In 2020, there was a deceleration in the growth of the Dubai real estate market. But, according to the founders of a new investment platform, new opportunities will appear in this area next year.
Residential property prices in 2020 dropped almost similar to those of production costs, meaning that investors could buy them at a large profit. But with the impending economic recovery following the pandemic, prices are expected to rise in 2021.
Co-founders Rami Tabbara and Manar Mahmassani used their 15-year 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 the retirement age and five-year visas. All 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, launched on Monday at the FinTech Hive DIFC, provides potential real estate investors with a digitalized platform on which they can view pre-verified real estate listings. They include a due diligence report, market report, financial projections, and a property valuation report for each project.
Regulated by the DFSA, Stake deals only with residential real estate and includes resale properties that the founders believe provide the best return on investment.
The service also encourages investment in various properties. “Instead of forcing one investor to put all the money into one unit, we suggest that he divides this capital into five or six different projects and start making a profit,” Tabbara said.
According to Tabbara, the minimum recommended investment amount is 2,000 UAE dirhams.
The service creators are also proud that the service meets all the transparency requirements for gaining access to a large amount of information:
“There are many shortcomings in real estate investment, because of which developers and brokers tend to mislead investors and force them to buy expensive real estate with a small profit,” Tabbara said.
If we talk about profit, then Stake does take a small commission, calculated on percentage, in advance. However, the main source of income appears after the investor has made money.
As an initial startup, 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. However, one of our leading investors is an American 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.