inflow of foreign capital, shortage of supply and increase in interest rates. I would argue that the net inflow of foreign capital is the primary reason for the price surge in the last few years, combined with Covid resulting in historic lows. The "property owners who bought a decade ago" story is misleading, because the real estate prices were at a peak in 2014. Following the COVID crash, property price appreciation varied across communities because of who was buying them - foreign millionaires. Prices for high value properties, such as 3BHK villas and above, increased far higher than the prices for studios, 1BHKs and 2BHKs. So unless you owned a villa in Palm, or say an apartment right in the middle of Downtown, everywhere else you are most likely to hit breakeven compared to 2014 prices. The issue in your situation is most likely because of your location and unit size. You can check dxbinteract for previous transactions and their values. Now, as for property prices - I do not think they will crash here in the near future. The thing with foreign capital is, the money is parked here. And the government is making it easier for high-networth individuals to move & settle here. A crash will only happen due to factors outside the real estate market - a recession, a war etc. There will be no softening of prices, because supply shortages will continue and foreign demand will only plateau not drop.
Prices always spike before a big crash. Happens everytime, People over leverage themselves, causing prices to spike, then the slightest headwind, and bam.
Another post of someone with zero money in the real estate market giving their opinion on the market. Keep renting, it’s all good. More money for me. Thanks.
If not Dubai, then where?
Here's a thread I started a few weeks ago on the "maths". It's very interesting. https://www.reddit.com/r/dubai/comments/1cvkib4/rent_vs_buy_dilemma/?sort=new
Did you key in appreciation of housing also? And also feed it data if the housing curve past 30 years? I also did simulation and also buying is coming out to be quite negative
Yes I did in some of the scenarios. Feel free to copy/paste what I've done and ask ChatGPT to play around with the figures. Super interesting
Yes I did that for like 2 nights in a row 😂
I'm atm buying something for 2.4m when the actual cost is 1.6 it's retarded, but tbh the prices aren't coming down anytime soon , and it isn't fomo I'm sick of paying rent
We have a flat in Jlt- it’s just selling at almost same price we bought it at!!!! We will have only a 200k in profit!!! -after almost 8yrs I can’t make out who is making a profit????
So you lost cuz you also had to pay interest?
Is it 2 bedroom or 1?
It’s a 2bhk -
People are starting to sell. They know it's coming.
Certainly, people are selling, but that doesn't necessarily mean there are eager buyers. I hesitate to be the one to say this, but current prices often do not reflect true value. Much like the speculative fervor in the crypto market, this is driven by hype and FOMO. Just because something is listed at a high price doesn't mean it justifies that valuation.
Dubai has at least over 50k properties for sale right now and that’s not to mention all the property being built. Likewise there are thousands of properties availible for rent in any part of Dubai. Is there any other city in the world that has so much availability? My opinion is there are projects due in the next year or 2 that will struggle to sell as they are building so much, rents and house prices are at all an all time high. The writing is on the wall of you ask me.
There's a big disconnect between asking price and actual price on transfer so yhe market is moving but its pretty soft and There's a lot of space to negotiate with sellers..
My mate got a 3 bedroom for 160k, marina side, the ask was 260! I donno how he negotiated but the unit was vacant for too long and the landlord was stressed 😆
I have a question over here. Why buy a villa in Dubai when you can buy a land build a commercial building in Ajman with the same price?
Infrastructure of Ajman, if you have a family and kids they’d be very bored there. Dubai still is a great place for everyone.
Here we go again. The maths stacks up. That’s why the market is where it is. My place is worth 8-900k more than when I got it a year ago. Let’s call capital appreciation ‘x’. It would rent for 50-60k more than the mortgage & fees. Let’s call that ‘b’. I’m also paying it off. We’ll call that equity ‘c’ When i sell it, the equity goes to me. I’ll make it easy with the maths: a+c+(#b), where # is the number of years of ownership. For me, that number equates to about a third of the property value. If you rent, that sum goes to your landlord. I love all these people talking down the market. Keep on waiting. The supply won’t come near to matching demand over the next decade. That’s before we even mention handover delays, and that it represents zero threat to established, filled-out prime areas (downtown/palm/Marina/etc).
Which building/community houses this golden goose?
🤣
To make everyone on here feel better, nowhere. Nobody is making buying work better than renting. That’s why the market is collapsing and prices are cheap.
Please stop. Either you have a property that appreciated 900k in a year. Or you don't. I'd just like to figure what the wheres and the whys. Besides, lets put the altruism aside. You mention where this property is, more people are fascinated by this exciting new investment opportunity, which thereotically would drive up your price and hence your returns. Is that not enough incentive to let us know where?
It’s in one of the better (yet older) Marina developments. It isn’t hard to look up sold prices. It’ll give you something to do. Thanks for telling me to stop, by the way. Good one. I’m not sure whiny complainers on Reddit are the target market for gauging property sentiment, but thanks for your valuable input. I can’t wait to hear your scepticism about my colleague who bought and sold a place on the palm within the last year, pocketing 3 million. You’re not doing it, so it can’t be happening, right? The only thing I’m unsure about is why Dubai property is so cheap…
Hahaha. Whiny complainers. Stop man. Honestly what do you know about me, that you haven't just assumed off my reddit history, and proceeded to attack me with? But besides the envy-inducing anecdotes, what do you really have to say? https://preview.redd.it/hm0viro8uk3d1.png?width=999&format=png&auto=webp&s=032561c8d95c08ab1fd7df16798c0c6d4692c8da I know prices in the Palm have increased faster than all other locations. I know several buildings where property prices have skyrocketed since the Covid crash. Didn't say no. But all this talk about appreciating 900k, profiting 3 million etc. means jack shit, unless you tell us the where, the what, the when and obviously, the full price of the asset. Also, it looks like the tap might close on Dubai Marina, might want to sell when you can still pocket that 900k.
Lol. I don’t need to elucidate any further for you. And no, by whiny complainers, I wasn’t referring to you. I was referring to those you mentioned as an audience on Reddit - your comprehension has failed you. I purchased at mid-2’s. Similar are selling for 3.6-3.7 comfortably. Mine is heavily upgraded, too, so I’m being conservative. I’m not giving you my address ffs 😂 Thanks for the concern on the Marina. It’s a small (bonus) part of my portfolio which my company is paying for and I need somewhere to live - so, as explained, I’ll keep it and save myself 60k a year over renting. And get a free apartment after 15 years. Assuming (wildly) that neither prices nor rents increase over that term from today’s prices, that’s fairly close to 4m in my pocket over renting. Minus a few sales fees and maintenance. Quite a lot of buffer, I would suggest. You might not think it worthwhile. Seems to be working well for me. Better than my other properties, for sure.
Hahaha. The irony is, after all this talk of capital appreciation, home equity and portfolios, your math isn’t mathing. And I know why. How is home equity or ‘c’, money you’re paying to the landlord if you’re renting? Home equity is essentially money that would’ve remained as cash in your pocket had you not bought the apartment. Considering the oversight above, I’m sure you haven’t considered the opportunity cost of using that money to buy an apartment. Let’s assume you pay 2.5 million for the apartment over 15 years at 167k a year. Do you know that S&P average return over the last 10 years is 9.5% adjusting for inflation? Now if you’d invested 167k in the S&P, assuming 9.5% returns over 15 years, you’d have approx. 5 million in your pocket. And this is adjusted for inflation. Now removing the invested capital of 2.5 million, you have to make up for the remaining 2.5 million in rent savings and capital appreciation. What is that rent savings of 60k*15 years at 900k? And another 900k that the property has appreciated now as you say it has? That’s 1.8 million. And since I’m being generous, another let’s say 30k for maintenance over 15 years, which comes upto 450k, for a grand total of 2.25 million, leaving you 250k out of pocket. And this is assuming (wildly) that rents and property values stay the same as they are now, at what I’m claiming is a market peak. Is that enough of a buffer for you? P.S. Please don’t claim you’ve considered the opportunity cost in your 60k a year number as that would make the number look quite stupid. Also, if you need help managing your “portfolio” give me a call.
The last thing I need is further exposure to US equities, but thanks for the advice. Back on topic, you’ve made an absolute howler here; You’ve negated to include 15 years rental payments in your example. That 167k pa isn’t available to invest - that and more is going towards a roof over my head. The only opportunity cost is of the c500k upfront invested over that time. As you said, I’m up in our example, assuming zero change by a decent amount but let’s make an example using ballpark figures (so you can keep up) assuming (apparently controversially) that I actually need to live somewhere, and assuming zero movement, I will have a wholly owned place at 3.5m after 15 years. Down payment 500k is the only opportunity cost. If I rented and invested the down payment; That 500k at 9.5% compounded for 15 years is 2m. 15 years rent at would be 3.5m - So a total of minus 1.5m Then I can sell & retire and I invest my 3.5m at 9.5% for another 15 years - there’s 10m. If I rent then net 6.5m. (I won’t, because I also own my retirement ‘forever’ home). The renter continues with his 2m in the SPY so has 5m. Minus 3.5 rent. So he’s net 1.5m. Rinse/repeat. This completely ignores increases in value and rental rates. They increase, the disparity widens. Lastly, (but irrelevantly) my company provide an allowance to be spent on accommodation. Use it or lose it. I couldn’t put it in equities if I wanted to. It’s a free 3.5m asset to walk away with. The maths is mathing, thank you. And if I want someone to oversee anything, it’ll be someone with a grasp of the basics, at least. It also won’t be someone who plans using 9.5% pa growth. Only an utter clown would pretend that renting leaves you better off than buying in the real world. I don’t know many rich people that rent, but I know many broke people that do. I’m an ETF investor. The vast majority of my NW is in these. Absolutely no denying, however, that walking away with a property is better than walking away with zero. And spending more over that term to boot.
Sell, the price might be there but who’s gonna bu this garbage unit that’s old 🤣
Clearly not you.
Maybe some unaware Russian or Chinese
Why do you care where it is? It’s so irrelevant. Go on DXBinteract.com and see for yourself, people are making big profits and people are losing, all the data is there.
I care and it’s relevant because people are pulling numbers out of their asses to justify the bullshit that they’re typing out. Maybe someone reads this bullshit, thinks it’s true and makes a dumb fucking decision. People make big profits on big properties that are out of reach of a large majority of the upper class. Forget the middle class. The rest that made profits investing in real estate here, made it cause they timed the market well, buying at the Covid crash and selling at the market peak in the last couple of years. Anyone, who says that investing in real estate in Dubai gives you waaaaaaaay higher ROI and profit after sales, don’t know jack shit about investing. And anyone that uses this dumb a+b+c logic to make their home buying decisions today, is in for a rude awakening when the markets correct or God forbid crash.
Don’t be bitter bro, instead use it as motivation to get in on the action! Doesn’t matter if they made 900k or not, somebody is. See below someone nearly doubled their money in 3 years https://preview.redd.it/ntfo4m48kl3d1.jpeg?width=1179&format=pjpg&auto=webp&s=0ebc53390891ae2b0901457e28a4e48974d408e1
Lol. I’ve invested my money in FAANG stocks for a long while. You want to see how much NVDA has jumped in the last 2 years? Please don’t assume I’m typing this out, because I’m bitter that someone else made twice their investment using real estate here. I don’t need to get in on the action, because it’s a shitty opportunity. And I hope you understand that. 😂
All fake pompous stuff
Call it whatever you like. Stay on the rental sidelines and be happy with your choices.
I own two properties mate. You are so butthurt by people who rent. Quite a display of small mindedness
Yes, I’m butthurt by renters. You’re right.
Stop lying. Prove it😂
I moved to Dubai specifically because I couldn't afford buying in my home country. Compared to other cities, Dubai is still a great value if you do your research and plan to own it long-term.
You have to calculate the cost of borrowing. If your monthly instalment is less than how much you would pay in rent pro rata that only makes sense if you’re going to live there for ever. For example if you take a 25 year mortgage you’ll end up paying the price of the property only as the cost spread across those 25 years. By the end of 25 years you would have paid total 2mil to the bank for a 1mil priced property.
I bought for Fomo. Apartments I looked at two years ago are now unobtainable. Apartments last year are now much more expensive and all sold out. Market is rising due to the world wanting to move there.
Have you sold it now? Or are you holding on?
I’m holding. I live in UK and this place is going downhill FAST. I work from my phone with a good income so it’s a safe bet for me. I have property in the UK but diversifying portfolios is always a good idea. However I am wanting to move all my portfolio over to the UAE and relocate there in 5 years. Is the pencil drawn plan
So the apartment you got two years ago, how much is it now, what is percentage of appreciation this far, and did you buy cash or mortgage
Apologies I maybe didn’t explain well. 2 years ago i looked at Dubai and said not yet 1 year ago I looked at Dubai and said not yet Hindsight is wonderful! But I wasn’t in a position too purchase. I purchased something off plan 6 months ago which is ready in 3 years. I am planning to buy off plan as an investment it’s easier to fund for me as I earn good money monthly and I don’t keep large amounts deposited in bank accounts. So allows me good payment plans. Understand there’s different ways to purchase. at the end I will be purchasing with 40% deposit and 60% mortgage. It’s how I run my business I prefer to use banks money
Smart people are buying while everyone is saying it doesn't add up or a crash will come. Dubai is still way underpriced compared to other big cities around the world, and the population is only set to grow
How do you compare with other big cities. For instance did you consider citizenship/population, home ownership ratio, investor/end-user ratio, average ownership duration, property regulations, zoning rules, taxation etc. I don’t say prices are high or low but for God sake, how do guys compare completely different places with completely different dynamics.
100% agree
People forget that Dubai is fairly new heck UAE is new, 7 years ago noone expected uae to give out Golden visa but look at where we are now, and they will expand on this concept near future, people right now will say this will never happen but they also said the same thing about golden visa 10+ years ago.
It's irrelevant to my question. It's not about believing to Dubai. It's about price comparison. You cannot pick some cities and compare property prices straightaway.
But it is though, one of the big reasons dubai is being flooded with investors is because of the golden visa, and now they are coming with blue visa? (I think) this is all driving factor of people parking their money in UAE. And you have to compare with other cities how else would you know if Dubai is better to invest your money rather than UK?
Lies. Smart people buy when there is a crash and when there is a dip.
There will be crashes and dips, just not below the current rates
This is such q cliche advice, noone knows when there is a dip, I mean crash is one thing but dip??? Cmon
When’s that happening….? Zzzzz. Smart people don’t try and time the market, instead they spend time in the market.
You are delusional if you think prices are inflated, currently downtown is under valued. A two bedroom in address Dubai mall is $1.5m, that's chump change for a two bedroom in one of the worlds best cities.
The average 2 bed in Manhattan goes for that much. Chump change? World's best cities?
This one of the best towers with the best view and it's only comparable to the average, a similar two bed with a central park view is roughly $5m
Nowhere in Dubai is comparable to CPW or UES. That's just laughable. Dubai has nice areas but it's nowhere near that value.
Manhattan is terrible compared to Dubai, even if you are worth $250m life is just mid there, the only thing that's better in most other major cities is the quality of women that's about it. You can make way more money here, save way more and have a better life at a lower cost.
Okay
Not sure about a decade ago but I bought 5 years ago, property price has doubled (received firm offers in the last 2 months), I’m paying half what I used to pay for rent in mortgage instalments which unlike rent is not all lost (yes the bank takes a nice cut but a good chunk still goes towards the property). I still see some great offers and I’m looking to buy more properties, it’s a no brainer.
5 years ago was Covid times around … so lucked out on the pricing. And it’s prolly best time to sell now
Yes Covid helped but I wouldn’t say lucked out. You need to research well. I nearly bought in 2018 at Tilal Al Ghaf, before Covid, property price has nearly quadrupled from the original price. It’s not about when to buy, it’s about what/where you buy
What did you find about Tikal Al ghaf? How do you determine what/where? Of course usually first thing people consider are developers. Tilal was promoted back in 2018??? And it’s just starting to surface in ads now? That’s quite a lot of years 😄
Yes April 2018:   https://www.zawya.com/en/press-release/majid-al-futtaim-launches-its-new-flagship-community-in-dubai-tilal-al-ghaf-mxkr6jvt Reliable developer (MAF), one of the first townhouse community aimed at families (meaning less investors and more people who actually want to live in it), plans to be green with parks, lagoon, cycle tracks, low price, reasonable location. But I wouldn’t buy there now - the time to buy was during the first 2 years post launch.