Tuesday, Feb 10, 2009
Gulf News
Dubai: The time is right to buy property in Dubai as the fall in house prices, especially in desirable locations such as Palm Jumeirah, spells good news for potential buyers, industry experts say.
"The Dubai real estate market is full of opportunities and this is a great time to buy as a number of projects are now ready and investors can get good real estate for reasonable prices. Investors can also get great rental yields, of up to eight per cent, which you will not find elsewhere," Marwan Bin Galita, chief executive of Dubai's Real Estate Regulatory Authority (Rera), told Gulf News.
Property prices on Palm Jumeirah, developed by Nakheel, have fallen 50 per cent since September last year, according to sales agents PowerHouse Properties.
Four-bedroom garden homes on the Palm are now selling for as little as Dh6.5 million, down from peaks of Dh14 million in September 2008, agents said.
"We've seen a steady stream of bargain hunters in the market, shopping for these prestigious addresses, with many motivated primarily by price. Many end-users who previously could not afford to live on Palm Jumeirah are also now turning their attention to the bargains currently on offer," said Ian Hainey, Palm sales specialist at PowerHouse Properties.
Prices for Palm signature villas have also fallen, from about Dh30 million just six months ago, to around Dh15 million.
The fall in prices has resulted in an increase in potential buyers. There has been recent talk of 2009 being the year of the end user, especially for first-time buyers, who, until recently, had simply been priced out of the market.
"I think the Palm is starting to look very attractive. The price - from an aspiration level - I think people felt it was beyond them and now, with the correction and the price drop, it is starting to come into affordability," said Vincent Easton, sales director at Sherwoods Property Consultants.
For both end-users and investors who wish to rent out their property, now is a good time to buy.
"I don't think the bottom of the market is that far away. Now is a fantastic time [to buy] and not just for first-time buyers. People are starting to wonder when the right moment to come back into the market is," Easton added.
Easton said that in all the established areas, such as the Palm, Jumeirah Beach Residence and Discovery Gardens, there are average gross rental yields of 10 to 12 per cent.
Prices in these areas are also coming down, to as little as Dh800,000 in Discovery Gardens and around Dh1.5 million in Jumeirah Beach Residence.
"And people know they can take advantage of easy payment plans the developers are providing for ready properties. [This] is a winning long-term investment. Investors have a lot of choices, such as villas, flats, commercial, retail and island, so I truly believe in the future of this city," Bin Galita said.
Garden villas on the Palm rake in rentals of around Dh400,000 and furnished signature villas command rents of up to Dh1 million.
"As the crisis [moves] more into an equilibrium, you are finding more attractive investment yields and it makes it more interesting for people to invest in property and helps encourage more investment in the sector," said Blair Hagkull, managing director at Jones Lang LaSalle.
A Colliers International report showed property prices in Dubai dropped 8 per cent in the fourth quarter of 2008, the first quarterly decline since foreign ownership became legal in 2002.
The report also showed that sales volume dropped by 45 per cent over the last quarter.
Some Nakheel projects have been affected by the current downturn, including the one kilometre-high Harbour Hotel and Tower and the Trump International Hotel and Tower.
Getting a mortgage could be an issue for many salaried buyers, but not for all. A number of banks are still offering mortgages for buyers whose income is high.
Gulf News 2009. All rights reserved.
