Many people in the world own their own home. According to a variety of sources, home ownership rates in Europe, for example, vary from 53 per cent in Germany all the way up to 96 per cent in Romania. By comparison, the United States comes in at 65 per cent and India 86 per cent.
There are many reasons to own the place you live in; some people inherit or simply fall in love with it while others want to make their mark on the property by renovating. There are also those that like to put their money into something they can touch (bricks and mortar) and even more that think they can make money by buying at the bottom and selling at the top.
As a real estate agent my job is to sell those intangible factors that makes someone fall in love with a property but even more than that I like the fact buying makes financial sense. Personally I am more of a mathematical person; I come from an investor background and I like to sit down and go over the sums with my clients. Almost universally they are shocked at how a home is actually a yielding financial investment.
Those that have made money from property in the past nearly always say it is because the property went up in value. Naturally, one of the main reasons people like to buy investment property is to take advantage of these price moves.
But, like purchasing shares on the stock market, many buyers do not realise that the investment will actually bring in more consistent yields from the dividend than the price increase. To benefit from a price increase you need to be a stock picker (be able to know which way the market will go), but to benefit from the dividends you just need to hold it.
An important thing to note is that it almost always makes sense to buy the house you live in, even in average market. Why? Because if you take everything into account, even if your property does not appreciate in value by one dirham, it could almost halve your rent.
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Why every long-term expat should buy a property in the UAE
Should UAE residents focus on retirement or paying down their mortgage?
The expensive bills you can now pay monthly in the UAE
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Here is an example of a one-bedroom apartment on sale in Abu Dhabi for Dh1 million, renting for around Dh70,000 per year with service charges of Dg10,000. A 6 per cent net return on property in the UAE is not that hard to find, even across villas and larger apartments.
I will assume a buyer with a 25 per cent deposit of Dh250,000 has the remaining Dh750,000 financed at 4 per cent over 25 years. So how will buying almost halve your rent?
Your first saving is when you consider your rent against what your bank repayments would be. It is a simple calculation: the rent on this particular unit is Dh70,000 per year if you are a tenant. If you buy it your finance repayments would be only Dh48,000 per year. As you are an owner you will have to pay an extra Dh10,000 in service charges making Dh58,000 in total, a saving of Dh12,000 per year, effectively a 17 per cent reduction on your rent.
This is the bare difference between being a tenant and an owner. While 17 per cent is nice, it is not half your rent, so how do you get that extra bit?
If you own your own property, then in the first year about one third (or Dh18,000 in our example) of your finance payments to the bank goes to paying off the principal of your loan (the other two thirds or Dh30,000 is interest payments). You can search for a mortgage amortisation schedule online and put in the numbers to see. This is money essentially going into your pocket as it is taken off the amount you owe the bank, so when you sell the unit, even at what you bought it for, you get to keep this.
So to recap, instead of paying Dh70,000 in rent - if you buy you pay Dh48,000 in finance charges and Dh10,000 in service charges, a total of Dh58,000. You then get a credit of Dh18,000 by reducing your loan amount by that amount, which is realised upon sale. So instead of outgoings of Dh70,000 you are now only losing (after the credit for the loan principal repayment) Dh40,000 - almost half the amount of your rent.
While you may fear that if you buy today then tomorrow you will have lost money on your investment - the wonderful thing about property is you only gain or lose on the value when you actually sell it. And if it is making you money, why sell it? If you do then make sure you control when you sell, such as using property management if you leave the country.
Ben Crompton is the managing director of Crompton Partners Estate Agents
The rules on fostering in the UAE
A foster couple or family must:
- be Muslim, Emirati and be residing in the UAE
- not be younger than 25 years old
- not have been convicted of offences or crimes involving moral turpitude
- be free of infectious diseases or psychological and mental disorders
- have the ability to support its members and the foster child financially
- undertake to treat and raise the child in a proper manner and take care of his or her health and well-being
- A single, divorced or widowed Muslim Emirati female, residing in the UAE may apply to foster a child if she is at least 30 years old and able to support the child financially
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
Russia's Muslim Heartlands
Dominic Rubin, Oxford
RESULTS
Light Flyweight (48kg): Alua Balkibekova (KAZ) beat Gulasal Sultonalieva (UZB) by points 4-1.
Flyweight (51kg): Nazym Kyzaibay (KAZ) beat Mary Kom (IND) 3-2.
Bantamweight (54kg): Dina Zholaman (KAZ) beat Sitora Shogdarova (UZB) 3-2.
Featherweight (57kg): Sitora Turdibekova (UZB) beat Vladislava Kukhta (KAZ) 5-0.
Lightweight (60kg): Rimma Volossenko (KAZ) beat Huswatun Hasanah (INA) KO round-1.
Light Welterweight (64kg): Milana Safronova (KAZ) beat Lalbuatsaihi (IND) 3-2.
Welterweight (69kg): Valentina Khalzova (KAZ) beat Navbakhor Khamidova (UZB) 5-0
Middleweight (75kg): Pooja Rani (IND) beat Mavluda Movlonova (UZB) 5-0.
Light Heavyweight (81kg): Farida Sholtay (KAZ) beat Ruzmetova Sokhiba (UZB) 5-0.
Heavyweight (81 kg): Lazzat Kungeibayeva (KAZ) beat Anupama (IND) 3-2.
How to help
Send “thenational” to the following numbers or call the hotline on: 0502955999
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The National's picks
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What are NFTs?
Are non-fungible tokens a currency, asset, or a licensing instrument? Arnab Das, global market strategist EMEA at Invesco, says they are mix of all of three.
You can buy, hold and use NFTs just like US dollars and Bitcoins. “They can appreciate in value and even produce cash flows.”
However, while money is fungible, NFTs are not. “One Bitcoin, dollar, euro or dirham is largely indistinguishable from the next. Nothing ties a dollar bill to a particular owner, for example. Nor does it tie you to to any goods, services or assets you bought with that currency. In contrast, NFTs confer specific ownership,” Mr Das says.
This makes NFTs closer to a piece of intellectual property such as a work of art or licence, as you can claim royalties or profit by exchanging it at a higher value later, Mr Das says. “They could provide a sustainable income stream.”
This income will depend on future demand and use, which makes NFTs difficult to value. “However, there is a credible use case for many forms of intellectual property, notably art, songs, videos,” Mr Das says.
THE SPECS
Engine: 6.75-litre twin-turbocharged V12 petrol engine
Power: 420kW
Torque: 780Nm
Transmission: 8-speed automatic
Price: From Dh1,350,000
On sale: Available for preorder now
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
MATCH INFO
Uefa Champions League semi-final, second leg result:
Ajax 2-3 Tottenham
Tottenham advance on away goals rule after tie ends 3-3 on aggregate
Final: June 1, Madrid
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Captain Marvel
Director: Anna Boden, Ryan Fleck
Starring: Brie Larson, Samuel L Jackson, Jude Law, Ben Mendelsohn
4/5 stars
Our legal consultant
Name: Dr Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
Guide to intelligent investing
Investing success often hinges on discipline and perspective. As markets fluctuate, remember these guiding principles:
- Stay invested: Time in the market, not timing the market, is critical to long-term gains.
- Rational thinking: Breathe and avoid emotional decision-making; let logic and planning guide your actions.
- Strategic patience: Understand why you’re investing and allow time for your strategies to unfold.
SPECS
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WHAT IS A BLACK HOLE?
1. Black holes are objects whose gravity is so strong not even light can escape their pull
2. They can be created when massive stars collapse under their own weight
3. Large black holes can also be formed when smaller ones collide and merge
4. The biggest black holes lurk at the centre of many galaxies, including our own
5. Astronomers believe that when the universe was very young, black holes affected how galaxies formed
Tips for taking the metro
- set out well ahead of time
- make sure you have at least Dh15 on you Nol card, as there could be big queues for top-up machines
- enter the right cabin. The train may be too busy to move between carriages once you're on
- don't carry too much luggage and tuck it under a seat to make room for fellow passengers
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
UAE currency: the story behind the money in your pockets
'The Lost Daughter'
Director: Maggie Gyllenhaal
Starring: Olivia Colman, Jessie Buckley, Dakota Johnson
Rating: 4/5
MATCH INFO
Inter Milan 2 (Vecino 65', Barella 83')
Verona 1 (Verre 19' pen)
Straightforward ways to reduce sugar in your family's diet
- Ban fruit juice and sodas
- Eat a hearty breakfast that contains fats and wholegrains, such as peanut butter on multigrain toast or full-fat plain yoghurt with whole fruit and nuts, to avoid the need for a 10am snack
- Give young children plain yoghurt with whole fruits mashed into it
- Reduce the number of cakes, biscuits and sweets. Reserve them for a treat
- Don’t eat dessert every day
- Make your own smoothies. Always use the whole fruit to maintain the benefit of its fibre content and don’t add any sweeteners
- Always go for natural whole foods over processed, packaged foods. Ask yourself would your grandmother have eaten it?
- Read food labels if you really do feel the need to buy processed food
- Eat everything in moderation
COMPANY%20PROFILE
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A MINECRAFT MOVIE
Director: Jared Hess
Starring: Jack Black, Jennifer Coolidge, Jason Momoa
Rating: 3/5
Uefa Nations League: How it Works
The Uefa Nations League, introduced last year, has reached its final stage, to be played over five days in northern Portugal. The format of its closing tournament is compact, spread over two semi-finals, with the first, Portugal versus Switzerland in Porto on Wednesday evening, and the second, England against the Netherlands, in Guimaraes, on Thursday.
The winners of each semi will then meet at Porto’s Dragao stadium on Sunday, with the losing semi-finalists contesting a third-place play-off in Guimaraes earlier that day.
Qualifying for the final stage was via League A of the inaugural Nations League, in which the top 12 European countries according to Uefa's co-efficient seeding system were divided into four groups, the teams playing each other twice between September and November. Portugal, who finished above Italy and Poland, successfully bid to host the finals.
Anghami
Started: December 2011
Co-founders: Elie Habib, Eddy Maroun
Based: Beirut and Dubai
Sector: Entertainment
Size: 85 employees
Stage: Series C
Investors: MEVP, du, Mobily, MBC, Samena Capital
Famous left-handers
- Marie Curie
- Jimi Hendrix
- Leonardo Di Vinci
- David Bowie
- Paul McCartney
- Albert Einstein
- Jack the Ripper
- Barack Obama
- Helen Keller
- Joan of Arc
match info
Southampton 2 (Ings 32' & pen 89') Tottenham Hotspur 5 (Son 45', 47', 64', & 73', Kane 82')
Man of the match Son Heung-min (Tottenham)
