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28 March 2024

Expats have different reasons to buy a Dubai home

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By Staff

A local classifieds platform has commissioned a research study to unveil the sentiment of the dominant millennials segment towards buying a home locally, the reasons behind this and awareness of new home search methods.

The findings of the study commissioned by dubizzle were derived with the backing of the platform’s wealth of data and by face-to-face interviews conducted by a commissioned third party research firm, showcasing the perception towards home buying in Dubai, decision making factors, favourability towards new home buying search methods and the awareness of new concept homes.

Reasons by nationality for wanting to purchase in the UAE:

Western Expats

Western expats see the UAE as a good place to make a healthy living tax-free, and have a more luxurious lifestyle than they would back home if they held the same job.

They can contribute a decent share of their wallet to purchasing a home as well as have enough to live a comfortable life with the perks of putting aside a budget for entertainment.

In specific to British expats, the Brexit has stirred up many questions as to the impact it has left on this segment’s intent to purchase UAE property as opposed to shipping money home due to the exchange rates.

The survey revealed higher scores for Westerners (inclusive of British expats) more than other nationalities when asked how important they felt it was to purchase a home locally here in the UAE.

Despite the fact that the UAE dirham has risen approximately 20 per cent against the British pound since the June 23, 2016 referendum, the emerging investors within the millennial category still sees it of value to purchase locally relatively soon.

This because of the flattening out of the sale price per sq. ft. in Dubai’s property market, making it a ripe time to consider property purchase if the individual is keen to call the UAE home for a while.

Arab Expats

A knock-on effect caused by the Arab spring over the past decade has left Arab expats (outside the GCC country group) a dominant property buyer segment here in the UAE.

According to the H1 report released by the DLD, Arab expats contributed to a total investment value in property of Dh7 billion from 7,577 deals. Jordanians (765 transactions,) Egyptians (710 tractions) followed by Lebanese (432 transactions.)

dubizzle’s research study confirms that the UAE remains a prominent choice for Arab millennial expats to purchase property in the UAE with 54 per cent of its sample stating that their country was not a safe place, “risky” to invest in and/or that they did not want to go back to their home countries to live long-term, 41 per cent of whom were Arab expats.

Asian Expats

The survey also revealed that the first-time buyer Asian expat (predominantly Indian expats) millennial segment on the contrary were more in favour of purchasing their first property back home.

The more established Indian expat who already has property/properties back home would purchase in the UAE due to the UAE’s convenient geographic proximity to the homeland India and well as it being able to provide an ideal business environment to set up shop for new business entrepreneurs.

The DLD’s 2016 H1 report states that Indians after UAE locals were the second biggest segment of property investors contributing Dh7.27 billion worth of transactions.

Reasons for not wanting to purchase in the UAE

Quite simply, those who did not want to purchase here, did not know if they wanted to spend the rest of their life here in the UAE, hence the purchase of a property meant to them commitment that they didn’t see as worthwhile.

Almost half (47 per cent) of those who said they did not want to purchase a home in the UAE identified this as the main reason.

A third of this group (34 per cent) are planning to buy in their home country within the next 3 years, predominantly Indian expats.

A quarter of this group (25 per cent) said that home purchase was too early, that instead they wanted to invest their money in their own business or other businesses with ideas they support.

This is a positive hopeful ripple effect caused by the social unrest in some countries as well as the close proximity of the UAE to key trade and business hubs in India.

The millennial segment is cause-driven, hungry to impact change in the world furthered by exponential technology growth and a generation that’s more receptive to big-impact ideas.

For the property segment this means a start-up commercial property investor and renter today could potentially become an individual that grows into a home owner locally over time, post the initial 3 to 4 years’ challenge associated with breaking even and making a start-up successfully see the light.

According to the Dubai Statistics Centre as of 2015, the median age of residents in Dubai lies between 30 and 34 years, that is approximately 500,000 residents within this segment out of a 2.5 million population, 20 per cent.

If we expand that bracket further and taken into consideration the full rather of expats that fall within a millennial label 25 to 39, that equates to 1.2 million, 48 per cent of the total population of Dubai.

Millennials are also referred to generation Y and are individuals born during the early 1980s and 2000.

Baring in mind the above, dubizzle says it decided to delve deeper into the sentiment of this segment towards home buying in the UAE and the reasons behind it by conducting a 3rd party face-to-face research study of residents in the UAE spanning both Abu Dhabi and Dubai.

The sample earn anywhere between Dh20,000 to +Dh35,000 a month where 31 per cent were middle management level and 13 per cent were owners of their own business.

Dubai, a millennial market

Forty-four per cent of millennial expats surveyed said they wanted to buy a home in the UAE in the next 3 years. Whereas 59 per cent of the sample pool said they wanted to buy outside the UAE in the next 3 years.

The 59 per cent who said they wanted to buy outside the UAE, preferably in their home country was quite simply because they didn’t know how long they wished to stay in the UAE.

There was however a crossover in regard to certain individuals considering to buy both abroad and the UAE within next 3 years, with the intention that the UAE would serve an ideal base during the prime years of their careers.

When asked about the important of buying a home in the UAE, Westerners and Arab expats scored higher than Asian expats who would rather buy a property back in their home country.

Self-research (non-influenced by others) for this segment is the most important factor during the home search decision making process

At least 32 per cent of the segment intending to buy claimed un-aided independent self-search as being the most important factor to reply on when making their final decision.

This includes reading up on the economy, market, and communities to gather facts themselves and form an opinion.
Followed by this they would confide in family and friends, after which they would firm up their perceptions by cross-referencing credible websites and apps.

The least important but the most mentioned factor was agent advise – 56 per cent mentioned that they need to get agent advise to validate the perceptions they have pre-formulated by their own research, influence of friends and family and information found of preferred websites and apps.