A survey conducted by DSL Exhibitions as a prelude to the company’s latest edition of R&R Local Property Show – due to be held at the Sheikh Zayed Center for Conferences & Exhibitions (Ajman University of Science and Technology, Ajman) on Thursday 19th, Friday 20th & Saturday 21st June 2008 – has revealed significant differences in the perceptions and attitudes of property investors who choose between the 3 regions of the UAE: Abu Dhabi, Dubai and Northern Emirates (Sharjah, Ajman, Umm Al Quwain, Ras Al Khaimah and Fujairah).
“While it is unfair to compare the real estate markets of Abu Dhabi, Dubai and Northern Emirates as they are all at different stages of development, we thought it was important to compare the attitudes of those who have invested in these different regions of the UAE, so we as industry professionals could better understand investors’ motivations and their needs,” said Tessa Morris, Marketing Director, DSL Exhibitions. “As organizers of the R&R Local property Show, the only show focusing soley on the Northern Emirates we regularly conduct these consumer audits as a value add for our exhibitors and partners.”
Survey design:
Objective:
To discover if any significant differences exist in the perceptions, attitudes and motivations of real estate buyers choosing between Dubai, Abu Dhabi or one of the Northern Emirates (Sharjah, Ajman, Umm Al Quwain, Ras Al Khaimah and Fujairah) and to underline any apparent trends.
Sample size:
• Invested in Abu Dhabi: 42
• Invested in Dubai: 167
• Invested in Northern Emirates: 121
Sample profile:
• The survey targeted adults who have been residents of UAE for at least the past 3 years or more, with or without a break in their stay.
• The survey focused only on those individuals who have bought property in the UAE, in their own name, or in the name of a company they wholly or partly own.
Survey results:
Legend:
AD: Respondents who own properties in Abu Dhabi
DXB: Respondents who own properties in Dubai
NE: Respondents who own properties in Northern Emirates (Sharjah, Ajman, Umm Al Quwain, Ras Al Khaimah and Fujairah).
1. You made the real estate purchase, primarily as a:
AD: Financial investment (appreciation and/or rental): 67% To live in (own use): 33%
DXB: Financial investment (appreciation and/or rental): 32%% To live in (own use): 68%
NE: Financial investment (appreciation and/or rental): 21% To live in (own use): 79%
A significant difference was revealed between the motivations of those who have invested in property in the Abu Dhabi, Dubai and the Northern Emirates of the UAE. While 67% of those who have invested in Abu Dhabi have done so based on expectation of financial returns, 68% of Dubai investors and 79% of Northern Emirates investors have invested with a view to live in those properties.
“It seems that Abu Dhabi is now attracting a significant amount of investor funds directed at financial speculation, while Northern Emirates has the highest proportion of investors who wish to live in their properties,” said Tessa. “However, this must not be taken to mean that investors in Northern Emirates do not factor price appreciation in their decision to buy.”
2. In your opinion, which region offers the highest possibility of price appreciation in the near term?
AD: Dubai: 27% Abu Dhabi: 51% Northern Emirates 22%
DXB: Dubai: 35% Abu Dhabi: 48% Northern Emirates 17%
NE: Dubai: 21% Abu Dhabi: 39% Northern Emirates 40%
Abu Dhabi emerged as the region where investors from across the country expect the highest price appreciation happening in the near term, with almost half the respondents choosing it over both Dubai and Northern Emirates.
However, if we are to believe industry players operating in Northern Emirates, this region is only now coming into its own. Khurram Burney of Estate 400 Real Estate – an exhibitor at the upcoming R&R Local Property Show – said that “returns on investments in the Northern Emirates are as high as 30%-40% in about 6 months.”
Jawad Chapal, Exectuve Director of Chapal World – another exhibitor at the Show – also felt that price appreciation price appreciation in the Northern Emirates is accelerating. "The continued positive and enthusiastic response form property buyers and investors to our projects in Ajman clearly predicts healthy market growth,” he said. The eagerly anticipated launch of Ajman's own bank and the announcement of Ajman airport are definite growth indicators as well.”
Mehmood Yoosuf of Minaret Properties echoed this opinion. “Return on investment is fast catching up with other emirates as Ajman is at the moment witnessing a real estate price boom.”
3. In your opinion, which region offers the best value for money?
AD: Dubai: 15% Abu Dhabi: 37% Northern Emirates: 48%
DXB: Dubai: 12% Abu Dhabi: 32% Northern Emirates: 56%
NE: Dubai: 6% Abu Dhabi: 26% Northern Emirates: 68%
Northern Emirates, by far, garnered the most votes as the investment destination offering the best value for money, cutting across geographical lines. Seconding the finding, Aftab Hemani, Managing Director of Cobalt Real Estate – also exhibiting at the R&R Local Property Show – said: “Land prices are under AED 100 per sq. ft. on the Emirates Road in Ajman, though they are rising fast. However, prices in Northern Emirates are far lower than in Abu Dhabi and Dubai. You can today get the same quality in Ajman for AED 450 per square ft as you would expect for AED 1000 per square ft in Dubai or Abu Dhabi. Confirming the sentiment, Jawad Chapal said: “A large number of investors who were, till recently, unable to buy in Dubai can now comfortably afford to invest in Northern Emirates.”
Salman Soofi of Brooks Real Estate also felt that Northern Emirates has made property ownership in the UAE more affordable. “The freehold market of Dubai was only targeting a higher net worth group - more of investors than the actual end users,” he said. “Northern Emirates and especially Ajman is targeting end users living in Sharjah and Ajman. The price of the property is affordable for the medium income group as well and this has contributed significantly to the UAE becoming a more stable real estate market.”
4. If you were to invest in a second property, which region would you choose?
AD: Dubai: 21% Abu Dhabi: 62% Northern Emirates: 17%
DXB: Dubai: 37% Abu Dhabi: 54% Northern Emirates: 9%
NE: Dubai: 26% Abu Dhabi: 25% Northern Emirates: 49%
The question revealed a split of opinion between those investing in Abu Dhabi and Dubai on one hand and in Northern Emirates on the other: Almost half of the respondents who have bought property in Northern Emirates would choose to buy again in the same region. Surprisingly, Dubai garnered the least votes as a choice for a second real estate destination.
5. In your opinion, which region will remain an attractive investment destination for the longest time to come?
AD: Dubai: 41% Abu Dhabi: 44% Northern Emirates: 15%
DXB: Dubai: 65% Abu Dhabi: 31% Northern Emirates: 4%
NE: Dubai: 38% Abu Dhabi: 35% Northern Emirates: 27%
Investors were unanimous in their opinion that Dubai offers the best conditions as a longer term property investment destination, while Northern Emirates emerged as the least likely: A clear signal to policy makers and administrators in the Northern Emirates that more needs to be done to improve the business and infrastructure set-ups in the region.
6. Which region, in your opinion, offers the best living standards at present?
AD: Dubai: 34% Abu Dhabi: 64% Northern Emirates: 2%
DXB: Dubai: 78% Abu Dhabi: 21% Northern Emirates: 1%
NE: Dubai: 58% Abu Dhabi: 34% Northern Emirates: 7%
There is a marked split in opinions between investors from different regions, each choosing the region they have invested in as their overwhelming choice when it comes to living standards. This is a clear indication that people prefer to buy properties where they perceive the living conditions to be the best – a startling revelation, especially coming from the Northern Emirates investors, since at present, the region cannot compare with either Dubai or Abu Dhabi in terms of amenities, business facilities and infrastructure.
7. Which region, in your opinion, will offer the best living standards in the future?
AD: Dubai: 55% Abu Dhabi: 38% Northern Emirates: 7%
DXB: Dubai: 61% Abu Dhabi: 34% Northern Emirates: 5%
NE: Dubai: 39% Abu Dhabi: 32% Northern Emirates: 29%
According to our respondents’ unanimous opinion, Dubai will offer the best living standards in the country over the longer period.
8. Which region, in your opinion, offers the most robust legal framework to protect buyer rights?
AD: Dubai: 62% Abu Dhabi: 32% Northern Emirates: 6%
DXB: Dubai: 77% Abu Dhabi: 21% Northern Emirates: 3%
NE: Dubai: 34% Abu Dhabi: 35% Northern Emirates: 31%
Dubai was clearly chosen as the investment destination offering the best legal framework to protect buyer rights – a clear indication that the Emirate’s longer stint in the market and pro-active engagement has clearly worked in its favor.
However, the industry expects Northern Emirates – especially Ajman – to catch up on the regulatory issues soon. Aftab Hemani of Cobalt Real Estate said: “Ajman is swiftly moving towards the establishment of escrow trust account for all off-plan sales which will be a cornerstone of the region’s success.” Salman Soofi of Ambience Real Estate also felt that “the involvement of RERA and Escrow account law has created stability in the overall free hold property market of the U.A.E. Buyers now can invest with more confidence and peace of mind.”
40 companies will exhibit at the R&R Local property Show offering a mix of residential and commercial property from all over the UAE and in particular Ajman and Northern Emirates. The show is free and open from 11.00am – 9.00pm Thursday June 19, Friday June 20 and Saturday June 21, 2008 at the Sheikh Zayed Centre for Conferences & Exhibitions – Ajman University of Science & Technology
DSL Exhibitions is an international exhibition and conference company that specialises in organising events in the Middle East. The company’s mission is "to create an effective platform, in a conducive environment, to bring clients and consumers together in one location for a common purpose.” DSL Exhibitions has many brands under which the company organizes its shows to keep up with the complexities of ever-changing markets. Their property exhibitions attract leading international developers, agents, lenders, mortgage brokers, lawyers and investment consultants
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