Welcome to the New Year!
In the first Systematic Property blog of 2019, I’ll be answering a question from Talinn and Charlie and they ask – what’s the market sentiment right now in Dubai?
I can tell you that it’s not good.
Prices have been going down for some time now and everyone’s cautious, there’s lots of developers who haven’t sold property and literally for the first time that I’ve been in Dubai for 12 years we’re seeing stock plots on the market, that’s property that’s been developed that hasn’t been sold its sitting there as inventory, that’s what we call stock plots. So, developers are obviously giving some crazy deals to sell those properties but still people aren’t buying enough and so there’s an oversupply in the market.
Is there really an oversupply?
Well, I doubt it because if we look at how much Dubai is growing in terms of population, and we look at the actual number of units being delivered each year, it’s really only adding about 5 to 7% on the actual property stock that’s in Dubai, the total housing units, so I can’t really say that’s oversupply, that’s just a good amount of supply, hopefully it keeps up with the growth of the city, but the sentiment is bad right now, everyone’s kind of like a bit doom and gloom but
Does that mean you shouldn’t buy a property?
Definitely not – I think if you’re looking to buy a property for yourself for the foreseeable future, and I mean at least five years, then go ahead because number one, you can get some pretty good deals right now and number two even if the property does go down a little bit more over the next two years, long term, that decrease is going to disappear because prices will go up.
What goes down is likely to go up
Can I guarantee that prices will go up in the short to long term? No, I can’t, I don’t have a crystal ball but if we look at what’s happened pretty much all over the world, what goes down does go up and if you’re planning to hold your property then you should see that upswing as well.
Now is there a place in the world where that upswing hasn’t happened? Yes, there are a few so there’s always a risk but if you’re looking to buy something for yourself and you’re right now paying rent, you’re probably going to save money anyway and you’re going to build up equity on your home, so they’ll probably balance out almost as a worst-case scenario in let’s say a five-year term.
So, Tallinn and Charlie, I wish you luck, and I think you should go and buy a property in the market right now because you can get some pretty good deals.