I heard that as the rents will come down in AD so will the property prices. I am interested to buy a property keeping 5 years in mind. Is this the right time?? Which bank provides the best service and the lowest interest rate
You are correct, rents are expected to come down and are already declining in some areas, however my take on this is that the rents will only come down a little and nothing similar to what happened in Dubai where there were sharp declines in rents.
If you are expecting to double your investment in 5 years, then I can definitely tell you that is not going to happen. 5 years is not a very short time but it cannot be categorized as long term investment. You will see an equity gain for sure, but by how much? Its difficult to predict in the present scenario, however chances of going wrong with your investment are negligible. Furthermore you can earn substantial ROI by renting out the property.
I would recommend targeting completed properties as you want to play it safe, you need your investment to pay back in one form or other i.e either you live in the property yourself or rent it out.
Regarding bank mortgage rates, there are many banks providing different packages and rates, you might find the following website useful.
Also, not all properties are serviced by all financial institutions, therefore it will be important to have a word with your agent regarding mortgage options.
Hope this helps and all the best with your investment.
Faisal, you are at the right track. Rents are decreasing as a result of recession crunch and same is the case with property prices.
But if you are looking for investment considering 5 years, then i won't suggest you to do this because investment in real estate sector is completely like a gambling trick. No one can surely say where will the real estate market be in next 5 years, up or down.!
And if you are serious in investment in Abu Dhabi, then talk with the people of Standard Chartered or EFG-Hermes. I think they can clearly tell you the terms and conditions of investment through their services.
I believe the best strategy in property business anywhere in the world is to hold the property. A person who is financial sound can easily do this. If you are interested in the buying property in AD then go for it but don't forget to use the services of a property valuation firm. It would give you a better understanding about the worth of the property.
The real estate market has faced a tough time during the last two years but that has created a lot of awareness in the Dubai and UAE. Both have now come up with a lot of different departments which will track the performance of the real estate sector in a much better way. They are using a proactive approach to face any such severe difficulties in future so I am quite confident that the real estate sector of Abu Dhabi will perform well and the value of the property you buy now will be much higher after next 5 years.
Answering you question about the bank that is providing best services and lowest interest rates. I think you should better speak to your agent because there are different banks which offer different mortgage packages. It won’t be correct if I suggest you a bank here.
Well....Saud, I am not completely agreeing to your analysis just because of the after effects of recession. Construction of several projects have been halted just because of financial issues in UAE, therefore, I will not recommend to invest in AD real estate with 5 years margin. If Mr. Faisal is a strong businessman who can hold a property quite long then it is really a good investment but anything can happen tomorrow.
Even experts are not sure about the future of UAE real estate.
I would also like to add that it is very important for a residence anywhere to have access to basic amenities. No one wants to rent out an apartment where one has to travel long distances and hasn't got any amenities of life like buying necessities and other such things. I hope that helps in making the right decision.
Hi faisal,
The news you have heard is true and the property rate of Abu Dhabi has already fallen at some places, but fall in property prices is not so great.
I think if you buy property right now then after 5 years, your property rate will be double. Because lots of property projects are pending to be approved. Once they will be approved, prices of property will go higher.
Properties in Abu Dhabi did decline in this era. How much time it would take Abu Dhabi to gain back high property prices so that the sellers who wants to sell their properties in profit can offer the properties.
There is no doubt that prices will be revised. Investing for 5 years may have been the good investment in good economic times, but not now. Until the economic recovery is clearly seen coming soon, no one can guarantee a safer return. However, that may prove to be an excellent investment, if you wish to hold the property for 10 to 15 years from now. I hope that helps answer your question.
Irrespective of the facts and figures about the current trends in AD real estate market , it is obvious that Abu Dhabi has truly learned a big lesson from big mistakes in economical policies of Dubai. Sudden hikes in economy but no stability; will never be an intelligent step now. Keeping that fact in mind authorities are making such solid strategies to regain the trust of investors , job seekers and foreign immigrants to reside in Abu Dhabi for better living and better earning. You should buy , it would be safe and much more profitable in future.
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