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From Arabian Business  http://www.arabianbusiness.com/

Currency prices vs Property prices: Why now might be a good time for UAE expats to sell

By Neel Gondhia, 23 February 2015

Villa for sale in the UAE

Villa for sale in the UAE

With over 100 nationalities living and working in the UAE and billions of dollars being remitted on a yearly basis it comes as no surprise that many expats are rubbing their hands at the strength of the US dollar (USD) and, therefore, the UAE dirham (AED) which is pegged to it.

What must not be taken for granted however is just how long the current highs we are witnessing will be on offer. With low oil prices, the delaying of the inevitable Greek exit from the euro and many other factors coming into play over the next few months we will see some ‘normality’ return to the currency markets, resulting in a bearish run of the USD against all the major currencies. This has already been demonstrated with the USD losing around 2 percent to the British sterling (GBP) since mid-January.

That being said, it does not necessarily mean bad news for expats in the region. Regulated foreign exchange brokers are able to secure exchange rates for up to 2 years in advance, usually with a 10 percent deposit of the amount being secured. Banks and high street exchanges don’t generally offer this. Therefore, if you are an expat with regular obligations in your home currency you can fix a rate which enables you to take advantage of the current situation without putting an unnecessary strain on your finances.

A typical case in example would be a client that secured the AED/EUR rate for the next two years. Should the euro return to the levels seen in June last year said client will be 18 percent better off than his expat colleagues. The same goes for companies dealing with overseas suppliers or investors purchasing abroad. The savvy chief finance officer or investor will realise that by taking advantage of the tools on offer they will not only increase profitability but when offloading said investment/asset they will also gain a higher return on investment. Savvy or not, small or large: whatever the exposure now would be the time to look at protecting yourself against movements against you in the future.

 

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