FAQ - Investment options
It is possible to invest in the market with different attitudes:
Off-plan investments
- Some investors purchase a property at a certain financing percentage and sell it later (before a next instalment or before completion) with premium.
- Some investors keep the property until completion and rent it out. At the moment there is a shortage in available apartments and commercial property, so rental prices are rising. The price of the property returns in 5-8 years, depending on the project and location.
If an investor takes a mortgage from a local bank, the rental income usually covers the loan instalments. Banks accept the income of the rental directly. This option can be of advantage for an investor, as it is possible to get ownership with a relatively low initial instalment, the property pays itself in a couple of years, afterwards it creates a long term, safe, passive income for the owner. In the meantime the market price of the property is also increasing, so it is possible to re-sell with gain.
Local banks are providing mortgages with fair conditions and favourable rate for residents and UAE nationals. According to expectations, non-residents will also be able to apply for financing int he near future. There is a new financing institution on the market: the five biggest property developer and investor companies formed an institution specialized in mortgages. This company is basically financing the products of the founders. Therefore the loan actuary process is faster and more flexible. The loan financing is in accordance with the payment plan of the developer contract.
Ready properties
As a result of the world credit crunch, the prices have decreased everywhere, even in Dubai. The prices decreased on some high prestige areas, like the Palm Jumeirah or Dubai Marina. However, this price reduction is only temporary, as Dubai is one of the most popular and exclusive holiday targets. That is why it is beneficial to buy a property NOW, as high return can be achieved with the investment!