Dubai Real Estate Market Analysis: Dubai’s Top Broker Shares Insider Secrets.

Hi there, I'm GG Benitez, a certified International property specialist and a licensed realtor connecting global real estate investors with incredibly lucrative opportunities in Dubai real estate. Today, right here on Season 4, Episode 3, I have one of the best guests I can possibly have on my show, Mr. Muhammad Kwame, the Property Finder VP and an incredibly knowledgeable and managing director of Mortgage Finder. He's here with us today. Welcome, Muhammad. I'm so very glad to have you back here with us. Thank you so very much for having me here. Always good to see you, Gigi. But hey, why do you call me Mister? It makes me feel like a high school principal or something. I feel like I have to do that extra respect factor for you because you are so worthy of it. Is it maybe because I'm wearing a jacket? I mean, I'll take off the jacket. Yes, it's the jacket, exactly. You know, actually I was sharing this with you right before the recording started. I wanted to tell you that out of all Season 2, when you were here last time filming our episode where we talked about the Market Outlook 2024 with you, that's the one that resonated the most with my viewers. People really wanted to eat and soak up the information you provided. So I'm really excited to have you back here to do a little bit of a year in review. We were right with everything we predicted, even probably under. Aren't you glad we were absolutely right? Yes, thank you for saving me. Now that we are in November, can you believe it? Yes, November is definitely here. We can talk a little bit about what to expect the rest of the year and then answer some of the questions I'm asked frequently. Are we in a bubble? Will prices continue to soar next year? Is it already maxed out? We know the answers, but with you being who you are, and actually if you could dig a little bit deeper introducing what Property Finder and Mortgage Finder is and why this is such an important part of the strategy when making decisions in Dubai, I'd love to understand your offering better. Yeah, absolutely. Thank you very much indeed for having me back here again. I'm definitely, absolutely glad that our numbers were spot on from last year's predictions, and I'm going to come with another optimistic tone about next year. Let's definitely hear it. A little bit about Property Finder: I think considering your audience is mainly US and Canada, we are in so many words the Zillow of the Middle East. That's exactly how I describe it perfectly. I love that you just said that. So we're the leading real estate search portal in the Middle East. So at Property Finder we've been in business since 2007, and we're the most trusted platform for people searching for properties, both to buy and rent, as well as new projects. I also lead the mortgage vertical within Property Finder. Mortgage Finder is a full-service mortgage provider. We've also been in business for nearly 20 years now. Property Finder acquired the Mortgage business back in 2015. We're also the leading mortgage provider in the UAE. We've got more than 900, we've crossed 900 Google reviews at a 4.9 rating. That's fantastic. I remember how important those Google reviews were, right? That's really how you define how you're resonating with your customers and clients. When my wife sees me reading the reviews every morning with my coffee, she calls me obsessive, but she's not wrong. So it's really the one metric that matters to me the most. It is really the one metric that I look at every single morning. We're very close to getting to that thousand, which I think will make us the highest-rated mortgage provider worldwide. There isn't a single mortgage provider who has as many Google reviews at a 4.9 rating. How proud does that make you feel? Incredibly proud. Even among Americans and North Americans and Canadians, it's not really well known that foreigners can secure a mortgage in Dubai by using your services. We actually have another podcast that I've done with Mr. Warren from Mortgage Finder as well. See, Warren, you can call him Mister. Mr. Warren, yes. Yeah, he looks a lot more like a Mister than I do. And we'll continue to use The Dubai Connect podcast to help educate North Americans about how to secure financing in Dubai. But now going back to Property Finder: being the Zillow of the region goes in line with how transparent Dubai's real estate market is. So whenever someone comes and asks me, I say please don't take my word for it. Here are the sources I'd like you to go to. You can find out what the prices per square foot are in certain areas. You can find out what has been the increase of prices per square foot in certain areas, with even certain developers, because Dubai Pro provides that information. So the numbers don't lie. It's there and I love that you have that so it backs up when I'm guiding and counseling an investor. Yeah absolutely and I'm very glad that you're finding it useful and that you're guiding many of your investors to our platform. Look, this is a joint effort between Property Finder and the Dubai Land Department, and it's something we're incredibly proud of. It could only be made possible with the level of regulatory support that we get. There is a meaningful commitment, what I like to call Dubai Inc, to promote that level of transparency in real estate and regulations. At Property Finder we're incredibly committed to democratizing access to that data. In fact, it is one of those initiatives that we talk about almost on a daily basis at Property Finder: how can we make the data more accessible? How can we change the format in which this data is presented to make it easier for buyers to understand? Right, because for people like yourself, you're incredibly clever, you know the real estate space really well. But the ultimate test is: can we present data in a way that my 84-year-old mom would look at and understand and be able to make decisions? I love that perspective. I want to bring up a little side note. You and I were talking separately from this because we're friends as well about our passion and love for Spain. I don't know if you know that I spent the summer in Spain exploring the real estate market there. One of the key reasons I did that is because Americans, Mexicans, Canadians, and Spain is one of the top places, of course, because of that European dream that we as Americans have: the lifestyle and the Golden Visa opportunity that Spain has. I was there spending time for a couple of months. It's beautiful. Spain is gorgeous. Where's it? What's your favorite place? I was staying at Estona, which is the new Marbella. Are you familiar with how the real estate works there? No. It scared me. There are no regulations. There is no transparency. There is no guiding body. There is not a trusted portal such as Property Finder or Zillow in America. There's not one brokerage that you can say is the most trusted. There are no regulations like the DLD. There's a squatting issue. If you don't catch the squatters in the first 48 hours, it's very hard to get them out. And so even though I really understand the appeal because we both love Spain so much, I had a hard time ethically and morally trying to engage. I was going to create actually, I have The Spain Connect, but I said how am I going to ethically and morally fully get behind Americans investing your dollars here when I cannot say without a doubt that your property is going to be well-managed when you're not here? We have regulations. We have regulations in place. It scared me and I still want to understand it more because there'll still be people that maybe for a vacation home, maybe it's not that much of a concern as an investment. For a vacation home and they want the Golden Visa for Spain, I can understand that. But for investment, for transparency, for regulations, for the safety of your investment, there is nowhere in the world that comes close to Dubai. Yeah I mean, look, the US, naturally right, in terms of that level of transparency and rule of law, there are many markets like the US, the UK, et cetera, to be fair, that definitely have those well-established regulatory frameworks. You're right. I do have a soft spot for Spain with you, particularly the south of Spain. We're all hopeful that a lot of these issues will be resolved with time. I think it's an incredibly rich community, incredibly rich culture. I have faith that it'll work itself out. You know, there are still ways, as you very well know, if you have the right local partners on the ground, that you can navigate the Spanish market and you can still manage. Having said that, it's definitely more challenging and less seamless. I think this takes us back again to what makes this place so special. You're right, we're incredibly blessed to be living in a country where the government is managed like a business: Dubai Inc. Right, Dubai Inc, exactly right. You know, I have the privilege of interacting regularly with the guys at the Dubai Chambers, and they were talking to me about how everything is on KPIs. You can see those KPIs are all revolving around: how do we make the city more friendly to residents? How do we make it friendly to investors? To travelers? To anybody? It is a welcoming environment, a truly welcoming and inclusive ecosystem right? Absolutely yes. I would agree with you. I couldn't think of many other markets worldwide. Of course, the US. I was more referring to when I'm talking to the US investors who have now been priced out of the market in the United States, priced out of the market in Canada. We know that 90% of wealth is built through real estate. So how do those Americans and Canadians build their portfolios and diversify? Which markets should they trust? I fully stand behind Dubai, and I proudly can sit here and say how safe your investment is in Dubai. It makes me proud and I can stand by it with such confidence. It's having people like you to help share what those regulations are in place, you know? Property Finder and the way that you work with the DLD: I've had the pleasure of having Dr. Mahmoud Alber from the DLD on my podcast as well. First-class human. We were able to ask those hard questions: how safe is an investment? Can the government just close my account? It's really the objections that we hear, and it's being able to come and overcome those objections right through the stories by asking you questions. 100% absolutely yes. Look, historically, perhaps fewer Americans invested in this part of the world because of the distance and there's always that perception: I'm in San Jose, California, why am I going to buy a property that is 15 hours away from me? But today, with the world going digital and there being so many digital platforms to discover the right property, transact on the property, manage it, particularly working with, and this is one of the things that I really love about the way you've structured your business and The Dubai Connect, it's a hyperfocused approach to saying I'm here to serve US investors to buy properties here. You're right, it is a lucrative opportunity. The city is providing healthier rental yields than most major cities on the planet. I do think I have a lot of faith and I think I may have said this on our previous conversation. I've learned over the years I've been here for nearly 14 years now. Wow. There's one thing I've learned: don't bet against the city. Great. What, and whatever they say they do, right? 100%. They take that very seriously. We are a country and a city that takes what we say very seriously. There are always these big, hairy, audacious goals that we set: saying we're going to double the population in 15 years. Guess what? We've now lived long enough to believe it. Yes, we know it's going to happen. How? I don't know. Right. You know, I mean, I have a vague idea of how, but you just over the years, with them having such a successful track record, you know that you have all the confidence in the world that when leadership says you're going to do this, it's going to happen. Do you know how refreshing it is to come to a place where everyone has that same perspective of their leadership and there's such a harmonious feeling here? There's not this underlying tension. That's another misconception, that we're in the Middle East and there's turmoil going on around us, but in Dubai it is so refreshing for me as an American. When I speak to everyone, the way everyone speaks about the leadership here, it's because there's this consensus amongst the residents: 85% are expats. We're not talking about just the Emirates, just the local born and bred. We're talking about the expats that have come here. The way they have this love and confidence that the leadership is out to make their life here the best, that's why there's the Quality of Life Initiative, that's why there are all these constant initiatives. For example, when you had the flooding, not only were you immediately able to recover from the flooding, but then there's a new initiative, a multi-billion dollar initiative placed right away to work on the sewage system. We've discussed before about how you handled COVID, but it's so refreshing. It's such a beautiful thing to be a part of. When I talk to people in America, yes, a huge part of it is investment, right? And like you just said, even if you don't come here, everything is digital. There's the RERA app right now on the Dubai Land Department where you can monitor the progression of your off-plan. There's Property Finder where you can find that resale property and make sure you're working with the right agents. It's interesting that you bring this up because it touches on several important points. But even for those who want to move here, and we've seen a pickup of people in America and Canada looking for maybe an exit strategy and a second passport, Dubai's Golden Visa program is so attractive. The quality of life of living here as a resident, not just investing but living here, is beautiful because of the safety, the harmony, and the tolerance. The good vibrations when you're here, the energy that you feel, the leadership, the confidence in the leadership, and the economic opportunities and business opportunities. I'll tell you what, stick around for another month, right? Because early December we have National Day. This is really one of those things I have watched evolve over the years very rapidly. That is perhaps around 15, 20 years ago, UAE National Day, which is the equivalent of the Fourth of July to us in the US, used to be celebrated a lot more by the local community or the Emiratis. You stick around for another month and you'll see that National Day: the sentiment is on par between the residents, or expats as we call them, who live here and the local Emiratis. We take that shared pride. The reason is being: so much of this marvel that is the UAE has been built hand in hand between the local Emirati population as well as the expats. Over the years, this is a natural evolution of any community. We do have that sense of shared ownership of this beautiful country. I love that perspective. It reminds me of something I had with Peter Corby, the sales director from Expo City on here on the podcast last week. I asked him separately off the podcast: you lived in Miami, do you actually love living in Dubai? How do you feel? Are you happy here? Are you happy working for Expo? I always ask everyone these questions. He said: I'm part of history. I'm part of history because when you talk about Expo City and the vision of the Sheikh, I'm like yeah, I actually in my small part feel that I am as well. Since I've been doing what I'm doing, I've seen more American eyes open. So many people from San Diego alone just visit because they said: well wait, if Gigi, this more liberal independent American woman loves Dubai, wait a minute. And now the investors on a greater level as well. This is such an important perspective that I wanted to highlight. I can understand how you feel and that's a great perspective to share. I will be here for the next month. So you know, let's really highlight a little bit of 2024's numbers and answer the question about what to expect for the rest of 2024 and beyond 2025. Of course, there are going to be people that say: well, are we topped out? Are we facing a bubble? We know it's not. The UBS Bubble Index: our prices are going to continue to rise. When I put my money in, I'm not coming in at high market and I'm going to take the opportunity for capital appreciation and rental returns. So how do you answer that? OK let me give you some numbers, right? I want to share this with you. Year-over-year, and I'm going to focus on ready properties. Obviously, I can share with you whatever questions you have on the off-plan market, which continues to be on fire. The last I checked, with new projects or off-plan, we're tracking one project launch every 18 hours. A lot of these projects are selling within less than 24 hours. Exactly. I don't know if that happens in any major city in the US. No. So let me give you the numbers: I'm going to tell you about the numbers we're seeing in particularly ready properties. 25% year-over-year growth so far this year, which is really significant. This is data up until a couple of days ago, end of October. 25% growth in ready property transaction value. Offline markets or new projects have been on fire here. We're seeing nearly 50% year-over-year transaction growth in the market. Keep in mind that we're coming on the back of already three years of double-digit year-over-year growth. Ready property transaction, okay, which is very important. I want to stress on ready because it's a very important indicator of owner-occupied, right? Primary residence buyers. It's probably one of the most important indicators wouldn't you say? 100%. Because what it communicates is it gives you a sense of stability, correct? I think there's that misconception. A lot of what caused previous volatilities in the real estate market in Dubai is speculative buying, right? Right. We're seeing so much less speculative buying. Well, one main reason is the 4% DLD registration fee that naturally makes it less compelling for people to buy and flip properties, right? Two is what we're about to talk about: ready property transactions. Ready property transactions are an important indicator because they show you primary residents, people buying a home to live in, which essentially has a more long-term stable view on the market. Year-over-year, as of January to October 24, we're seeing 25% increase or more than 25% increase in ready transaction value. Then we can compare that, for example, to Miami, which is pretty stable. I think it's 15, 16%? Yes, Miami. And Toronto is also a little bit less than that, right? I believe it's healthy as well. But then we look at New York, Chicago, Los Angeles, and because of the interest rates, the affordability, the economy, we've actually seen either stagnation or even a decrease. 100%. I'm going to talk about the interest rate factor and how I believe it's one of the key drivers supporting the market in Dubai. 25% year-over-year growth in ready property transaction value. Now, mortgage transaction value is up more than 40% year-over-year, right? Now what does all that mean? And again, who buys on a mortgage? Yes, investors do buy on a mortgage. But 93, 94% of the transactions we do at Mortgage Finder, okay, are for primary residents, okay? Right? Or people living. Increase, correct? So 25% increase in ready property transactions, 40% increase in mortgage property transactions. Now again what that means is you have more and more owner-occupied users, right? More end users. Three: the percentage of mortgage buyers, right, is up by 25%. Which means? What does that mean? Tell me. What it really means is in the past, it used to hover at around 35 to 40% of ready transaction buyers right now using a mortgage. Now it's closer and closer to 50%. In fact, in a lot of months we're crossing 50%. That again is a more natural, organic market behavior of people buying a property to live in, right now? These are incredibly healthy numbers. Now I'm going to give you a detailed a snapshot not only of the past and what we've done so far this year, but of where we are right now, okay? Remember the numbers that we look at at Mortgage Finder are leading indicators as opposed to lagging indicators. It's very important to note: why? Because the transactions that we're looking at, the mortgage applications that we're submitting today, are likely going to close anytime between December and January. So that shows you momentum moving late into the year and early into 2025. We're looking at 40% year-over-year growth again, or more. In fact, for Q4, right, with another healthy trajectory moving into Q1 2025. The trend continues up and to the right. Now I find all this mind-boggling at times, right? Honestly it is. Every now and then the professional hat we wear gets us to scrutinize and say: like when is this going to end? I'm not complaining, right. Naturally, this is all working out really well for us for sure. Yes. But one can't help but wonder: when is it going to end? Is this a bubble? Now, what we can talk about so that we don't have a subjective view, right? We like to look at factors or data or what specifically really has caused this continued growth in Dubai real estate market. One: today, and I promise we're going to talk about interest rates, okay? So rental yields. So in the city of Dubai, they're tracking between 6 and 7% on average. Those are long-term rental yields, correct? Higher for short-term in prime areas. In prime areas, yes. Be careful because short-term could go in different directions, right? But long-term, let's say stable rental yields, 6 to 7%, okay? Mortgage rates are sub 4% now. Can you think of any mature market worldwide or any major global city where you can borrow to buy a home at less than 4%? No, right? We have rates as low as 3.75% now in Dubai. Naturally, these rates are slightly higher, similar to the US, for international nonresident investment properties, et cetera, but mainstream mortgages are sub 4%. When rental yields are at 6 to 7%, well, that means you can be collecting more, right, than you are paying. Exactly. Your cost of ownership, yes, is significantly lower than your cost of renting. In fact, some investors are buying properties and capturing that arbitrage and saying: look, if I'm borrowing at 4%, correct, and I'm yielding 6, 7%, then my cash on cash investment is much better. That's what I'm appealing to. So absolutely yes. So you know, low interest rate environment, which is supported by a great deal of liquidity that we have in our markets, and this is a luxury that you don't have in many other markets around the world. All of this liquidity that we have and the healthy economic growth is enabling the banks to lend at such low rates, okay? Two: the big bad rental notice, right? I've been talking about this for a couple of years already. What's happening is rents are increasing 20, 30% year-over-year, right? Right. People finding themselves in that position again where they're saying: well, look, if I'm spending $100,000 on rent, I might as well go buy, right? Right. So that's been. With the rental notice, essentially what happens is it gets to a point where homeowners can give tenants a one-year notice because they want to sell the property, right? Then the tenant finds themselves in a reality of saying: if I want to go out and buy a comparable property, right, then it's going to be significantly more expensive. Three: real GDP growth, right? Again, I can't think of many other major global cities with GDP growth in the upper low, in the 3 to 5% range, right? Again, consistently, growth in GDP and economic value creation. Four: population growth. We talk about Dubai 2040 plan, yes, right? With population growth planned to double by 2040. We're now in 2024. Guess what, like I said earlier, you want to have faith in the city? Don't bet against it. They're going to make it happen. Yes. And so you know, how they make it happen? You look around you. We have an incredibly healthy environment, incredibly supportive regulators who are welcoming and inviting so many scale-ups, unicorns, startups. You have a buzzing emerging technology ecosystem. You have partnerships that are happening. If you look at the national AI agenda and Abu Dhabi collaborating with the US government and various big tech players, you know, the VMWares and Microsofts and Nvidias of the world. In fact, Microsoft is setting up an engineering hub in Abu Dhabi. I heard that, right? Yes. For somebody from the region, it makes me incredibly proud to see us now creating and working on building the future of technology. Even at the university, there are initiatives going on right now for the university. The AI campus, education, job growth, DFC. The whole plan on creating that really important financial center here in the region as well in Dubai. Even when I am helping guide and consult investors, I really look at projects and how they're in line with the Master 2040 plan because it's a no-risk, or at least as low risk as you can get. So by the way, a lot of the talk around the bubble, and this is the question that I get asked frequently: people say, we're going to have I don't know how many thousand tens of thousands of properties released next year, and I say: okay, our population is growing at a higher pace. So there is demand for all of these properties, correct? Yes. Even if every projected project were to be built on time, it still would not match the number of residents that are moving here. However, add to that how closely the developers work with the DLD to be strategic about the release of projects as well, to make sure there's always that happy imbalance, right? 100%. To ensure that the price is not so much that residents can't afford it, but that it's still really friendly for investors and also for infrastructure investments. I mean, how many major cities globally do you see invest as much in infrastructure as we do? We have new bridges popping up it seems every five minutes, right, that are providing that traffic relief? I know traffic has been a major topic in the city. It is, but when people complain, I usually look at them and I say: okay, would you rather take this or COVID? Yeah, right. I'm sorry. Nobody likes traffic, right? Right. But I always remind myself to say: you know what? I'd rather be stuck in traffic for 30 minutes than be stuck at home looking at empty roads. Well, it'll be resolved because if you look at the initiatives that are in place, the major announcements by RTA recently, and like you said, it's not just announcements, they're real. There's a bridge behind my house that just recently opened up a couple of days ago. Our driver is super excited. Now, I live in a villa, right? On a nice 7,000 foot plot, et cetera, which is not typical to urban living, right? Right. Usually, in most major global cities, for you to live in a single family home with a 7,000 foot plot, that means your drive to work is 45 minutes, correct? Right. I leave the house at 9. I get to the office at 8:55. So that's a seven, eight minute drive. Fantastic. Now with the new bridge, I mean. And then you look, for example, at what's going on with the infrastructure that's being built in Expo City and Dubai South and by Dubai Islands, that whole area with Dara. Yes, traffic: we have. We cannot say it's not an issue. It is an issue. That's what happens. But what I love about Dubai is that Dubai is always thinking ahead. They already know what's happening with the residents and the population. It's a plan, right? It's strategic. They're getting ahead of that whole situation with their planning of their infrastructure. And even the pods that are going to be coming soon and the flying taxis and all these different ways to help minimize traffic. I mean, if you look at, for example, Expo City, the entire city and infrastructure is a two-tier system with so many roads coming in and out to address traffic. You look at the new Palm Jebel Ali. They learned from Palm Jumeirah. Instead of one entry point to that whole master development, now they're going to be three entry points. So Dubai is always forward-thinking. There is a question that I wanted to ask you since Property Finder: you work and you're very agent-centric. Since you have been doing real estate here for 14 years or more, and you are quite well immersed in the real estate market, how do you answer the question: is it better for an investor to buy directly through the developer or to go through an agent? Look, and this is important for investors to understand, right? US investors are usually used to having to pay commissions to real estate brokers on purchase transactions, particularly for new properties or new projects, right? Agents over here are being compensated by developers, correct? Right, so they get their commissions from developers. What buyers essentially get by working with an agent is that extra layer of service, right? Not only at the search and discovery part, because search and discovery you can come to Property Finder. You can browse all of the new projects in town with insights and analytics and pictures and all of that. Right? We have a section on the platform that is called new projects. Right? Now that's new since the last time I've been here. It is new, right? But guess what that connects you to? In most cases, it connects you to real estate agents, right? Now the reason we connect you to real estate agents is because then the real estate agent will help you navigate the closing, the closing part of this, right? Not only closing the transaction but also in the future: tracking progress, following up with developers, managing the handover process. Potentially, if you want to take out a mortgage at the handover process, they could refer you to a mortgage operator like us. Also managing the property: if you want to turn it into a rental property and manage it, et cetera, et cetera. Having that person, again, for a US investor living overseas, even for a lot of the local buyers who live here in Dubai: you go to a developer, then the developer is going to offer you their product or their project. Whereas when you go with a real estate agent, funny enough, I had somebody who randomly came to me from the US or sent me a WhatsApp saying: I'm thinking about buying a property in Dubai. I brought, and I said go talk to Gigi, right? Because you are in a better position to support. And thank you for mentioning all those points. One other big thing is that these investors are building their portfolios, right? So it's not just about that one project that they're purchasing. Therefore, what I'm able to offer or trusted agents are able to offer is the strategic timing of when you are going to resell it and identifying what is the next project that you're going to purchase. You know, not all developers are made equally. Even within a development, not all units within that development are prime units. But of course, a developer is incentivized to sell all of their units. Having said that, I always urge buyers to do their own research as well and challenge the agent that they're working with, right? Because look, it should be. The relationship between homebuyers and agents should be a collaborative relationship, right? It isn't, it isn't so much like a doctor-patient relationship. I mean, frankly speaking, even my doctors I challenge. Yes, you still check them. Yeah. That's what's great about Dubai though, because it is a transparent real estate market. They can come to Property Finder and check this information. They can go to DLD. That's how to circle it all back: the tools are there, the transparency is there, the digitization is here to really make sure that buyers can make their due diligence and make well-informed strategic decisions. 100%. So thank you. Absolutely. I am so glad that I had you back on. I hope to continue to be able to do so every quarter as a check-in of what's been happening. Since you like you said, you have your finger on the pulse of mortgages. You're able to share, as you mentioned, the health of the trajectory of what's happening, at least a quarter if not more out. Thank you so very much for having me here. Thank you so much for joining us on this episode of The Dubai Connect podcast. Please make sure to like, subscribe, follow, and stay tuned for more.