Yes, in 2020 there was a slowdown in the growth of the Dubai property market. But according to the founders of the new investment platform, next year there will be new opportunities in this area.
Residential property prices in 2020 have dropped almost to the level of production costs, which means that investors can buy it at great profit. However, with the introduction of vaccines and the recovery of the economy, prices are expected to rise in 2021.
Co-founders Rami Tabbara and Manar Mahmassani leveraged their 15 years of experience in the Dubai real estate and financial markets to launch a digital real estate investment platform.
“We think there will be more people in Dubai with the introduction of retirement and five-year visas. All of this will create a fantastic opportunity for people to enter the real estate market. If you go at the lows, you will make money at the highs,” Tabbara said.
The Stake service, which launched Monday at the FinTech Hive DIFC, provides potential real estate investors with a digitalized platform where they can view pre-checked real estate listings. They include a due diligence report, market report, financial projections, and property appraisal report for each project.
Regulated by the DFSA, Stake deals only with residential properties and includes resale properties that the founders believe provide the best return on investment.
The service also encourages investment in multiple properties. “Instead of forcing one investor to invest all his money in one unit, we suggest that he divides this capital into five or six different projects and start making a profit,” Tabbara said.
According to him, the minimum investment amount is 2,000 UAE dirhams.
The creators of the service are also proud of the fact that it meets all the requests for transparency by accessing a lot of information:
“There are many shortcomings in real estate investment, due to which developers and brokers tend to mislead investors and force them to buy high-value real estate with little profit,” Tabbara said.
If we talk about profit, then Stake generates it in part, receiving a small percentage in advance and on an ongoing basis. However, the main source of income appears after the investor has made money.
As a seed start-up, Stake raised $2 million from the founders themselves, their friends and family, London-based venture capital, and Madison Marquette, a leading US commercial real estate investment manager.
“The beauty of Dubai is that it works with many international investors. Obviously, part of our job is to target investors outside of it. Still, one of our leading investors is a US developer. Hence, we will start listing the property of this country on our platform,” Tabbara said.
“Another investor in our platform is a London based developer, so we will start investing in the UK,” he added.