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Secrets to managing sky rocketing expenses in UAE

2015-07-19 03:22:36

With rising inflation and still elevated rentals, expats in the UAE find it hard to save.

Los Angeles: Rayni and Branden Williams spent months lining up a director, cast and crew for their “lifestyle film”.

The plot line: A husband takes off for a business trip in his Corvette, leaving his wife to invite friends to hang out in their wine room, gym, massage space, movie theatre and infinity-edge pool overlooking the city.

Towers of Dubai Marina with the foreground of Dubai International Marine Club (DIMC). Ratings agency Standard and Poor’sreckons that Dubai’s residential property prices are likely to fall 10 to 20 per cent this year.
 

Industry experts point to limited softening of rents, and the second quarter is seeing a decline of 2 per cent compared with the first. Analysts point out that more is expected.

But much of the softening that has happened to date has been at the premium end of the residential space. Personal finance experts say there are other ways to curtail additional expenses on housing.

“The most important thing here is to save on commission cost. Tenants can contact the developer or owner of the house directly to avoid paying commission to an agent,” Preeti Harrison Bhambri, founder of personal finance portal MoneyCamel.com told Gulf News.

Bhambri also said that one should also check if the maintenance cost is included in the rent. “Good houses that come with a maintenance contract can help you save much,” she added.

Buying property

One could also look at rental values and compare that with a monthly instalment if an expat plans to buy property here.

“In that case, compare mortgage costs and find the best deal from banks. On a good mortgage deal, you can save potentially up to Dh50,000 on interest cost, processing fee and repayment fee,” Bhambri said.

Meanwhile, ratings agency Standard and Poor’s reckons that Dubai’s residential property prices are likely to fall 10 to 20 per cent this year because of subdued demand, slower economic activity and downbeat investor sentiment.

Greater supply of new residential units will also dampen prices. S&P cited forecasts from property analysts REIDIN that 20,170 new units would be delivered in 2015, nearly double the annual average of 11,600 over the preceding three years.

The real estate sector in Dubai has been among the most volatile globally over the past decade, swinging from boom to bust to boom again.

Prices have recovered to within about a fifth of their peak values as of January, having fallen by more than half from their 2008 highs. They have since weakened again.

Dubai’s property market crash led to a debt crisis, but now property developers, many of them state-linked, are better placed to withstand market shocks, S&P said.

Interest on loans

One can also save a lot of money on credit card bills or interest on loans by regularly checking the current interest rates, and checking them with the one at which the loan was booked.

“With zero balance transfer offer, you can save a lot by simply switching your loans and cards to another bank,” Bhambri said.

Analysts also advise that people move away from high interest rate products such as credit cards to low interest products such as home or personal loans. This could reduce interest cost payments by 60 per cent.

One can also save on car cost by buying a vehicle during Ramadan or Eid. Ramadan is a time for car promotions in UAE — when Car dealers and manufacturers offer discounts or value added benefits that can easily save you up to Dh10,000. One can also consider buying a used car, which can provide a discount of 20 per cent on the price tag.

School fees

Paying school fees early and on an annual basis also helps in saving a lot of money.

“One can get a 4 per cent discount on the fees when you pay it annually. When you use a credit card to pay the entire year’s fee, you can pay it back to the Bank in monthly instalments at 0 per cent interest. You also get reward points on the Credit Card that can be worth 5 per cent of the total fee. Apart from tuition fee, the bus fee is also quite high. A common way to save on bus fee is car pool,” Bhambri said.

Bhambri says one can save on the flight and insurance cost and also get discounts on hotels.

“Popular airlines like Emirates, Etihad, BA and Qatar Airways often have sales, so one can buy air tickets whenever there is a sale on. One can also save on hotel prices when you book online with websites like lastminute.com and booking.com,” she said.