In a recently conducted survey by DSL Exhibitions – organizers of the R&R Local Property Show, due to be held at the Dubai Crowne Plaza, on Thursday 16, Friday 17 and Saturday 18 of October – results demonstrate a growing sense of belonging towards the UAE among those who have bought property in the country. In contrast, those respondents who have not yet invested in real estate in the region feel less at home here.
“UAE properties have been open for investment to expats for several years now and several tens of thousands of foreigners are now living in their own homes in the country – a stark contrast to ten years back where every expat had to rent,” said Tessa Morris, Marketing Director, DSL Exhibitions. “We thought that the time was ripe for a survey that tried to discover whether the ability to buy property in the UAE has increased expats’ sense of belonging towards their adopted home.”
The real estate market in UAE has matured significantly and is still growing by leaps and bounds, especially in emirates like Ajman. Khurram Wahid, Director of Chapal, citing an example, said: “Property prices in Ajman have risen by an average of three to five per cent every month for the past two years. When we launched our projects in February 2007, our average selling price was 300dhs per sq.ft. It is now Dhs 625 to Dhs 650 per sq.ft. and is expected to touch 700 to 750 Dhs per sq.ft. by early 2009.”
On the downside, financial and mortgage products have not kept pace with this demand. Khurram Wahid comments: “There is a very visible shortage of mortgage/home loans facilities, especially for Ajman based properties. Places like Ajman offer tremendous advantages but a substantial number of potential clients are deprived of these advantages due to lack of mortgage facilities.”
Whatever the ups and downs of the UAE property market, a large number of expats have chosen to invest here and most are feeling truly at home, as this survey demonstrates.
Survey results
Sample size:
• Own property in UAE (owners): 173
• Do not own property in UAE (non-owners): 173
Survey design:
• The survey targeted expatriate adults who have been residents of UAE for at least the past 3 years or more, with or without a break in their stay.
Demographics of respondents:
• 72% Male / 28% Female
• Aged between: 25-45 years old
• Occupation: 84% Employed / 7% Business owners / 9% housewives
• Nationality: 60% South Asians / 20% Western Expats / 20% Arab Expats
Comparative section: Targeted at both owners and non-owners to identify opinion differences if any
1. How long do you plan to stay and work in the UAE?
Owners:
• All my working life: 62%
• Over 10 years: 33%
• Under 10 years: 5%
Non-owners:
• All my working life: 32%
• Over 10 years: 31%
• Under 10 years: 37%
Highlights: A much larger proportion of owners say that they want to stay longer in the UAE – including a whopping 62% of owners saying they wish to live and work in the UAE all their productive years, compared to only 32% non-owners.
2. Do you have friends belonging to nationalities / ethnicities other than yours?
Owners:
• Yes: 62%
• No: 38%
Non-owners:
• Yes: 61%
• No: 39%
Highlights: Both owners of real estate in the UAE as well as non-owners are similarly integrated into Dubai’s multi-cultural environment.
3. Do you feel a sense of belonging in the UAE?
Owners:
• Yes: 78%
• No: 22%
Non-owners:
• Yes: 46%
• No: 54%
Highlights: The biggest surprise of the survey is how strongly owners of property feel about their adopted country, with a large majority (78%) saying that they feel a sense of belonging here. While this is a non-quantifiable, emotional state, it goes on to show how important home ownership is to a person’s sense of belonging.
4. How do you foresee UAE’s economic future over the next 20 years?
Owners:
• Positive / stable: 62%
• Negative / unstable: 38%
Non-owners:
• Positive / stable: 58%
• Negative / unstable: 42%
Highlights: Both owners and non-owners feel the same way about UAE’s economic future – clearly, real estate ownership has no impact on the respondents’ opinion about the country’s financial prospects, which remains positive across the spectrum of those polled. This is a factor that perhaps underlines the prediction that property investments are perceived as sound and secure by the majority of expats.
5. How do you foresee the future of UAE society over the next 20 years?
Owners:
• Positive / stable: 72%
• Negative / unstable: 28%
Non-owners:
• Positive / stable: 51%
• Negative / unstable: 49%
Highlights: Over 72% of those who own property in the UAE expect to see a stable UAE society, while only 51% of non-owners felt this way. The differential in perceptions is clearly an indicator that those who now own property in the UAE have more faith in the country’s social fabric and its sustainability.
For Owners: Questions directed only to those who have invested in property in the UAE
6. Would you consider living in the UAE after your retirement?
• Yes: 86%
• No: 14%
Highlights: A large majority of those who own property in the UAE wish to retire here – a startling revelation, indicating that the country’s demographics will change over the long run.
7. Are legal issues such as inheritance of your property and residence visa permits a cause of concern for you?
• Yes: 47%
• Somewhat: 25%
• No: 28%
Highlights: Inheritance and visa issues still worry expatriates, as several of the new rules adopted by Dubai are still in the process of implementation and the general expat population is still vague about their rights and that of their descendants.
8. Will you hold onto property for investment purposes once you left the UAE?
• Yes: 93%
• No: 7%
Highlights: A clear thumbs up to confidence in the UAE property sector, where owners are keen to remain invested here even after they have left to live elsewhere demonstrating strong faith in the strength of this market as a long term investment proposition
For Non-owners: Questions directed only to those who have not invested in property in the UAE
9. Has the introduction of RERA made you more comfortable about purchasing property in the UAE within a legitimate framework?
• Yes: 36%
• Don’t know: 42%
• No: 22%
Highlights: Non-owners too remain unsure about regulations already in place, as well as those being implemented now – a sure sign that there are a significant number of potential buyers who might not be investing given the unclear laws.
10. Do you resent spending so much money on rent when it could be converted into a mortgage?
• Yes: 87%
• No: 13%
Highlights: While anyone could have guessed this, the numbers demonstrate how deeply the rise in property rentals has bitten into people’s lives.
11. Would you buy property if you could get an interest only mortgage given the high capital growth rates here?
• Yes: 51%
• Don’t know: 43%
• No: 6%
Highlights: Clearly, people want to exercise this option – or want to know more about it. The dearth of financial products, transparency of the mortgage process and flexibility of payments remain an issue – a factor that can benefit the financial services sector as well as the property businesses if suitable products with essential regulatory safeguards are introduced.
In summary
The bold step that Dubai took several years back of opening the real estate sector has truly paid off for the UAE from a developmental perspective. But as the country has benefited from investments from expats, so have the property buyers. Today, a significant portion of foreigners living in the UAE own their own properties, shifting the country’s demographics where expatriates are no longer a ‘floating population’ and are growing stronger bonds with their adopted country.
