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Tue 26 Dec 2017 03:07 PM

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UAE property prices continue to drop, says Propertyfinder CEO

Propertyfinder CEO Michael Lahyani says renters are increasingly moving into the buyer category

UAE property prices continue to drop, says Propertyfinder CEO

Based on our 2017 Propertyfinder Trends report from the second and third quarters of 2017 real estate prices in the UAE have continued to drop since the market peaked in mid-2014.

But is a healthy real estate market defined purely by rising prices? Taking a long-term view, incremental price movements are a sign of maturity. Falling prices, as we’ve witnessed, makes buying more feasible for a larger percentage of the population. We’re seeing more renters moving into the buyer category, preferring to pay off their own mortgage rather than someone else’s.

The UAE’s closest trade partner, India, could be the fastest-growing major economy in 2018, benefitting Indian expats, the largest ethnic minority in the Emirates (27 percent). Pessimists will refer to inherent economic risk and the need for greater reform in the country, but growing collaboration between both economies is excellent news for the UAE.

The introduction of tax may seem intimidating to both consumers and businesses. But VAT is ultimately a tax that is borne by the end-consumer of goods and services and it is important to keep in mind: the overall impact for consumers is less than the annual inflation rate.

Companies that are registered for VAT will have the ability to offset any VAT that they pay out, against all of the VAT that they collect from the consumers of their services. In most cases, this means that a company that is registered for VAT will effectively have collected more VAT come year end, than they have paid out to third party vendors, thereby VAT will not have an impact on their bottom line.

Lastly, Dubai has said it will increase transparency by sharing more of its data, including real estate transactions data, and from regulatory bodies like RERA and DEWA. This better understanding of the local market will attract foreign direct investment, a sure way of diversifying the economy.