By Sarah Townsend
Non-resident mortgages would help, say Damac and Dubai Properties, as would attracting long-term expats to the market
An executive director of Dubai Properties has called on the industry to do more to attract real estate investment from Europe and the UK, as the managing director of Damac Properties reiterated calls for non-resident mortgages in the UAE.
Marwan Al Kindi, executive director of sales & sales operations at Dubai Properties, said levels of European and British investment in the developer’s schemes were low when compared with investment from Arab, Indian and Pakistani buyers.
He told Arabian Business at the Cityscape conference on Tuesday that the real estate industry, and the Dubai government, needed to do more to encourage long-term expats who have lived in the UAE for decades, to snap up real estate.
“The challenge as I see it is, how can we attract more Europeans and Brits to the Dubai market? What can we do to encourage them?
“There are hundreds of expat families who have lived in the country for 25, 30 years – some of the first expats on Dubai’s soil – why do they not want to commit to buying property?”
Buyers from the UK represented the fourth largest group of investors in Dubai real estate in the first half of this year, after Emiratis, Saudis and Indians, according to figures from the Dubai Land Department (DLD).
Brits accounted for AED4 billion of sales transactions over the period – but Al Kindi said this was not reflected in the trends he was seeing. The majority of investors in Dubai Properties’ current schemes are from the Arab world, or Indian and Pakistan, he said.
Meanwhile, Ziad El Chaar, managing director of Damac Properties, said the developer was in talks with banks over the introduction of non-resident mortgages in the UAE.
He told Arabian Business in an interview at Cityscape that few Europeans and Brits purchase real estate in cash, and that UAE banks currently fail to provide the facilities and products to meet this type of overseas investors’ financing needs.
Damac is seeking to encourage banks to talk to their regulator and consider what options could be brought to market.
“We have so many attractions [for foreign investors],” El Chaar said. “The only thing I think we’re still missing is offering a non-residential mortgage, in line with what you see in Sydney, in Melbourne, in the UK, Los Angeles, which is the pay 35 percent down and you get 65 percent over 15 years, no questions asked. This would complete the package.
“We are talking to banks because they have to talk to their regulator, I can talk to my regulator but they have to talk to theirs.
“We are showing them how important this is, for attracting more foreign investment in Dubai real estate – think the UK, Australians, Europeans, who you rarely see buying property in free cash.”
He added that a non resident mortgage would attract a broader mix of nationalities to the Dubai property market.
Europeans only account for a tiny proportion of investors in Damac schemes, El Chaar said. “The people buying our schemes are mainly from the GCC, India, Pakistan, UK, and, more recently, China.”For all the latest real estate news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
as a an expat from Scotland I would love to buy a property here having lived here for over 10 years; however the fact that the level of deposit required is so large compared to UK, and that properties are still vastly overpriced prevents me from purchasing.
the only way to make a purchase viable here is to have a very large chunk of cash available to cover the stupidly large deposit - otherwise if you have to borrow part of the deposit and the mortgage payment it is vastly overpriced and you are at the mercy of the banks and the ever present various fees for every part of the process!
Until the market adjusts to realistic values for the quality of property available, and the need to put down a deposit as large as the purchase price of a 3 bed apartment in a decent area of Edinburgh is removed then sadly it will be very difficult foe people to enter the market.
That's without even mentioning the fact that people are losing their jobs, having their salaries reduced and leaving !!!
Hi Bob, There are choices available on non resident mortgages in UAE. Please contact me on email@example.com
Perhaps if there was a proper legal system, with judgements enforced and companies like Nakheel unable to repeat their colourful business practices from previous years, there may be hope.
Also, construction standards need to improve.
Bob, you've lived in dubai for 10 years. Have you not saved a penny. When i bought my apartment 10 years ago, it was cheaper than most developed cities in the world . It's now trebled in value, but it's the benefit of taking risk. Rather than complain, try buying property in the UK .
If you seriously want investors from the UK and Europe consider giving them attractive long term investor visas and long term residency rights and they will come.
@frank i have and am buying property in the UK where, while a depressed market, provides security and potential long term growth. My reasons for not purchasing here are related to build quality and the overpriced values placed on available property.
Improve quality of product and provide realistic pricing and more people will enter the market. In addition, ensure that developers actually construct what they promise, and don't delay and delay and delay like a lot of previous developments in the region causing problems to potential purchasers who have laid out money in advance of property being complete.
Yes, that would help.
Many UK investors have burnt their fingers in Dubai because DLD have poor systems which have allowed rogue developers like Dheeraj and East Coast LLC to empty the escrow accounts and vanish. Dheeraj had nearly a dozen projects which are currently at Dubai Liquidation Court or at Tanmya Property Committee of DLD. There is a willing developer e.g. Goldline ready to take over from where DEC left with a little bit of help from DLD and/or Tanmya. It is simple logic why investors should suffer when DLD has allowed their escrow account system to be abused. Goodwill for Dubai must return for the property market to become attractive for UK residents. Damac had nearly a dozen offices in UK compared to almost none now.
Little help from DLD and/or Tanmya is a small price to pay for the confidence in UK for Dubai to return.
Europe provides far better opportunities to buy; full legal ownership (proper freehold), well established legal systems, lower costs, better quality and building standards.
Dubai is a casino, jumping up and down. If you want to gamble, it's fine - you might make a lot, or lose a lot (and get out before you end up in jail). But if you want to invest rather than gamble, then Europe offers a far stronger proposition.