London or Dubai

[Haider Asfandiyar]

Hello dear amazing real estate lovers I was recently surprised to look at dwindled real estate market of Dubai in recent times, at the same time UK construction economy is catching up and if we look at London industry so it speaks of extremely high demands. I want to ask your opinion that as a beginner where should I invest to get maximum turn over Dubai or London and exactly in which locations. Also how much would be a safe investment for a beginner like me. I am not acquainted with London and Dubai markets and would be a foreign investor. Looking forward!

[Morgan Nilsen]

hello Haider Asfandiyar

Its an interesting question you are asking, but why are you looking at only those markets? Dubai's property prices has fallen as the market have become somewhat not as good as it used to be. Increasing transfer rates, higher requirements of downpayment, much supply of new builds, and so on. 

Its a place that has relatively high yields, but what are you really after? If you are looking to generate wealth, then I wouldn't recommend Dubai simply because of the market being so unstable. You are more likely to find success in big coastal cities in the western world. Again, you have to think how long you are going to be in the property for. In Dubai you can find crazy returns if you time your investments right, but the downswing can hurt you just as much. With Expo2020 coming up, I expect Dubai to see growth in the short term, but im uncertain as to what will happen after this. I also believe that the Chinese economy plays in to the property market in Dubai as there are a lot of chinese investors here. If the china bubble burst, which personally i think it will, then its most prudent to assume the market in Dubai will go down.

Another level to consider is the rise of the American dollar. The people I listen to in finance suggest that the dollar will still increase in value, and as the AED is tied to the dollar, you will enjoy an upswing if you get in now, but if you are not ready to move quickly and the dollar increase in value before you buy, you only stand to lose in the currency, (as im expecting you are buying in pounds).

I have lived in Dubai for almost 4 years now, and I invest in Norway. I find the Dubai market to be too unstable for my liking. and the 4% transfer fee is a killer, unless you plan to stay in the market for a long time.

If you could tell me a bit more about your plan, I could suggest a place for you. Or if you need help to form a plan, im happy to do this also.

London is a safer investment, and Dubai has the potential for more upswing, but is more risky. But remember the world is a big place. You have tons of options