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Getting your first home purchase right

Getting your first home purchase right

Alya Mahdy looks at some important factors to consider when preparing to buy your first home

Buying your own home is one of the most important things you will ever do.

Your home is the haven around which you base your entire life. It is the place where you spend your time relaxing, it is where you entertain your friends and family, it is where you raise your children and it is often the largest single financial asset within your overall net wealth.

In Dubai, with a shift towards more affordable homes and greater transparency in the market, owning property is no longer a privilege for older or high net worth individuals, but is now a goal that can be achieved by an increasingly diverse group of buyers. It is crucial for these younger age groups to know how to navigate the changing property landscape and make the most of available opportunities, to ensure that that most important of financial and lifestyle steps they take is the right one.

The single biggest piece of advice that we at Jumeirah Golf Estates can offer is make sure you are properly informed; and the best way to do that is to use the right real estate broker.

In this context, two prevailing trends are relevant, one demographic, the other technological.

According to the Dubai Statistics Centre, the 25-34 age bracket in Dubai grew by over 80 per cent between 2005 and 2016. Meanwhile, technology continues to play a key role in all parts of our lives. For this age bracket, and especially in a city that has put innovation firmly at the heart of its growth strategy, technology has become a standard tool for making buying decisions, and this inevitably includes real estate.

Instead of traditional advertisements and billboards, information on property is now freely available online, and is being presented in a whole variety of ways: 360 tours, interactive sites and online transacting mean that the entire experience of buying a property has fundamentally changed over the past two to three years.

For buyers, this is where the right broker has an even more significant role to play. We welcome the professionalisation that has taken place in the Dubai broker community over the past decade as the market has matured as a residential buyers’ destination. The requirements for brokers to have an intimate knowledge of properties they are selling will only increase as a greater proportion of the market is made up of millennials: the first generation to have been brought up knowing only a technologically driven world, who are as a result more discerning and more demanding in all that they do.

The better informed and the more demanding a potential buyer is, the more comprehensive the service a broker needs to offer.

However, according to the Dubai Land Department, 74 per cent of real estate agencies in Dubai have a maximum of three people. This is an issue, since small agencies are more likely to encounter financial difficulties, potentially have less market knowledge and traction and may often treat buyers as guinea pigs. You do not want to be part of a small agency’s trial-and-error process. The need for the real estate market to demonstrate superior levels of professionalism has never been greater, and it is in the market participants’ interests to do everything necessary to ensure this.

At Jumeirah Golf Estates we treat our select panel of brokers as business partners: they are our face in the market and we need them to reflect our commitment to excellence. We are also transparent about how they are remunerated. We have recently decided to offer broker commissions of 5 per cent for off-plan sales. This is above the market average of 2 per cent. Our rationale is that by paying better than average rates, you ensure better service; but only, of course, if the developer has a rigorous selection procedure in place.

Property developer awards are another good reference for a buyer when selecting an agency, because they demonstrate a strong relationship between broker and developer, giving confidence in the broker’s level of understanding.

Another critical issue is the increasing diversification of product. A study by researchers at UAE University stated that Dubai has one of the fastest growing populations in the world, with a 6.5 per cent growth rate from 2005 to 2015. If this trend continues, the population of Dubai will more than double by 2027, reaching around 5 million. Such a rapidly-growing population combined with an increasingly diversified economy not only makes the prospect of investing in real estate more attractive, but also creates the need for greater variation in housing products; and it puts greater pressure on brokers, because the expertise they are required to demonstrate will need to be more extensive. This again highlights the importance of dealing with a properly accredited broker.’

The opportunities for good returns in Dubai’s real estate market are significant, and the market remains active. According to Core Savills, the number of deals for built units in Dubai since the beginning of this year has increased by 7 per cent year-on-year, while in comparison, off-plan sales jumped 62 per cent. In fact, according to a report published by Chestertons Mena, off-plan homes are typically more affordable, evidenced by the fact that off-plan sales increased by over 110 per cent in Q3 2017 compared to the previous quarter.

For young buyers, the sector is therefore ripe with opportunities, but it is essential to know what you want, and to do your homework; and that means working with an agency who has the requisite knowledge, experience and capacity to provide the right advice and to match buyers with the properties most suitable for their requirements.

Alya Mahdy is executive director of commercial at Jumeirah Golf Estates

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