Exceptionally high prospective demand for Dubai property is constrained only by high prices and lack of mortgage programs, but these issues will soon be solved through the introduction of favorable mortgage rates and affordable housing sector development, latest statistical report of the financial comparison website has revealed.
Today, according to opinion polls, 8 out of 10 Dubai residents express readiness to buy a home of their own, rather than rent an apartment or a villa. However, 36% said the main reason deterring then from purchase was too high property prices, whereas 12.4% of residents said the mandatory 25 per cent down payment set by UAE Central Bank was more important deterring factor.
On the other hand, the number of expats, choosing the UAE as their permanent place of residence is growing year by year. Thus, according to Stanton Chase, a US statistics company, the average period of stay for expatriate executives in the UAE has doubled over the past five years. Despite the relatively slow salary growth in the UAE and the improvement of economic conditions in the West, expatriates prefer Dubai: their average stay here has increased to four and a half years.
“The long term outlook for the real estate market in Dubai looks favourable for investors, particularly in the run up to the Dubai Expo,” the report said.
So, Dubai is becoming more attractive for permanent residence. And the demand for home ownership here increases proportionally. For example, the average price for villas in the popular Dubai’s district of The Meadows currently stands at USD 1.63 million, while renting such a villa during five years’ stay will cost an expatriate USD 380,000, not mentioning that the tenant is also deprived of the opportunity to resale such a sought-after asset at a higher price due to its capital value increase.
Thus, especially with the spread of affordable housing mortgages, the popularity of buying over renting will continue to grow, experts say. Many UAE banks already offer 1.6% mortgages.