In 2020 there was a slowdown in the growth of the real estate market in Dubai, but according to the founders of the new investment platform, new opportunities will appear next year in this area.
Residential property prices in 2020 dropped to almost the same level as building costs, which means that investors can buy it and make a large profit. However, with vaccine availability and economic recovery, prices are expected to rise in 2021.
Co-founders Rami Tabbara and Manar Mahmassani used their 15 years of experience in the Dubai real estate and financial markets to launch a digital platform for real estate investment.
“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 digital platform where 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 think 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 him, the minimum investment amount is 2,000 UAE dirhams.
The service creators are also proud that it meets all the transparency requirements, gaining access to a large amount of information:
“There are many shortcomings in real estate investment, because of this developers and brokers tend to mislead investors and force them to buy expensive real estate with a small profit margin,” Tabbara said.
If we talk about profit, then Stake generates it partially, 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 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. One of our leading investors is an American developer, so 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.