I live in Dubai and work for a real estate portal so I see property listings and rising prices every day. Hindsight is 20-20 they say, but I kick myself daily for not buying property the day I arrived (Sept 12 2012). Honestly, everyone in Dubai should thank me for that. Had I bought property, prices would not have budged. All kidding aside, I am very interested in buying property in UAE. However, like the vast majority of Dubai, I am an expat and buying property in a country that is not my home can seem overwhelming. In fact, I really do not know any expats in Dubai who own property. We all rent. I received an email for Next Move live in Dubai and there is a ‘teaser” regarding buying versus renting and I quote from nextmove.ae. (source http://www.nextmove.ae/en/live/nextmovelive/#Section-8)
”With rental prices increasing sharply and with mortgage rates remaining low, buying property now can be cheaper than renting.
For example, the average price of a one-bed apartment in Dubai Marina is AED1.4m ($381,000), according to the Arabian Business Better Homes Live Property Index. “Taking into account a 20 percent deposit, which is the level most UAE banks expect, the average mortgage rate of 3.99 percent plus fees and a 25-year loan, annual mortgage repayments for an average one-bed apartment in Dubai Marina equal AED 70,941, according to the HSBC online mortgage calculator. That is a saving of more than AED14,000 compared to the average annual rent of AED85,000”.
That was pretty compelling to me. So I went here to access the Dubai Property Index. And decided to make a few more calculations on behalf of readers. If you would like to try this at home, here is the link to the HSBC mortgage calculator.
The average rent of a 1 BR in Downtown Dubai is AED 100,000 with the average purchase price being 1,822,150. Choose this option and pay AED 92,236.08 (mortgage) versus AED 100,000 (rent).
Let’s try a slightly more affordable part of town – The Greens. Here the average price of a 1 Bedroom is AED 1,212,000 and the average yearly rent is AED 77,000. But buy it with 20% down and your yearly mortgage payback is AED 61,350.6.
Last one. According to the Dubai Property Index, the average price of a one bedroom in Jumeirah Lake Towers is AED 950,250. The rent is AED 75,500 I did the math on this and with 20% down payment you payback 48,101 yearly as mortgage as opposed to AED 75,500 in rent.
I would do more of these but I am out the door looking at property for sale in JLT at the moment.