Over the years it is no secret I have had some differences (putting in mildly) with estate agents. Okay, yes, I have given a lot of them a serious kicking (and largely deserved). In fact, I think I once even suggested every single estate agent in Dubai should be deported.
So firstly I take my hat off to Ryan Mahoney, the boss of the region’s biggest real estate agency Better Homes, for agreeing to speak at the Arabian Business Forum last week. If anyone has good reason never to want to deal with Arabian Business in any capacity, it should be him. And I wouldn’t blame him.
But being a man who is passionate about his business, and clear in his own mind what both the good and bad parts of the industry are, Mahoney was one of the star attractions of the forum.
And I am ready to swallow my pride and say that when it comes to property, Mahoney is worth listening to, as he is talking a lot of sense.
The current property debate centres on one simple question: are we back in a bubble that is soon about to burst? When you look at the fact sale prices have risen by eighteen percent in the last year in Dubai, the answer could well be yes. Look at the desperate queues outside new launches, with even the cops being called to calm down desperate buyers, and the answer could well be yes. Look at the facts that banks are up to their old tricks again, cold calling anyone with a phone number to offer them a loan, and the answer could well be yes.
Mahoney, however, suggests that investors should not focus on the rocketing sale prices but pay much more attention to rental yields. While both continue rising (and last year rental yields went up twelve percent), then the market can still sustain this level of activity.
In fact, according to Mahoney, some of the previous “no go” areas when it came to investment are suddenly looking attractive again. In International City, smaller rental levels grew by 70 percent last year. In JLT, Better Homes has twice as many people looking to rent as it has available units. Even in Discovery Gardens, rental yields are around 8.5 percent. As long as rental yields keep rising, the bubble is unlikely (for now at least) to burst. Yields are already far better in Dubai than London or Singapore, meaning the emirate is still a good choice for investors.
As Mahoney said, “When you reach a point where the yields are stagnating and prices still rocketing, then you need to start worrying. We haven’t reached there yet.”
Though, as he told me later, at some point the music will stop and not everyone will have a chair to sit down on.
Owen is a class act
Soccer legend Michael Owen was the guest of honour at our Brits List gala dinner last week, and stole the show not just with a cracking speech, but a specially arranged penalty shootout on stage, to help raise money for a UNICEF project in Malawi.
What the audience didn’t get to see was Michael backstage. On paper: a huge, huge celebrity with more than two million Twitter followers. In reality: a thoroughly decent, humble guy who didn’t even want the complimentary limo and driver we had organised for him.
Most footballers disappear without a trace once they retire. But Owen is a class act and I am sure has a very big future ahead of him.
Thank you to everyone who attended the dinner, which you can read all about in this week’s issue. Can I also make a quick apology to Tanaz Dizadji who we wrongly stated was the founder of START. She is, of course, a director of the company.
Anil Bhoyrul is the Editorial Director of Arabian Business.