Confessions of a Real Estate Agent October 2018

Urban Myths

As I engage with clients, developers, and the media, I am often amazed at the amount of misinformation out there. Human beings have a classic method to confirm their individual viewpoints by taking snippets of information and then applying them to the entire picture to validate their opinions, perspectives, and worldviews.

Once their worldview is self-validated, they then share this ‘truth’ with others and so it spreads throughout the community, building momentum as more and more people hear it as a ‘fact’.

There is a small flaw in this method, in much the same way as a piece of a kaleidoscope misinforms us about the whole picture.

There is distortion amidst the grains of truth sprinkled about.

In other words, a little piece of information usually doesn’t tell the whole story.

Let me examine three urban myths to highlight the problem and to establish some ‘truth’ around each case.

Urban myth #1: Prices have come down by 25%

Dubai is experiencing challenges as in other parts of the world right now – there is much talk about ‘over-supply’ which leads some people to voice an opinion such as this urban myth.  I have addressed the non-issue of Dubai’s so-called property over-supply in previous newsletters.

Only just a few weeks’ ago, one of my clients sold his apartment and made 20% net profit over a two year period on his original investment.  Of course, he was smart and selected the right developer, the right quality and the right level of amenities.

I can confirm that we have seen some values dropping by 20% however the  truth is many areas are holding firm on prices, and in some areas, increasing.  

This is why it is important to talk to someone with solid local experience and history in the area.

Urban myth #2:Rents and values in all areas of Dubai have dropped

Prices and rents for quality properties are not decreasing by very much, if at all, however, the older developments and poorly designed and poorly built developments and communities have seen falls.  

For the reasons mentioned above, many of the quality properties with excellent finish, amenities, and management are more than holding their own in the current market.

Look at the example of quality developers such as Emaar or Ellington.  Post-sale, the developer remains and continually enhances the community which adds enormous value to their brands so matching their public declaration of their values on their respective websites and publications.

Emaar continually enhances their communities, with improved facilities such as retail and schools and even installing art installations and other aesthetic touches throughout its developments to ensure the promises made in their marketing at the outset of the project are kept.

Ellington’s careful selection of choice materials and emphasis on design for their properties is additionally matched by arranging outdoor community social activities over the cooler winter months and even implementing a ‘green’ solution to car-washing.

They don’t walk away.

Urban myth #3:Location, location, location!

Location is not as important a factor in Dubai as it is in other cities of the world.  Investors and tenants are seeking property for reasons other than a desirable location in the city.  Yes, you will pay a premium for a property near the beach  and in some of the more-valued areas such as Emirates Hills and Downtown.

Location gives you a price-range and lifestyle.

Unlike overseas, people are renting and investing in properties that match their personal values and , whether that is living a luxurious life in one of the city’s 5* beach front developments or by going ‘green’ in Sustainable City where movement within the community is achieved through a fleet of electric buggies.

As I have said many times before, whoever you are and whatever your background, there is a property waiting here for YOU in Dubai.  And right now, the market for buyers is about as good as it gets!