Buying Property in Dubai?
I know that there have been a few people that have made good returns on property in Dubai in the last couple of years, but is it still a good time to buy?
Of course EK would be paying a fair portion of the mortgage by using the living out allowance, but as infalation spirals out of control there are worrying signals. In a recent thread relating to a Gulf News statement about life in Dubai, it stated that the cost of living spirals upwards and wages cannot. The reason for this is that easy extra money fuels infaltion as things are made more expensive due to the greed of the seller and the extra cash in the buyers hand. So maybe thats why EK don't give record profit share for record profits, so as to help slow inflation down, maybe? So where is that statement going you ask? Well if there is a determined effort not to offer home basings, despite the now large workforce, then it is because the greed masters want EK pilots to spend money in Dubai. A house has now almost doubled in price in the last 2 years and even for EK pilots, in todays Dhms, 3MDhms + for an OK villa is getting out of control BIG TIME. No only that, you will probably have to bring your own cash over from abroad (20%deposit) to help fund building their city (your villa).
Of course there are arguments both ways if it is a good idea to buy now or in the future. Of course living in company accommodation is a sure answer to taking none of the living out allowance home, whenever you depart Dubai. But when you calculate the cost of the allowance on a 3Mil home with say a 20% deposit, you will have to pay about 10K ontop of the company contribution and pay all the utilities as well. On the other side, you could always save the 15k or so a month and over the long term, if invested out of the country properly, would probably make you the same return should you consider a 15 or 20 year projection (if you could stay that long in the ME). There are lot of other worries to consider with the purchase or re-sale.
For eg
Some lenders won't give a mortgage on some property as they know that the build quality is not acceptable for the said investment.
The property laws here are trying to make sense of giving the purchaser a feeling of control that they own the property, even though a new highway might be built through your backyard.
Buying a property doesn't give you any more rights to Dubai than a tourist, what if you were unavoidably thrust into a dispute with a local (car accident etc) and it ended in violence and you taking a flight out the next day, what price would you get for your property?
Is there a stable tax system on buying, selling, utilities, waste collection etc, do you forsee a possible unavoidable increase in the costs.
Is the ME a safe place to invest in. The panic selling on the sockmarkets has seen the lack of stability in investing in the ME. If the property market were to take a bit of a correction, would that see all those who bought several properties panic sell also, creating another unpredictable investment market.
The list surely goes on. the reason for the post was just to consider if it is now worth buying property in Dubai anymore as prices are almost out of reach, even for high paid expats.
CW