In one of his annual shareholder letter, Warren Buffett, Chairman of Berkshire Hathaway said: “Home ownership makes sense, particularly at ‘today's lower prices and bargain interest rates.’
Pointing out his own tenure as a homeowner as an example. "All things considered, the third-best investment I ever made was the purchase of my home, though I would have made far more money had I instead rented and used the purchase money to buy stocks.”
The first and second best investment, Buffett revealed were his “wedding rings.”
Over the years, Buffett has advised people not to wait for long when taking a decision on investing in real estate, but has cautioned a house could be a nightmare if the buyer's eyes are bigger than his wallet.
Back to Dubai.
Prime property prices are moving northwards. The villa segment has seen a 20 per cent price rise in 2012 compared to 2011. But Knight Frank‘s Wealth Report 2013 revealed that Dubai was the least expensive market compared to Monaco, Hong Kong, Singapore, New York and Mumbai when buying luxury properties.
Buying an apartment is still affordable and offers good return on investment with price appreciation likely over the next few years. Communities with solid infrastructure and close to Dubai Metro are witnessing high demand, for both sales and leasing, registering gains in capital and rental values.
So what can you buy for Dh1 million in Dubai, particularly in communities located along the arterial Sheikh Zayed Road?
Lets start with Downtown Dubai — a master development that has seen launch of the maximum real estate projects to date this year. Emaar Properties, Dubai’s largest developer, has launched three projects, while Damac Properties, a private developer, has launched two projects.
The master community is home to Burj Khalifa, the world’s tallest tower and Dubai Mall, one of the largest mall in the world. Early 2011, one could have bought a spacious a one-bed unit for Dh1 million But today, one beds are no longer available in that price range. The only options are small-sized studio apartments.
Prices, according to Hamptons Mena, rose by over 30 per cent last year. Asteco puts the rise at 18 per cent with the average price nearly around Dh14,000 per square metre. Services charges range between Dh14 and Dh20 per square feet.
Adverts (online and newspaper) scanned by this website reveals the following rates:
678 sq ft studio South Ridge: Dh975,000
450 sq ft studio Claren Tower: Dh830,000 to Dh900,000
438 sq ft studio Boulevard Central: Dh870,000
520 sq ft studio 8 Boulevard Walk: Dh750,000
400 sq ft studio Standpoint: Dh796,000
Moving to Business Bay, here you have plenty of options. Of course, one-bed and studio apartments are in abundant below the Dh1-million mark. Though infrastructure snags have been blamed to the slow offtake of commercial space, several initiatives have been taken to complete the infrastructure. Internal roads have been completed, shops and restaurants have sprung up. However, no two-beds are selling below our target range. Current prices range between Dh800 and Dh1100 per square feet. In 2011, the prices were as low as Dh700 per square feet. Service charges range between Dh14 and Dh20 per square feet. Here is the list prices:
975 sq ft one bed in Ontario Tower: Dh1 million
760 sq ft one bed in Clayton Residence: Dh899,999
646 sq ft one bed Mayfair Residency: Dh700,000
700 sq ft studio Executive Tower: Dh980,000
562 sq ft studio Hamilton Residency: Dh580,000
442 sq ft stuio Executive Bay: Dh596,000
Tecom is one of the freehold area not much talked about. A number of freehold projects have been announced but not many buildings are completed. One of the prime project is Madison Residency, next to Dubai Internet City Metro Station, which has seen price go up by almost 15 per cent in the past one year. The building has a service charge of over Dh12 per square feet, including chiller. Currently, few units are listed at:
550 sq ft studio Madison Residency: Dh550,000
770 sq ft one bed Madison Residency: Dh750,000
One of the most popular area for the families is The Greens. One can still purchase a one-bed unit, but mostly in older buildings such as of Al Dhafra, Al Thayal, Al Ghozlan and Al Alka. In 2011, one beds were selling for as low as Dh600,000. The Greens comprises 36 buildings set over 65 acres with 3,500 residential units and four office buildings. The following are the listings:
742 sq ft one bed Al Dhafra 3: Dh850,000
961 sq ft one bed Al Ghozlan 3: Dh900,000
761 sq ft one bed Al Thayal 4: Dh920,000
758 sq ft one bed in Al Alka: Dh880,000
Dubai Marina topped the list of maximum property purchases made last year. According to real estate consultants, prices have risen by over 14 per cent and demand exceeds supply in quality buildings. Maximum options are limited to one beds and studios, with only few two beds listings. Here they are:
1200 sq ft two bed Manchester Tower: Dh950,000
1085 sq ft two bed Diamond Tower: Dh950,000
550 sq ft one bed Manchester Tower:Dh670,000
624 sq ft one bed Marina Diamond 3: Dh650,000
835 sq ft one bed DEC Tower 2: Dh650,000
690 sq ft one bed Marina Diamond 2: Dh690,000
700 sq ft one bed Dream Tower: Dh700,000
Jumeirah Lakes Towers is the only freehold and free zone community on Sheikh Zayed Road with two metro stations. The master developer is currently working on converting one of the lakes into a public park — a move appreciated by the residents. Two years back, the community did not have many retail outlets or restaurants, but today most clusters are witnessing opening of new retail outlets and restaurants. Prices have appreciated by 10 per cent in quality buildings, vary with each tower. Quality of construction and building maintenance plays a prime role in getting premium. Ample two bed options are available; some of the listings are:
981 sq ft two bed O2 Residence: Dh750,000
921 sq ft two bed Dubai Gate 1: Dh795,000
1089 sq ft two bed Icon Tower: Dh750,000
887 sq ft two bed Dubai Gate 1: Dh800,000
1000 sq ft two bed Gold Crest Views 2: Dh995,000
1248 sq ft two bed Lakeside Residence: Dh1 million
Prices in Jumeriah Beach Residence jumped by almost 8 per cent last year. The development faces 1.7 kilometers of beach and features luxury hotels, retail outlets and restaurants and has 36 residential towers. Price appreciation has been considerably lower than other areas. Service charges are in the range of Dh15 to Dh19 per square feet. Ample options are there for studios but listings for small-sized one-bed are quite few. Here they are:
780 sq ft one bed in Bahar 6: Dh1 million
670 sq ft one bed in Rimal 4: Dh1 million
712 sq ft studio Murjan 2: Dh1 million
759 sq ft studio Rimal 4: Dh979,000
675 sq ft studio Murjan 2: Dh 850,000