Poshy

* big sigh *

We are seriously considering buying a property here in Dubai but have no idea where to start ?.okay, may have made a bit of a start by liking Silicon Oasis and prices don't seen too over the top.

Husbands job is not a fixed term contract and we could be here until his retirement age and he has no ambition to go elsewhere, that gives us 16 years ahead of us, so maybe a 15 year mortgage ?

Wouldn't it make more sense having his companys rent allowance pay bulk of Mortgage ? and then even if we sell at the same buying price at least we have our money back ?

Will a property de-value that much over the next 16 years ?, crystal ball required here at this point.

Are there LOADS of set up fees ?, are legal fees high ?, is it highly likely we will be ripped off being so novice in this area. ?

Do we need our heads testing ?

busybee2

i have been here nearly 16 years, come out for 18 months, but it wasnt plain sailing a couple of years ago, because of the construction problems... but i wont buy the quality isnt the same, the rules change, and they are still changing many times over the years.

OriginalSunshine

Have you seen any 15 year old properties here? 30 year old properties? stuff don't last long out here....

big assumption.

personally speaking, and I'm sure others will have wildly differing views, I would never buy property in the GCC, South America, Africa, or India/Pakistan - the political system is far too unstable for my liking. "Oops we decided to change the rules, and you can't sell to expats only locals who oh dear me what a shame can't afford that price better drop the asking price" or worse.....

Poshy

Not really an assumption Sunshine just throwing some idea's around, trying to be positive maybe haha !! x

soukie

I have been in the ME on and off since the early 90's and would never consider buying anything - everything is so uncertain here and I would never borrow any money here either. It's just not worth the hassle. Best to be able to take a suitcase and leave.

Poshy

yeah, its an awful lot of money to gamble with I suppose....

csdf

Me too - the thought of owning a house in a country that I might not actually be able to stay in if I lose my visa does not bode well.

Blue Cat

If you can afford to lose your investment, obviously worse case scenario then go for it. You just don't know what is round the corner and there is no stability here, what happens if the breadwinner is no longer around?

LaLaLayla

I always thought I would never buy here, however I know quite a few very money-savvy and risk averse people who have bought here. That makes me think that it can't be that risky.

The way I look at it, if you rent for 20 years you get nothing at the end of it. If you pay off a mortgage for 20 years, you will get something at the end of it.

csdf

The way I look at it, if your primary concern is somewhere to live (you seek utility, rather than returns) then renting offers all the advantages of ownership, without the costs of maintenance, depreciation and risks of capital loss.

If you're driven by the need to see a return on capital, then a property investment may be a good idea, depending on your risk preferences. However, if you're after investment options, why not invest in property in a safer country, or diversify even more and invest in property stocks (after all, if you think property is a good investment, then you must also believe that companies that own, manage or develop property will also do well)?

scrubbedexpat141

I get your logic here Poshy.

I'm paying a lot less than most on here...and I actually pay it myself (no allowance / provision). 65,000 AED is, give or take, 11,000 GBP.

In 6 months or so I'll be up to renew, bringing the total cost to:

62,500
65,000
+ Year 3 renewal, let's say 70,000
----------
197,500

= 34,504 GBP (xe today) spent by renewal time Nov 2014.

To me, it's a huge waste of cash money.

If I bought somewhere here when I first arrived (my apartment in fact) it would have cost just under a million dizzee rascals (as per the ownership doc I have).

At the same rate, assuming I got a deposit free mortgage, because I didn't have the money for one and banks were feeling generous...I'd have paid 20% off in 3 years at the same rate....taking interest to one side.

If I then had to move out, I know for a fact the apartment is worth more now, I'd basically have guaranteed myself a nice home for 3 years++, relatively safe return, because the prices have only gone up, not wasted money on rent, instead just put it into something I own.

It's, in my eyes, a smarter way to use your money if you can't afford to pay rent on a place here and a mortgage on a place somewhere else...in fact, even if you do that, you're not solving your issue of pissing money in a rent pot.

Yes, it's risky to buy a house, it is risky anywhere.

That's just my two fihls anyway, I reckon that if I had deposit money, I'd buy in the UK first (after carefully studying tax laws....again) before here because I'm a wuss and too non-committal to say that I'll be staying in DXB for a long time (even though I think I will).

(I use a lot of brackets don't I)

Millhouse

When I did the maths, the interest charge on the loans was roughly the same as the rent. Yields here are very low - especially when you take service charges into account.

So despite the high rents - the actual outgoing during ownership (principal, interest and service charges) doesn't actually make it really worth it. While I accept after 20 years you own something vs. nothing - you could well own a liability that has cost you more to own than nothing.

Then add on the risk that in year 8 they decide to build a motorway in your back garden.

flares

Exactly. Service charge they make it up as they go along.

Plus build quality will be an issue as these buildings start to age. I foresee a huge market for those who can undertake a 'Building Surveyor' role although that's a trade you do not hear of out here.

mentalist

For what it's worth, there are plenty of structures still standing in Dubai after 30 years, my villa being one of them!

Millhouse

I also wonder what will happen to the Springs/ Ranches etc. when the subsides in the water get phased out. Dead plants are not a great look.