Foreigners are snapping up homes in Dubai, why aren't the expats?

dubai - Overseas funds in Dubai property are worth over Dh28 billion so far this year

If there is one thing you can't accuse 2016 of, it is being boring. I cannot remember a first of half of a year being so packed with international shocks - both politically (thanks Donald) and economically (can Brexit be over already?)

In fact, I am sure many people have felt like me that simply turning on your smartphone in the morning is becoming an unsettling event - who knows what today's headlines will say?

And yet amongst all the uncertainty, in the UAE, there have been some real reasons for cheer. According to statistics released by the Department of Tourism and Commerce Marketing (Dubai Tourism), the emirate attracted a whopping 4.1 million overnight visitors in the first three months of 2016 alone - a 5.1 per cent increase over the same period last year.

This upswing is being reflected in real estate sales too, notably in transactions by overseas buyers. It may surprise you to learn that the total value of foreign investment into Dubai property this year has already reached more than Dh28 billion, almost half the value of all transactions. It would seem that for foreigners, Dubai looks a very appealing prospect once more and foreign traffic to propertyfinder.ae is certainly significant.

It does beg the question though, why aren't more expats who actually live here taking the chance to purchase a home? Well, there could be a few reasons.

I mentioned in this column not long ago that the mortgage cap could be one of the barriers for potential buyers. Originally introduced to tackle the problem of speculation, these days - with prices continuing to ease as seen on propertyfinder.ae - the cap is simply making it more expensive for the average person trying to get into the market.

Another problem could be a 'one foot in, one foot out' attitude to living in Dubai. I wonder how many of us have uttered the famous words: "well I'm only living here for a year or two" - and are now in their 10th year.?

Living in this part of the world, with the kind of lifestyle and opportunities it affords, gets under your skin, and most residents will stay years longer than they originally intended, if not permanently. So, from a purely financial point of view, that is a lot of cash down the drain on rent when there is such vast selection of homes for sale.

Outsiders looking in certainly see plenty of reasons to purchase a property here, as the above stats clearly reveal. The main attractions are ease of investment, a tax-free regime, security - both economic and physical - and last but not least, the huge opportunities surrounding the upcoming Expo 2020.

As anyone working in the industry can attest, a significant amount of property snapped up by foreigners is still being bought off-plan. Often, cash buyers are taking advantage of increasingly generous payment plans that now typically require 30 per cent to 50 per cent during construction.

And yet many people actually living here are still not persuaded it is in their best interest to take the plunge too. Interesting to ponder how many will then pay rent to these foreign investors?

I believe this reluctance to buy will fade away as soon as massive new developments such as Mohammed bin Rashid City open up, the UAE job market reinvigorates itself and excitement for the Expo really starts to build. The pros will simply outweigh any perceived cons.

We all know getting into the real estate game can be daunting - but as Mark Zuckerberg said: "In a world that is changing really quickly, the only strategy that is guaranteed to fail is not taking risks."

The writer is the CCO at propertyfinder Group. Views expressed are his own and do not reflect the newspaper's policy.
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