Although there were speculations in recent years that Dubai’s expat bubble was about to burst, and that majority of expats are planning to pack their bags and leave due to high living costs, the continued slowdown in property sector in UAE, has led to expats deciding to stay back for now, says new research.
During the latest survey involving 1500 respondents in UAE, conducted during the first quarter this year, more than 74 percent said they are considering purchasing a property in UAE, unlike last year when 54 percent said they wouldn’t even consider acquiring a flat or villa, as they were not sure how long they were going to stay.
A financial comparison portal Compareit4me.com, says that more expatriates are planning to ‘lay down their roots’ and commit to life in UAE. According to analysts, this is due to slowdown in UAE realty sector. With dip in house prices, those having some extra money are more inclined to invest. Lower rents mean that tenants will be less tempted to move out of the country.
Recent dip in housing prices has obviously removed a huge weight off people’s minds and has made settling there a viable option, said Jon Richards, CEO at compareit4me.com.
According to Richards, there is a good increase in the number of people who plan to buy property.
Meanwhile, Dubai hasn’t been constantly figuring prominently in various cost of living surveys. The latest is the Cost of Living Index by the Economist. The emirate emerged only in the 68th position as most expensive city in the world, while Abu Dhabi came 56th, which is far behind in comparison to other developed cities.
The average cost of rentals for apartments and villas in Dubai, have been declining in the past one year and is likely to continue further. Cluttons predict that overall rents in Dubai will dip 3 percent to 5 percent this year, on an average. Other real estate experts like Phidar Advisory predict that lease rates may dip by 10 percent.
The COO of propertyfinder group, Lukman Hajje suggests that there is growing investor interest at the moment, owing to declining property values. But, interest continues to be strong, particularly from long-term investors seeking excellent high single digit rental yields.
According to Richards, the slowdown in realty sector is changing long term plans of many people.