2006 is the year that the real estate in Dubai starts tumbling down. The real estate market has become supersaturated in Dubai. Will the real estate market revert back? It is very unlikely in the near future. Demand has become forever low and the supply is evermore high. The prices are also at an alarming high. Prices in Dubai are super inflated.

Does that mean you should not buy? That is not what I said. Whether you want to buy property or not depends on more factors than simply the real estate market. Let me help you. Imagine that an apartment today costs 1,000,000. By the end of the year, the same apartment may cost you only 900,000. Therefore, should you wait to buy to save the few thousands? Not if the rent is 100,000 then you have nothing to lose, but actually gain on less cost on interest.

Although the real estate market is going down, interest rates are growing higher everyday. Thence, if a property loan costs 6% today, by the end of the year, it could cost 9%. Also, if you purchase property today, you will have the benefit of getting rent revenue now, instead of waiting for another year. Therefore, if you calculate your finances for purchasing property, it may be that the property value will decrease slightly, but how much would you have saved in interest and how much extra in revenue would you have received?

Real estate is usually the best long-term investment, because land on Earth is not increasing, while population is dramatically increasing, sending the demand to sky rocket. Therefore, even if the real estate market in Dubai is not at its best year, investing in real estate is still very profitable ands the most stable type of investment.

However, before you embark in real estate investment, please give us a call for a free consultation on where and what to buy?

This week’s recommendation:

Consider buying Studio Apartments in the International City, Dubai. Prices are not overly inflated. Percent income is also high for Dubai.