Buying a home in the UAE in a crisis

Dubai has been in the spotlight of investors for more than a decade thanks to its successful investment policy. Although the emirates real estate market has been hit hard during the pandemic, the first half of 2022 saw positive recovery trends. But how safe and profitable is it to invest there in a period of global instability? And is it safe to invest in Dubai property during the crisis? Like any investment, investing in real estate comes with risks, so investors need to be on the lookout. In this article, we plan to talk about buying a home in the UAE during the crisis, as well as give some useful recommendations.

Is it worth investing in Dubai real estate now?

Dubai's real estate market is seeing an oversupply of properties that are ready to move in or close to completion. With over 60,000 properties to be built by the end of 2022, the market has been unable to secure higher prices. As of 2021, the Dubai market was rated as an affordable market with an average score of 4, on a scale of 1 to 10. Since May, the average cost of residential properties has decreased by more than 10%, but the excess of affordable real estate will last for another couple of years. According to Reuters, prices will maintain the status quo for the next year or a year and a half. Although the cost of villas may recover faster, Dubai's housing prices will rise more slowly during the crisis.

Experts say local real estate will thrive and stay on track despite the risks of a global recession. The timely actions of the UAE government to ensure market stability have increased investor confidence. According to analysts and industry experts, Dubai has been able to strengthen its position as a global business, tourism and financial center, so investors will continue to invest in UAE housing during the crisis. Visa reforms, investor-friendly policies and ease of doing business will keep Dubai's real estate market resilient as it quickly navigates through a global recession driven by the global crisis, inflation and rising energy prices.

What to consider when buying a home in the UAE in a crisis?

When it comes to real estate investment, many see properties in Dubai as an attractive long-term investment. The city offers a high quality of life with a diverse range of housing from affordable to premium. Among the many other advantages are the rating of one of the safest cities, a developed economy and world-class infrastructure. It is not surprising that the purchase of real estate in Dubai during the crisis still remains in demand among foreign investors. To ensure that the acquisition of an object does not become a financial failure, we recommend that you adhere to the following tips:

• Location. If you're looking for rental property, you'll want high-demand areas with rental rates that will support the rate of return. Profitability is affected by close proximity to important infrastructure;
• The size of the property. One and two bedroom apartments have faster liquidity, which means they are easier to sell. Their profitability is higher than that of villas, penthouses and other luxury real estate;
• Financing options. If you need to finance investment property, you should pay attention to interest rates and loan options. Unlike residents, non-residents have different conditions: they have higher interest rates on mortgages (3.5-5%), and the loan term is shorter (less than 25 years). You can also use the payment plan, looking for the best installment option for yourself;
• Choice of agent. Unscrupulous intermediaries can be a waste of money and time, so it is important to choose a real estate agent with a state license.

There are many foreigners in Dubai, whose share is almost 85% of the total population. Foreign citizens can invest, own, rent and sell real estate in specially designated freehold zones, of which there are more than 60 units in Dubai.

How the global crisis will affect real estate in the UAE

It is no secret that the current crisis has created inflationary pressures on the global economy. The UAE raised its interest rates by about 1.5%, which affected mortgage rates in the market. However, the government prudently used the real estate stock to its advantage and announced the Golden Visa preferential program to attract foreign investment. Therefore, despite the increase in interest rates, there was a surge in transactions in the middle of summer. If the market availability remains at the current level, the number of transactions will continue to grow further.

Although risky, buying real estate is a good investment and a great way to keep your investment. To ensure that the risks when buying a home in the UAE during the crisis do not come true, enlist the support of UAE Assets agents. We will offer you a property in accordance with your requests, we will advise and provide legal support when signing the contract. To contact our agency, use the contact phone number or leave a request on the website - we will call you back during business hours.