Today's Edition
A.SREENIVASA REDDY (DUBAI)
Majority of house owners in Dubai acquired their homes with their own money without obtaining any loan, a survey has revealed.
In a survey of 367 home owners conducted by Betterhomes, a real estate consultancy, it was revealed 53 percent of respondents bought their homes outright with their own savings. Only 47 percent bought homes with mortgages, testifying to the stability of the real estate market.
Relative non-dependence on loans for buying properties is a sign of financial health of investors, who did not need to borrow money, with sometimes hefty interests rates, to finance their purchases. Mortgages can become toxic in a situation of economic crisis with the loan-takers not able to pay the installments due to erosion of their earning power and the values of properties becoming less than the value of mortgages. The fact that the majority of purchases are happening with the hard-earned money can have beneficial effect on the health of property market.
A veteran of credit management industry, Mukhthar Qureshi, CEO of MENA region, Taurus Credit Management, said, “I have witnessed firsthand the challenges faced by borrowers struggling to repay mortgage loans. Often, circumstances beyond their control lead to defaults, leaving them unable to fulfill financial obligations.”
Welcoming the idea of outright purchases or investments in residential real estate as astute move, Qureshi said, “The trend of using hard-earned savings contributes positively to the overall health of the property market.”
Betterhomes produced a report titled, ‘Future of Living: Dubai 2024 Edition’ based on a survey of 1,612 respondents, which included 1,245 tenants, apart from 367 home owners. The report sought to “capture the essence of Dubai’s vibrant real estate landscape”, said the Louis Harding, Managing Director of Betterhomes.
According to the survey which was conducted between July and August, millennials, aged 28 to 43, are the most prominent demographic in Dubai’s real estate market, representing 56 percent of all respondents. The average income for tenants is Dh32,303, while for property owners, it is Dh45,616, highlighting a notable income disparity between renters and homeowners. The average age of tenants in the sample is 39.4 years, while the average age of property owners is 45 years, the survey report said.
The survey also revealed that a significant portion of residents are choosing to stay long-term. An impressive 72 percent of respondents have lived in the city for over five years, and 89 percent intend to remain for at least another five years. Of which, 66 percent plan to live in Dubai for over a decade. Traditionally, Dubai was often seen as a temporary stop for expatriates—a place to work and live for a few years before moving on. However, the survey reveals a significant shift in this mindset, with many now viewing Dubai as a long-term, even permanent, home, the survey report said.
Apartments remain the most popular housing option, particularly among lower to mid-income tenants across all age groups, the survey revealed. These renters tend to prioritise affordability and proximity to key urban areas, making apartments the most practical choice.
As income levels rise, villas and townhouses become increasingly desirable, especially among mid to higher-income tenants. Townhouses, in particular, appeal to mid-income tenants as they offer a balance of space and affordability—more spacious than apartments but less costly than standalone villas. At higher income levels, preferences gravitate towards luxury villas, duplexes, and penthouses, the survey report said.
The survey also revealed that the average rent-to-income ratio in Dubai stands at 30 percent, which is competitive compared to other major global cities. In cities like New York and London, residents typically spend 40-50 percent of their income on rent, and in places like Hong Kong and San Francisco, this figure can exceed 50 percent.
Looking ahead, 55 percent of tenants expect their rents to rise by 5-10 percent at their next lease renewal, reflecting the current market trend of increasing rents driven by high demand and limited supply. Conversely, 19 percent of tenants believe their rent will remain unchanged during their next renewal.
