Would you recommend buying a villa in Dubai? | ExpatWoman.com
 

Would you recommend buying a villa in Dubai?

109
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EW NEWBIE
Latest post on 07 July 2011 - 10:07

Hi,

We are seriousley considering buying the villa we rent in JVT - the project is starting to move at last and they are selling cheaply.
We plan on long term in Dubai anyway and can see a potential to also make a profit in year to come.

Anyone already bought a property? And what are the plus & minus of buying?

Any advice greatly appreciated.

Thanks

68
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EW NEWBIE
Latest post on 09 July 2011 - 22:00
We came to Dubai in 2007 with the intention to buy since we know we will be here for long term. We explored and decided it wasn't the right time because of the Booming Real Estate. Now in 2011 climate to buy is much better but we have decided to invest our money elsewhere. The laws here are too unpredictable and the quality of the houses/apartments raise a lot of questions and a lot of money. Which you will not be sure of to get it back when you sell it. With the rentals of our property abroad we live for free in Dubai and in the meantime the value of properties abroad are increasing. For us it is working well this way.
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EW EXPERT
Latest post on 09 July 2011 - 17:55
That's a thought - why do people call themselves "homeowners" when they have mortgages? Until the mortgage is fully paid off, the property belongs to the bank, not to you. All the more questionable because I remember reading that "freehold" here in Dubai is in fact a 99 year leasehold - so you never actually own the land the property is on (the land remains firmly in Dubai's ownership)... hence why you also often have to pay maintenance to the development just like in a block of flats) and why you don't have total freedom over changes you may want to make to the property (like demolish it and build something original).
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EW OLDHAND
Latest post on 09 July 2011 - 17:40
In 2005 I did the sums on buying versus renting in Dubai...........in order to break even on buying I needed an increase year on year of 1O% property value. What people forget are the following.......if you have to mortgage you have to pay interest......which is dead money. If you use your own money, you lose the interest income..........and most importantly, the legal costs/hidden charges means it would take years before the initial start up costs are covered. And that's not even taking into consideration maintenance and housing fees. And.......I did that calculation before the crash. In a falling market.......I'd let a landlord take the strain.
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EW GURU
Latest post on 09 July 2011 - 14:41
if I pay 200k on my own place I can sell it for what ever (market dictates, what I am happy with etc etc,) and say, i sell at a price enough to cover the mortgage with a bit over...then I walk with my suitcase of belongings and the dollars over. Quids in. You make money providing your not in negative equity as has been said Exactly - *if* you're not in negative equity, and Dubai is full of people who are up to their necks in it, because they succumbed to the gold rush mentality that gripped otherwise intelligent individuals during the boom. This wasn't supposed to happen, Dubai property could only continue to rise in value, remember? We know many renters here who are walking away with far more money in their pockets (through straightforward saving from their salaries) than people who bought their homes, simply because the homebuyers bought at the wrong time and paid far, far too much. As rents continue to tumble, it's quite possible to end up far more "quids in" as a tenant than as a homeowner. That's a thought - why do people call themselves "homeowners" when they have mortgages? Until the mortgage is fully paid off, the property belongs to the bank, not to you. <em>edited by edna.welthorpe on 09/07/2011</em>
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EW MASTER
Latest post on 09 July 2011 - 11:02
Aren't you quids in if you are able to sell it at all? You have an asset, worth something, even if it's less than you paid for it If you can't sell it for a profit, how are you any better off than someone who has rented? Say you're able to sell it for the same you paid for it - you've broken even, but you still walk away with nothing, just like a renter does. The only advantage you've had out of the deal is that you haven't been subject to the whims of a landlord. If you sell for the same price you paid then you won't break even as there are interest payments on the loan and all the other expenses which come with owning your own home rather than renting. :) Depends on whether or not your mortgage repayments and the maintenance are more than your rental would have been over the period of ownership. Personally, I would certainly not consider buying here now (and we believe strongly that property is a great investment), but as I said, if I'd had the opportunity to get in on AR at the beginning and then to have sold after a couple of years, I'd have been very pleased with my investment :)
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EW EXPLORER
Latest post on 09 July 2011 - 10:52
No actually. The cost of maintenance and quality of building mainly is what I would not go for :(
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EW GURU
Latest post on 09 July 2011 - 10:50
Aren't you quids in if you are able to sell it at all? You have an asset, worth something, even if it's less than you paid for it If you can't sell it for a profit, how are you any better off than someone who has rented? Say you're able to sell it for the same you paid for it - you've broken even, but you still walk away with nothing, just like a renter does. The only advantage you've had out of the deal is that you haven't been subject to the whims of a landlord. If you sell for the same price you paid then you won't break even as there are interest payments on the loan and all the other expenses which come with owning your own home rather than renting. :)
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EW NEWBIE
Latest post on 09 July 2011 - 08:08
I totally agree with a previous post and then saw that her name was A Rancher. We have bought at Arabian Ranches after living and renting in Dubai for 30 years, when it was only possible to rent. We have never regretted buying our lovely home and in fact wouldn't be here now if we hadn't bought. We are semi-retired and couldn't afford the rents, but our mortgage is far less than the rent would be. Having said all that, it is a completely different feeling owning your own villa here. We have lived in many different rental properties and you don't want to spend too much on your garden, as its not yours, you don't want to put up a nice shade in the garden as its not worth it as its not your property etc etc. We now have a fabulous pool we designed ourselves, with a swim up bar, and a dry side to sit an socialise in when you don't want to get wet. We have some fabulous shades to keep the whole garden cool. We spent the whole day outside yesterday, under the shade in the morning and in the pool in the afternoon. It was hot, but not humid so we were outside all day. Our tv is hung on the wall, but we chipped out the wall and fitted the cables inside the wall. We couldn't have done that if it was a rented property. It still looks fab after 6 years of living here. We live in a lovely street, have great neighbours and feel "at home" in our own place. Now that prices have come down and are realistic, I would definitely recommend buying in Dubai if you are here for the long run. Good Luck!
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EW EXPERT
Latest post on 09 July 2011 - 07:47
We were buying but walked away because the prices were increasing on a daily basis and it was getting silly we didn't feel it could continue - thank goodness we did because now the properties we see looking at have dropped in price dramatically. We bought a place in Spain and are looking forward to going there this summer. We had never rented before but as people have said at least you can walk away when you want to or when you have to. So many people who bought here have big mortgages on properties that are now worth so much less than they paid and they are locked in as they can't sell. I don't think you have to own a property to make it a home. We treated our villa exactly as we would had we owned it .
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EW MASTER
Latest post on 08 July 2011 - 23:43
I've recently read a book called "Hello Dubai", which demonstrated how people who bought in Arabian Ranches off- plan invested wisely if they sold on at the right time. I have a feeling they may have been the last ex-pats to have made a profit on property in Dubai.
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EW EXPERT
Latest post on 08 July 2011 - 22:10
Aren't you quids in if you are able to sell it at all? You have an asset, worth something, even if it's less than you paid for it If you can't sell it for a profit, how are you any better off than someone who has rented? Say you're able to sell it for the same you paid for it - you've broken even, but you still walk away with nothing, just like a renter does. The only advantage you've had out of the deal is that you haven't been subject to the whims of a landlord. I'm with simples on this....excuse my 'count on fingers maths' BUT if I buy a property here, I have something that I actually own. If I say spend, 200k per annum on a rent, the land lord stiil owns the place.When I leave, he has my money, owns the place still and I take with me what I put in my suitcase. if I pay 200k on my own place I can sell it for what ever (market dictates, what I am happy with etc etc,) and say, i sell at a price enough to cover the mortgage with a bit over...then I walk with my suitcase of belongings and the dollars over. Quids in. You make money providing your not in negative equity as has been said. That said, I wouldnt buy a place here for love nor money.
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EW GURU
Latest post on 08 July 2011 - 21:37
Aren't you quids in if you are able to sell it at all? You have an asset, worth something, even if it's less than you paid for it If you can't sell it for a profit, how are you any better off than someone who has rented? Say you're able to sell it for the same you paid for it - you've broken even, but you still walk away with nothing, just like a renter does. The only advantage you've had out of the deal is that you haven't been subject to the whims of a landlord.
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EW EXPERT
Latest post on 08 July 2011 - 21:00
I would save the money and buy somewhere else. A good friend of mine wanted to buy here afew years ago and was informed by a financial advisor that it would be a bad move. As said by others we dont have the rights to abode here, with having property or not. My DH works in construction and has seen some poor new builds, they dont even come with a guarantee do they. Any failure to pay then its of to Dubai Hilton, far to risky.
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EW EXPERT
Latest post on 08 July 2011 - 20:39
We bought our house and I'm glad we did. There's a different feeling in living in your own place to renting. You can put more time and effort into making it a home. Prices have stabilized and are gradually increasing in some areas - Ranches, the Palm, Downtown areas so if you buy wisely you'd be ok. There are some areas where prices will continue to fall and probably never be attractive areas to live.
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EW MASTER
Latest post on 08 July 2011 - 17:30
the property is worth slightly less than when we bought, but we haven't thrown rent down the drain, so we're easily 'quids in' How does that work then? You'll only be "quids in" if you can sell it at a profit. Otherwise, you're no better off than someone who's rented, in fact you're possibly worse off. Aren't you quids in if you are able to sell it at all? You have an asset, worth something, even if it's less than you paid for it, rather than "dead money" paid out in rent, so you have still managed to save some money by buying, rather than renting, surely? Unless you get yourself into "negative equity", of course, and are *obliged* to sell on a downturn, having invested more than you can afford. <em>edited by simpleasabc on 08/07/2011</em>
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EW GURU
Latest post on 08 July 2011 - 14:58
The personal financial guru Alvin Hall once pointed out that one of the biggest mistakes people make is assuming that rent is automatically "dead money" or "money down the drain". As events in recent years have demonstrated, buying property can sometimes be a really bad idea, especially if you have to stretch yourself to buy at a ridiculously inflated price - which so many people did both here and in places like the UK, because they believed all the nonsense about the property market being unable to fall. Dubai property is obviously an awful lot cheaper now than it was a few years ago, but as has been pointed out, there are so many other issues that potential buyers need to think very hard about. The build quality, which so many people glossed over as an irrelevance during the boom, is starting to become a serious concern; it's quite telling that so many villas that are only 6-7 years old are in such dire need of extensive (and expensive) renovation work already.
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EW GURU
Latest post on 08 July 2011 - 13:06
I would not buy property here either. It is rather surprising to see all the posts against buying here in Dubai as this same debate came up before on here and at that time there were more people saying they would/had bought here. There is a definite change of sentiment showing.
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EW GURU
Latest post on 08 July 2011 - 13:00
the property is worth slightly less than when we bought, but we haven't thrown rent down the drain, so we're easily 'quids in' How does that work then? You'll only be "quids in" if you can sell it at a profit. Otherwise, you're no better off than someone who's rented, in fact you're possibly worse off.
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EW EXPLORER
Latest post on 08 July 2011 - 09:29
After researching this myself for a while I have decided NO WAY. You don't have the right here, never will, are a second class citizen and quite frankly I would rather invest in stable countries that at least admit they tax you rather than screwing you though DEWA bills and other means.
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EW NEWBIE
Latest post on 08 July 2011 - 09:25
An article you may be interested in: http://gulfnews.com/business/property/uae/attractive-property-buys-in-dubai-1.824720 We bought and have no regrets - the property is worth slightly less than when we bought, but we haven't thrown rent down the drain, so we're easily 'quids in'. It's been great to be in our own home without landlord problems too.
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EW EXPERT
Latest post on 08 July 2011 - 02:00
Also, is it an asset? Indeed... it's only worth what someone's willing to pay for it. The stark reality of Dubai is that once the current construction projects are finished, that industry will be pretty much on hold until (or "if") demand and supply balance out. There's already a surplus of property and what, 18,000 new units appearing on the market by the end of the year? Construction-related professionals won't be hanging around, so demand will partially decline, whilst yet more projects are being completed. Dubai and sustainable growth have never been introduced to eachother! Of course estate agents are going to be optimistic - they want to sell and remember the boom time that was never going to end. You just need to look around - there are so many empty properties with absentee LLs and such a huge churn of transient people. Empty properties aren't healthy - they bring down an area.
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EW GURU
Latest post on 07 July 2011 - 12:56
Cash outright, yes (depending on your personal circumstances of course). With a mortgage, no way! Too risky. Don't forget to budget as well for the 'hidden' fees i.e. excessive services charges. <em>edited by Pomegranate on 07/07/2011</em>
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EW EXPERT
Latest post on 07 July 2011 - 12:55
Same dilemma here :s interesting thread. We use very little of our accomadtion allowance and this was so we could buy something in cash by end of this year. We're viewing to buy now because for us it makes financial sense for our circumstance. But at the same time, We get very confused and just this morning we decided not to buy, by dinner it will ''yes lets buy'' and by breakfast it'll be a ''lets not'' again. Get an opinion from a pro, and see what suits you. We are viewing 17 properties between now and Sunday. It'll make things much clear. Why don't you just set up a nice little nest egg off-shore and build up until you can buy something of value in your home country. If I had anything left over from my accomodation allowance, I would be putting it away!
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EW MASTER
Latest post on 07 July 2011 - 12:54
Also remember all the add ons eg service charges and then the hiccups with all the people who don't pay these in your development then they are threatening to cut off pool, whatever....
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EW GURU
Latest post on 07 July 2011 - 12:52
It only makes financial sense if you are absolutely positive that you wont get into financial worries. Speaking to friend the other day (who is also thinking about buying) she was saying that her view is, if DH lost his job then they would have 3 months salary and then he could get a new job. Erm, no, sorry, many companies when laying off staff are in fanatical woe, some don't get their payout for months if not years, and some don't pay up at all! Also, to find work within 3 months here is tough, may of our friends were/have been out of work for 4-6 months before they found something or shipped out in a panic. Also, is it an asset? Yes, if you plan staying 'forever' ( but we all know that isn't possible for expats'. So then what happens when you cant sell it?
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EW NEWBIE
Latest post on 07 July 2011 - 12:06
Same dilemma here :s interesting thread. We use very little of our accomadtion allowance and this was so we could buy something in cash by end of this year. We're viewing to buy now because for us it makes financial sense for our circumstance. But at the same time, We get very confused and just this morning we decided not to buy, by dinner it will ''yes lets buy'' and by breakfast it'll be a ''lets not'' again. Get an opinion from a pro, and see what suits you. We are viewing 17 properties between now and Sunday. It'll make things much clear.
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EW NEWBIE
Latest post on 07 July 2011 - 11:58
buying had crossed our minds when we got here, we don't use our full accom allowance and therefore get to keep the left over. We thought if we were here 10 years we could easily pay off most of a villa (and have an asset) BUT having heard the horror stories, seen the poor build quality over the past few years of living here, and the horror of everything being pulled from under your feet - no way. Apparently the 6 month visa for those owing properties is for properties over 1m dhs, but it's not a long term visa. It does look attractive to buy one of these new properties which are going for a good price, however you'd have to be pretty brave to think it would be worth something in 10-15 years unless it was something special. We looked at a 10 year old property and it was in a terrible state. Our old Ranches villa was only about 6 years old but it was starting to show significant signs of needing some major structural work, and that is what they call a premium property. Think very hard, is my advice, we would rather invest in our home country in something almost guaranteed to be worth what we paid for it, if not more. good luck with your decision
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EW GURU
Latest post on 07 July 2011 - 10:53
You never ever know what’s going to happen in Dubai. We brought a house in Emirates Hills, when we first moved there it had a beautiful entrance with fountains and flamingos by the security gates. Now the lovely fountains have gone and there’s a dirty great big unfinished motorway in its place. Luckily we sold our house and made a good profit, but some people were not so lucky. I would never buy there again. The laws are too opaque and because most people rent even the nice communities end up looking like shanty towns after a few years
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EW EXPERT
Latest post on 07 July 2011 - 10:42
I'm another who would never buy here with any kind of personal risk (as in if I could pay cash, I maybe... no, actually, I'd invest it elsewhere!). The build quality varies from unreliable to shocking, but basically, you just can't trust it. The second thing is that if you buy a villa in a development, even if you are told you're buying "Freehold", you are still subject to the whims of the [often government-owned'> developer, so if they come up with a cunning plan, you have no recourse (look at the chaps in the Springs who bought villas in a leafy suburb and now find themselves backing onto a dual carriage-way!). "Freehold"here is a 99 year lease... not that the property would last 99 years. These two points raises the question of what happens when the property and/or development gets into a state of disrepair. Who is going to pay? Are you going to be tied to keeping all aspects of your villa as per the original design? At what point would the development company deem that it's too costly to maintain the scheme and how would they action a remedy? The big developments in DUbai (both villa and apartment) are hugely costly already to maintain, so you're not just buying a property with a mortgage, but also signing up to pay a sizable service charge. Lastly, yes, the laws...
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EW EXPERT
Latest post on 07 July 2011 - 10:29
Hi, We are seriousley considering buying the villa we rent in JVT - the project is starting to move at last and they are selling cheaply. We plan on long term in Dubai anyway and can see a potential to also make a profit in year to come. Anyone already bought a property? And what are the plus & minus of buying? Any advice greatly appreciated. Thanks I am sorry but you should never look at Dubai with a long term perspective. The laws change here at the drop of a hat. It is not a safe place to make investments. There are a further 18'000 properties coming on the market and the prices are due to fall another 20% in some areas. There will soon be another huge dip in the international markets and a wave of redundancies, not only in Europe but here as well. You need to seriously consider this before taking the pludge. To conclude, of you are taking a mortgage to buy this house, then you must also note that consumers have no rights and that banks here are not regulated as they should be. The interest rates are around 10%, triple what they are in Europe.
 
 

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