Interview with Ryan Mahoney, Managing Director, Better Homes the UAE’s foremost real...

Interview with Ryan Mahoney, Managing Director, Better Homes the UAE’s foremost real estate agency

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Ryan Mahoney, MD Better Homes Dubai

Ryan Mahoney is the Managing Director of Better Homes, one of the UAE’s most prominent real estate agencies that has been in operation in the region since 1986.

Better Homes has been through the thick and thin of the ever changing landscape of UAE’s property market, particularly in the Dubai market. This has earned Better Homes a solid reputation as well as given them an unprecedented operational know-how in the region.

We asked Ryan to share a few thoughts about the real estate scene in Dubai and the UAE at large with us, and he was kind enough to oblige.

1. How would you describe the state of Dubai’s residential property market at the moment?

The Dubai Real Estate market is currently very buoyant. We have seen tremendous growth in recent years and there are still so many great projects in the pipeline for investors and end users alike.

2. Having operated in Dubai’s real estate market for over 20 years, where do you think the market is headed over the next decade?

We still see a lot of potential for growth in this market. As the infrastructure of the city develops and the projects reach completion, Dubai will have even more to offer and with the population increasing, we expect demand to stay strong for some time to come. In addition, Dubai has positioned itself as a regional hub for businesses operating in the Middle East and India which will help sustain the market in the long-term.

3. Do you think Dubai’s property sector would feel the shocks of the current global credit crunch?

We haven’t felt any impact as yet and with the amount of current activity it doesn’t appear likely that we will be affected.

4. Who is buying property in Dubai? What is the typical profile of buyers?

There is such a wide mix of buyers in this market, we literally see investors from all over the world purchasing here.

5. Who is renting property in Dubai? What is the typical profile of renters?

There is no typical profile of renters here currently. With the current demand v supply imbalance on both the sales and leasing side and the large numbers of people we have moving to Dubai each month, we see a complete mix of people looking to rent.

6. Better homes has quite a dominant presence in the rental market in Dubai; with the current stock of properties available to rent in market at the moment and the current off plan projects in the pipeline, do you think Dubai would be facing an impending glut of properties?

People have been speculating on this for years and each year we are told this will be the year when the market reaches over supply but the reality is that it never happens! For sure there is a lot of product currently under construction but when you consider the massive undersupply we currently face and couple it with the growing population I think its unlikely that we will see an over supply anytime soon.

7. What areas would you put your money in?

Well this is a really tough question because there really are so many great projects out there at the moment. It all depends on your own individual needs and reason for purchase. For example, investor’s needs would differ from those of a family looking for a home. Currently, we see a high demand for waterfront properties as well as the Old Town and Business Bay developments and the completed villa communities such as Arabian Ranches, The Lakes and The Meadows always sell well as they have great amenities and a community feel.

8. Can you explain the current cap of 5% on rent increases?

Due to the high demand and lack of supply in the rental market in Dubai in recent years, tenants have faced some extremely high rental increases; so the Dubai Government intervened and implemented a rental cap. For 2008, this cap has been set at 5% meaning landlords can only increase rates by that amount.

9. What impact is it having on the local rental market?
The 5% rent cap has no doubt brought relief to tenants in Dubai.
From the point of view of Dubai’s landlords, it is understandable that some may feel aggrieved by the lowering of the cap which they feel affects their ability to maximize returns, but it is important to remember that in recent years they have achieved very high capital growth and, will continue to achieve, extremely good rental returns on their investment.
The cap will work as a short-term solution to the current rental situation but in the long-term, the fixing of rental rates is not recommended and should not be required. The nature of the real estate industry suggests that once the market supply meets demand the rental rates should even out naturally.

10. What would you advice? Buy off-plan or buy tenanted properties in the market? And why?

Again, this totally depends on individual circumstances and both have their pros and cons so I would really say go with whichever fits your needs and budget.

11. What are the current typical yields in Dubai?

This varies depending on location and type of product but currently an average of 7-10% is being achieved in the residential market.

12. What property investment strategies in Dubai seem to currently work with Better Homes’ customers/investors? Rental yields? Capital appreciation & flipping? Or a combination of both strategies?

I would say a combination of all the above mentioned strategies seem to work well; it again depends on investors’ needs and requirements.

13. With so much talk about Dubai, there is the tendency to forget that Dubai is one of seven states in the United Arab Emirates. What are the prospects of international property investment in the other Emirates?

I think there is some great potential in other areas and some exciting projects are coming up in the other emirates, particularly in Abu Dhabi and Ras al Khaimah.

14. Is Better Homes planning to move into the other Emirates?

Yes we are. We have an office in Sharjah and recently opened in Abu Dhabi and as the market requires it, we plan to increase our spread even further.

15. Would you still invest in Dubai?

Absolutely! I still see a lot of potential in this city.

Many thanks to Ryan for sharing his thoughts.

About Better Homes

better homes logoLeading the way in Dubai real estate for over 20 years, Better Homes is one of the UAE’s foremost real estate companies; selling, leasing and managing more properties than any other agency in the Gulf. Better Homes is one of the most respected names in the Middle East with a reputation for professional care and expertise.

From a one woman company, today Better Homes employs over 700 fully trained and certified real estate professionals. Its range of services has grown from leasing to sales, property management and consultancy. Its Project Sales & Marketing Division has forged exclusive agreements with several of the world’s top developers and landlords, giving it a distinct advantage in the variety and number of its real estate offerings.

Better Homes has pioneered many new concepts in the market. Amongst these, the concept of short-term rentals for business or vacation and an innovative online property search facility that offers real-time property listings by type, price and location. With a dynamic management team, solid reputation and innovative ideas, Better Homes continues to set the standards of professionalism in the real estate industry.