A Guide to Buying Property in Dubai
A handful of global cities offer real estate investment opportunities like Dubai. With rental yields ranging from five to 10 percent and as the MENA region’s most transparent real estate market, the emirate promises choice and competitive returns even in less-than-desirable market conditions.
Proving this point, the Dubai Land Department reported an 18 percent increase year-on-year in the value and volume of real estate transactions during the first nine months of 2018. According to analysts, this number is only set to rise in the coming months as the sector welcomes exciting new developments and growing interest from global investors.
The value of Dubai’s property market is not limited to a high RoI and attractive prices alone. The city’s state-of-the-art airport infrastructure makes it one of the best-connected hubs in the world, it is ranked as one of the safest places in the world to live, and with people from over 200 countries calling the place home, Dubai epitomises a global lifestyle like none other.
As with any big investment though due diligence is key. To find the right opportunity to invest in Dubai realty, one must keep a few critical points in mind.
Explore the city
1. Dubai offers something for every buyer.
Dubai is a city with varied perks and benefits, and it has much to offer for people from every walk of life. Getting to know how the city links its multitude of malls, museums, restaurants, water parks, beaches and everything in between is important. For property buyers, finding a location that meets all their lifestyle needs is a crucial first step in the process. Explore the various communities and developments across the city. each of which has its own unique character – and find the one that makes you feel at home or guarantees the best returns.
2. Decide what you want
Once you know where you want to be, you need to know what you want to live in.
According to Property Monitor more than 165,000 units are expected to come into the market by the end of 2019, of which 76 percent are apartments and up to 18 percent will be villas and townhouses. The type of property will have a significant impact on your budget, investment value and long-term gains.
To make the choice, weigh the pros and cons of apartment and villa living, the benefits of off-plan purchases and so on. Research the area to see if there are upcoming construction projects planned nearby. If so, consider the disruption caused by building works for months on end. If you are ready to wait, it may be possible to buy a home that is still under development, with considerable price benefits. For investors who want something right away, a property that is completed may be the better option.
3. Understand your rights
The Dubai Land Department’s rules and regulations are readily accessible on the government entity’s website. The Dubai Real Estate Legislation offers a good reference for property investment. For example, you do not need to be a citizen of the UAE or a resident of Dubai to purchase property in the emirate’s freehold market. This flexibility offered to non-resident investors allows for multiple property purchases in different areas. In other words, be sure to align your long-term goals with your rights while investing in Dubai (Note: ‘Freehold areas’ are designed to permit foreign residents, as well as non-residents, to buy property in Dubai).
4. Decide on an aesthetic
The design, style, and size of the properties in Dubai are constantly evolving, offering a range that is hard to find elsewhere. Decide on the right look for you, based on your intentions for the property. For example, do you plan to live there permanently, or raise a family there? Or, do you plan to rent it out? Are you looking for a place where you can run a business? While there are options to meet each of these requirements, setting a purpose for the property will help in choosing the appropriate area, as well as the size and budget.
5. Tour the property
If possible, explore the property yourself. If you have questions about the property, consult with your agent. They will be happy and able to answer your questions, let you know what to expect, and help you begin the process of making your purchase. Be prepared with a checklist while visiting the property. Consider factors like the proximity to shops and other amenities, the neighbourhood, connectivity to the metro network, regularity of taxis, ambient noise, and so on.
6. How to make an offer
If you plan to work directly with the seller, make sure you set an offer price, with some leeway for negotiation. You'll need to settle on an appropriate price for the building or home you want to invest in. When purchasing property in Dubai, the buyer and seller have to agree to the terms of the sale. Once the cost and sale date has been agreed upon, both parties will sign a Memorandum of Understanding (MOU). The buyer will also be required to pay an initial deposit and file several other forms of paperwork to complete your purchase. In certain cases, the buyer will also be expected to pay a real estate agent's commission fee, as well as the transfer fees for the sale.
7. Organise your finances
Some investors want to pay for a property in cash. This is often preferred as it simplifies the buying process and streamlines the entire experience. The alternative option of a mortgage is also widely available, based on eligibility. In Dubai, you will typically need a variety of legal documents, including a statement of income (or salary letter) from your employer. Include recent pay stubs to prove that you receive a regular income. You may need to provide recent bank statements, as well as credit card statements. This helps establish your credit history with the lender. Bring a copy of your passport, including the visa, for the purpose of verification. Additionally, residents will be expected to present their Emirates ID and proof of address when applying for a mortgage.
Rest assured, the regulatory environment in Dubai ensures that property buyers are protected throughout the investment process. With adequate customization and care, property ownership in the emirate can be a truly rewarding experience.