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Reasonable price, accessibility, luxurious amenities and other incentives are driving the real estate market in Ras Al Khaimah. Investors and real estate businesses are heading north, quick to sense an opportunity.
Adam Price, managing director of Select Property, lays it out well when he says, “Affordability is the key driving factor for real estate growth in RAK; property is fantastic value for money from both a rental and buying perspective when compared to Dubai and other neighbouring emirates.”
Located just 45 minutes from the world’s busiest airport in Dubai, and with the emirate’s own airport set for more expansion in the coming years, the accessibility to foreign travellers is of huge appeal, adds Price.
Expectedly, it is not only the international tourists and investors, but also those from other parts of the UAE that are driving the real estate market in RAK for its value-for-money luxury and leisure. According to Mat Green, head of research and consulting at CBRE Middle East, “It has also emerged as a tangible second home and holiday home market.”
Real estate in RAK has also received a boost from the way developers are aggressively wooing clients with extended payment plans, small down payments and rent-to-own option. As Barry Ebrahimy, head of commercial at Al Hamra Real Estate Development, puts it, “Families can book a quality home with 5 per cent down payment and pay for the property over five years while living in their homes.
“We are also offering a rent-to-own option for these customers who wish to live in the property, while knowing that they can convert the rental payments they have made towards their property purchase.”
Another factor that drives real estate business in RAK is the determined steps that it has taken to position its business to a wide variety of specific needs of the visitors.
Haitham Mattar, CEO of Ras Al Khaimah Tourism Development Authority (RAKTDA), points to just that saying, “Whether you are a beach-seeker, active adventurer or wellness seeker, the emirate will offer you diverse and exciting new products coming online later this year — specifically in our adventure tourism playground that is Jebel Jais, the highest peak in the UAE — we are optimistic of registering continued growth from all key markets for the remainder of the year and beyond, providing added reason for further hospitality investment.”
Now is the time to invest
RAK boasts a business-friendly environment and cost competitiveness, which assures the investors a very healthy return on investment. Cost of land is comparatively lower than other emirates, which is a big boon to real estate business.
Most industry experts are very positive in terms of returns for the investors. John Stevens, managing director of Asteco, highlights that Al Hamra reported yields of 7-8 per cent per year on town houses and villas and 8-9 per cent on smaller apartments. Price predicts an 8-10 per cent return on beachfront property like Pacific. Ebrahimy, for his part, puts the returns in the range of 6-10 per cent depending on the size and purchase price of the property.
What industry watchers are keenly keeping a tab on is the handover time, the profile of the developers, the actual finalisation of sale of the residential, commercial and office complex, and the occupancy of the hotel rooms to chart out the trajectory of investment safety and returns.
They find that the development in the emirate is taking place at brisk pace and yet adequately phased to give good returns. “The performance of the real estate sector in RAK has been steady and consistent,” says Price, adding that there was an 82 per cent increase in sale in the second quarter over the first quarter.
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