I have the possibility to go and work in Dubai for a period of up to 2 years.
My salary will not increase hugely but I will get a housing allowance. Should I therefore consider buying instead of renting with a view of reselling/letting when I leave?
There seems to be lots of 1 bedroom apartments for sale right now? Should I stretch my budget & go for 2 beds?
I will be working in the Jebel Ali Free Zone. What would be a nice area nearby?
Thanks for your advice. I'm completely new to this game.

Hello,

I have looked at property in most parts of Dubai and in most parts it is let us say "maturely" priced. ie. If not overpriced it is definitely not cheap. There is probably going to be very little price appreciation in the near future in most parts of Dubai. This is especially so since a large amount of supply is coming onto the market to meet any increase in demand.

I have bought in the International City which is the most reasonably priced development in Dubai, but this may prove too far from your workplace, although I have utterly no idea about how long commuting would take. If you were to buy in the International City, rental yield would be probably better than anywhere else in Dubai, in fact better than most places in the world.

If you are looking to buy and re-sell a flat after two years, there is no guarantee you will make any real profit since buying property incurs expenses (I have had to pay 2% in fees to the developer, currency exchange charges, bank transfer charges, not to mention any interest on any loan you might need).

If you are looking to re-let and holding the property over the long term, then it is worth considering more seriously.

I think you should doa little math. As far as what I have seen the rent for two bedrooms run about Dh40,000. For two years you will pay Dh 80,000. Most International City 1 bedroom go for 350,000 so at the least you should be able to sell it for what you would buy it for!

If thats true then you will save Dh80,000.

So please confirm these numbers and buying looks like it is a good option.

Q's: As a expat do you still pay same income tax as you do while UK?

Thanks
Jawaid

Karine: I'd strongly advise against making any decision whatever on the basis of what you read on these C4 threads. Work there for a few months first, and look around, and then make the decision on your own - all the time remembering that it's your money - lots of people will give you advice on how to spend it, but none of them are going to be worse off if it turns out bad - other than you.

I think that it's deeply irresponsible to advise people that they can get a guaranteed revenue from a generic sort of flat for the period of a mortgage. No one can be sure. Comments like "you should be able to sell it for what you buy it for" are laughable - how can they know what the market will be like in a couple of years time? Are they certain enough to underwrite what they say with a guarantee? Obviously not.

Look at this week's Sunday Times - Loads of people paying hefty deposits only to find that the developer goes out of business, retires to their UK estate, and leaves them with nothing. This is probably an isolated incident, given the scale of development, but who knows?

As I said, wait until you're out there and then see. After all, you might not like the job /location /colleagues and decide to check it in ..

In response to msej449's charge of irresponsibility I can only say this.

Yes, you are quite right about some things. It would definitely be wise to go there first and see whether the job, location, etc are agreeable before making any decision and no one can be sure of future conditions.

There may well not be any price appreciation in the near future, especially when you consider the Dubai Government is largely committed to avoiding a runawawy property boom and is generally willing to actively intervene to support or dampen prices.

It is definitely not for professional property speculators sat in the UK.

Having said all this, for those of us who are actually going there to do business or to work, it is definitely worth considering the question of whether to buy.

Rents are pretty high at the moment and will definitely remain so until the next wave of completed properties comes on to the market (which is looking like mid-2007 at the earliest).

Buying is definitely not a straightforward option but 40K AED (£6K) a year in rent is not peanuts either.

One option definitely worth looking at for those scared of buying is sharing any rented accomodation.

To Jawaid_Chicago,

Interesting question. I think it depends on what kind of taxation agreement there is between the UK and UAE governments. I have never looked at this question since I have no intention of returning to the UK full time.

Still, I will see if I can find anything on this question.

javaidkamar: I think that yours is exactly the sort of balanced response that sounds sensible, in contrast to a lot of the postings about Dubai. Yours is a fair point, based on personal experience of working in Dubai, and it may well be that buying is still a better alternative to renting, even in terms of someone who is only intending to stay a couple of years. What I get annoyed about is people who recommend an irrevocable course of action to someone when they can't possibly have all the information to hand. What works for one person may be quite inappropriate for another.