The United Arab Emirates (UAE) – and Dubai in particular – is an attractive place for foreigners to settle as it provides a very high standard of living and a number of tax-free zones in which people can save on their individual earnings in a job market that attracts skilled professionals from all over the world.
The Freehold Decree in 2002 gave other nationalities the right to buy, sell and lease property in the UAE, and as a result, it allowed for people to settle and make longer-term career goals. This resulted in the birth of popular expat communities – known as Freehold projects – that include upmarket spots like Dubai Marina, Palm Jumeriah, Jemeirah Lake Towers and Emirates Living.
And expat immigration surged, serving sectors like construction, architecture, engineering and other real-estate-related industries. Dubai in particular quickly became a hotspot for tourism and entertainment, where people from all walks of life (and particularly from South-eastern Asian countries) flocked to find their fortune.
Recession and Aftermath:
The spotlight on Dubai turned a shade of pale when the recession hit in 2009 and property values reduced by large margins. It was reported that even the leasing market declined by up to half of what the peak rates were in 2008 and 2009.
While Dubai’s gregarious offshore islands remained pointedly empty, a wide range of other bargains rose from the recession as homeowners became incredibly eager to sell and investors surfaced who were open to finding a bargain. Particularly for those who understood real estate values in relation to the property market, there were still gains to be had in Dubai.
A place that was called the “construction site of the world” had been progressing at an impressive rate – one that seemed to defy basic models of supply and demand – quickly switched to a place that delivered a hard bite of realism; to buy in Dubai necessitated sufficient job security and salaries to shoulder mortgages (even in a market where property prices were falling).
Home Loans in the UAE:
Some commentators report that the falling property prices are not an indication of gloom and doom for the overall economy but that they may help to provide things like sustainability, affordability or even consideration for the environment in a place where lavish living has previously taken prime position. A shift in focus from profit from construction to long-term sustainability is another stepping stone for expats to consider their long-term career and financial goals.
Many see it as a period of transition in which banks loosen their hold on loans and investors gain confidence in the market, increasing sales values and encouraging expats to invest in real estate that is less driven by oversupply and competition.