Buy Real Estate in Dubai - Experiences? Yield?

[cer955]

It should be, but in my experience it's on par, at least in the touristy areas like Palm and Marina. Gross short-term is like 20% more, but it disappears in the pockets of management companies, cleaners and handymen. I know guys who buy apartments in bulk and have their own management company, so they earn more from short-terms.

Can confirm. Completely unexpected but true.
Hopefully it will change in the future.

 

[JustAnotherNomad]

What's the average mortgage interest rate in Dubai at the moment?

 

[cer955]

What's the average mortgage interest rate in Dubai at the moment?

No personal experience here, but around 6 months ago I saw a pre-approval at 6.25% interest rate.
I think it makes more sense to invest in Dubai if you don't need mortgage.

Also, my personal opinion, you need to account for a possible drop in property prices - still, the ROI is far better than most other places so it's not a bad investment, and even a 50% drop would just bring the ROI down to average European real estate.

 

[JustAnotherNomad]

No personal experience here, but around 6 months ago I saw a pre-approval at 6.25% interest rate.

Oof.

I think it makes more sense to invest in Dubai if you don't need mortgage.

But does it make sense to invest in real estate without a mortgage? It's still a lot of work. You could just drop the money into the market instead and you would probably have a better ROI. Could also buy REITs if you want exposure to real estate.

Also, my personal opinion, you need to account for a possible drop in property prices - still, the ROI is far better than most other places so it's not a bad investment, and even a 50% drop would just bring the ROI down to average European real estate.

But interest rates in Europe would be lower. Sure, you don't pay tax in Dubai, but still...

 

[cer955]

But does it make sense to invest in real estate without a mortgage? It's still a lot of work. You could just drop the money into the market instead and you would probably have a better ROI. Could also buy REITs if you want exposure to real estate.

Sure, it' correct. For me, advantages were...
- Diversification: as "the market", for me, it's a worldwide ETF so heavily US tech stocks, it doesn't hurt to have assets in a completely different environment with similar expected returns. Also, ETFs works very well in the western world, but not so much everywhere else, where access is limited or more expensive.
- I (personally, not advising) expect some volatility but eventually prices to be higher in 10-15 years in Dubai - this makes sense only if you buy in a good location, as the average "good looking" apartment will be replaced by a thousand of new ones. But location and proximity to Burj Khalifa or other world-known landmarks is going to stay.
- Predictability: even if value may go up and down, I know my real estate investments are bringing monthly cash in my bank accounts. Maybe the market will perform better on average in the long run, but "predictability" has value.
- You may get investor visa or golden visa, UAE banking and more.

 

[PinkCat]

Sure, it' correct. For me, advantages were...
- Diversification: as "the market", for me, it's a worldwide ETF so heavily US tech stocks, it doesn't hurt to have assets in a completely different environment with similar expected returns. Also, ETFs works very well in the western world, but not so much everywhere else, where access is limited or more expensive.
- I (personally, not advising) expect some volatility but eventually prices to be higher in 10-15 years in Dubai - this makes sense only if you buy in a good location, as the average "good looking" apartment will be replaced by a thousand of new ones. But location and proximity to Burj Khalifa or other world-known landmarks is going to stay.
- Predictability: even if value may go up and down, I know my real estate investments are bringing monthly cash in my bank accounts. Maybe the market will perform better on average in the long run, but "predictability" has value.
- You may get investor visa or golden visa, UAE banking and more.

100% agree with every word!