Back in May we posted an article about the Ajman property market and how things are heating up in this smallest of the seven UAE emirates. As it turns out, our hunch was correct. Ajman has since heated up considerably and with neighboring Dubai becoming more and more expensive and unaffordable for many, Ajman has been the emirate of choice for many investors and developers as of late.
Therefore we will cover the Ajman property market over a three part post series to give you information on investor strategies, property prices, infrastructure, the newly reformed Ajman property law and where all the action happens right now.
Once our series is complete, you should have a fair estimate of whether this small emirate is the place for you to spend your investor dollars or not.
Ajman – the heat is on
Right now, the Ajman market is booming after gradually climbing three to five percent per month over the past two years. In 2008 alone, Ajman property owners have seen appreciation of 40 percent.
Despite this sizzle, the secondary property market has still not taken off in the emirate. This is mostly due to the fact that a lot of developments are still being built. The Ajman government is also investing a considerable amount of dollars into renewing the aged infrastructure to keep pace with all the newly invested developments.
With a maturing market, the government is also set to improve regulations for developers to ensure investors are protected against bankruptcies. New developers have to have enough venture capital and be familiar with the market to be approved. Smaller developers have undermined the big companies in recent years which caused some aggravation and an unstable market as prices per SQ. FT were all over the place.
Currently they range anywhere from Dh400 per sq ft. to Dh650 per sq ft. But big player Developer Chapal is already planning to increase those prices after Ramadan to around Dh700 to Dh750 per sq ft.
This gives investors a two month (and a bit) window in which they can cash in even more, before those prices are being raised.
What to buy?
As far as property is concerned, right now, studios are on fire. They are amongst the fastest moving properties in Ajman followed closely by 1 Bed room apartments. Many small families prefer to live in these smaller properties because escalating rents make it challenging to finance accommodation.
Currently, the return on investment on studio buys is around 50 to 60 percent per year.
To buy or not Dubai?
Many Ajman investors work in Dubai. They chose to buy in Ajman because of Dubai’s exuberant market prices and the close proximity to Dubai makes it a cinch to travel to and from work. This is perhaps the biggest reason why Ajman has flourished so much over the last two years.
As the Dubai market was heating up, smart investors were looking close-by to save on cost and discovered Ajman in the process.
If you are interested in the Ajman market, please keep an eye out for our next installment in this series. We will cover the Ajman property law and how the law has recently changed to benefit investors not so long ago.
One thing is for sure. This little emirate of 100,000 is fast expanding with big hopes and plans. Demand for residential towers as well as commercial infrastructure and we have no doubt that right now, there is money to be made in Ajman.