Despite apartment and villa sale prices in the UAE dropping steadily for two years, 70 per cent of the residents opt to rent rather than buy their home, found a recent survey by propertyfinder.ae, a top real estate portal.

The survey found that just 30 per cent of its UAE residents have bought property here, meaning the rest  are still renting, even though half have resided here for five years or more.

This is contrary to more developed and established parts of the world such as the UK, specifically England and Wales, where the figures are the exact opposite, with 64 per cent owning and only 36 per cent renting.

Year on year we are seeing expats staying longer in the UAE, and with rental yields across the Emirate ranging from 6 per cent to 10 per cent for apartments, most people understand the cost of renting for 3 to 5 years could easily cover the deposit. Yet, 70 per cent of our audience still rent.  So why are residents choosing to pay excessive rent amounts and not opting to buy instead?

The main reason sited of the renting community for being opposed to purchasing their homes was affordability concerns. With a combined 69 per cent answering that prices were too high, they couldn’t raise the necessary deposit or they were unable to qualify for the loan amount required to borrow.

The number of people staying in the country longer than planned is increasing. Fifty-four per cent ended staying longer than expected and property enquiries on the propertyfinder.ae are the highest they have been since 2014.

Lukman Hajje, propertyfinder Group CCO said: “It is clear that the want is there, but the high deposit requirements, the fees, the mortgage cap and stringent lending policies, are what’s stopping the market from maturing like its Western counterparts, and if we can overcome these points – I can really see a bright future for the UAE property transaction market.’’

UAE property prices are considerably cheaper than in other leading cities in the world and have come down considerably since the peak of the last cycle back in mid 2014. Expats are staying longer but due to high deposits required, many who'd like to buy are being forced to rent.

“The recent Brexit news will I’m sure mean that British expats will be even further enticed to stay put here in the UAE and will attract further of their fellow countrymen to the Emirates over the next five years to avoid the turmoil that many feel they will be subjected to,” Hajje added.- TradeArabia News Service