Investment Property in Dubai

A few years back,many investors would have thought that an orthodox country such as the UAE could be a lucrative real estate investment destination. But with a little foresight and intelligent alliances,the rulers of the UAE have transformed the oil-dependent Middle East country into a major tourist hub with huge investment opportunities being thrown open to the global real estate investors looking to buy property in Dubai.

Dubai is a dream destination as far as temporary or permanent visitors in the country are concerned. The Europeans just love the modern amenities readily available for cheaper prices than their home countries. The guarantee of quality life at highly affordable cost of living makes Dubai a real hot potato for the British real estate investors.

Property Market in UAE - Dubai

Dubai is on the move and some serious developmental projects are under way on a large scale to transform the fortunes of the country. Almost everyday,reputed international companies are exploring the means of setting up their shop in Dubai. This is attributed to some aggressive promotional and developmental strategies adopted by the government.

The Burj Tower,with 188 storeys,is set to be the highest building of the world housing the 7-star Al-Burj Hotel. The Burj Tower is the jewel in the crown as far as high-rise and skyscrapers are concerned. Dubai is planning to host more than 200 buildings to increase its population from present 1.3 million to 4 million by 2015.

The country as a whole has some enchanting sites to visit. From the sand dunes of great deserts to pristine beaches to rugged mountains to lush-green well-maintained parks to ancient villages to places of worship to swanky shopping malls,you name it and you have it in and around Dubai.

The country offers an open port with low import duties. That’s why duty-free shopping in Dubai is on a high-priority list for the locals as well as visitors in the country. It is impossible to find a woman who has not heard about the annual Dubai Jewellery Shopping Festival.

Many European families prefer Dubai as a second-home destination because they can easily find maids and helpers at a fraction of what it costs in Europe and America. Such facilities are common in Dubai due to a large migrant population from Asian countries,like India,Pakistan,and Bangladesh,who are looking for menial jobs with decent pay.

Even though the UAE is a Muslim country,Dubai is an epitome of multi-culturalism in the Sheikhdom. For long,it was dependent on the Petrodollars for perking up its economy. However,the recent interest in developing tourism and tourist-related activities in and around Dubai means the investors are flocking in their droves.

International Golf and Tennis tournaments have lifted the global profile of Dubai and it’s been increasingly seen as a hub of international activities,particularly in the Middle East. You can also indulge in plenty of aquatic adventures,such as scuba diving and snorkelling,on a vast Mediterranean coastline. And while,in Dubai,don’t miss out on exploring the Manhattan of the Middle East,the Abu Dhabi City!

Dubai Calling !

Seeing the growth potential of Dubai,the government has emersed itself in overdrive in attempt to attract high-end as well as low-end global real estate investors. For the high-end investors,there is Palm Island property which currently attracts international celebrities,like David Beckham,don’t be surprised if your sharing your neighbourhood with a top Hollywood or sporting celebrity!

Even if you are planning to buy property for rental purposes,there’s no place better than Dubai. The city is fast turning into a services hub,which generates immense demand for Studio Apartments as well as separate dwelling units for small and medium families.

Some of the other attractive features that’ll surely lure you to invest in Dubai property include -

No Capital Gains Tax

Immense capital appreciation (15% - 25% annually)

Simplified buying process

Freehold for foreign investors

World class entertainment and other facilities

Year-round sunshine

The price of Studio Apartments in Lakeside Development - IMPZ start from £49K,and other properties starting from as low as £23,000. Cheap apartments in Dubai are fast becoming a favourite of the astute property investor.

The Disneyland attraction in Dubai also contributes to a huge demand for Dubai property from just about every kind of investor.

The best part of investing in Dubai as an overseas investor is your status as a property owner. You will be a freehold owner of the Dubai property you purchase. To meaningfully make investment attractive in Dubai,the government has also relaxed several formalities and done away with rigorous procedures. It’s now much easier to invest in a high-end Dubai property with minimum help from a legally qualified professional. However,the language issue may compel you to hire a professional who can guide you accurately in realizing your Dubai real estate dreams.

Options Galore in Dubai Property

Dubai property scene is constantly under a state of flux. More and more people in Dubai property market are opting for their own roof over their heads,instead of renting property in Dubai. Overseas visitors are getting to experience the cosmopolitan culture here and are investing in Dubai property.

Why is Dubai property selling like hot cakes? Quality lifestyle is one reason. And secondly,there is an abundance of options in Dubai property! It offers anything from studio apartments and individual villas to town houses and condominiums.

A condominium or condo for short is a property type with individually owned units in a multi-unit development. In addition to these privately owned apartments,the common areas such as foyers,recreational areas and lawns are jointly owned by all the residents of the development. Dubai property market is flooded with condo options,more often condo hotels. Individual owners can put their unit to personal use or pool it with the hotel’s management team for rental. Condo hotels are one of the prominent Dubai property options available at present. They have close access to recreational facilities,theme parks,casinos,etc. These hotels have the potential to generate high rental yields for the owner in the Dubai property market. Rentals of up to 8 percent per year are guaranteed.

An independent apartment in Dubai property market can range between 500,000 to 12,000,000 AED*. A studio apartment is a bachelor apartment with one large hall which is used as a living room,dining room and bedroom all rolled in one. Even the kitchen is usually a part of this room and the apartment is complete with a smaller room as a bathroom. The minimum price of a studio apartment in Dubai property market is 275,000 AED. It can go up to 500,000 AED. At the same time,a studio apartment in Dubai can be rented for about 400 AED a day.

A villa is an upper class house which has its own compound. It is usually located in a countryside or sub-urban locality. The price of a villa starts at about 1,500,000 AED and can soar up to 20,000,000 AED in Dubai property market,depending upon the location and property area. Palm Islands,Dubai Land,Meadows and Arabian Ranches are some of the premium villa locations in the Dubai property matrix.

A townhouse is an independent house usually in the urban area. There can be a group of town houses in a community. Each town house is individually owned by the buyer who also owns the land on which the house has been built. Buying a town house property in Dubai provides the luxury of having access to swimming pools,golf courses,private beaches and lush gardens. Dubai property industry offers these at a starting price of around 900,000 AED.

Overseas investors,both individual and commercial,look upon Dubai property as a site to extend their investment portfolios with more promising returns than their respective home countries.

*AED: Emirati Dirham; 1 US Dollar = 3.67370 AED; 1 AED = Rs.11.10112

Property Buying Process in Dubai

Due to the wise planning by the Dubai leadership,the property buying process in Dubai has been incredibly lucrative. With development areas for the highest residential tower and largest mall in the world,Dubai is experiencing a booming real estate market. Owing to strong fundamental demographics,Dubai is enjoying a vibrant real estate market boom. In Dubai,real estate prices have risen due to high demand and supply shortages.

The Dubai government has managed this economic boom with a push-pull management. The Crown Prince relaxed foreign ownership regulations in the year 2002,thereby allowing for 100% foreign control of “freehold” property which could be sold,rented or leased. As a result of this move international investment has flowed into Dubai. Other offers like no capital gains tax in the UAE and no stamp duty on UAE real estate has all induced more real estate property investment in Dubai.

The Dubai Strategic Plan for 2015 is an ambitious plan that targets high GDP growth rates with an increasingly skilled workforce,through extensive investment in financial,construction and tourist sectors. While other regions in the world are experiencing credit crunches due to mismanagement,Dubai has a credit surplus and is an emerging international financial centre.

The UAE property market has options available for commercial properties,short-term rental properties and office spaces. It also has residential properties that include apartments,luxury villas and mixed-use gated communities. These are also waterfront properties,beach resorts and penthouses. The opportunity is awesome as many real estate developments have extensive waiting list and the Dubai rental property offers high yields of around 12 - 15% per annum.

Property Investment In Dubai, UAE

Payment schedules can range from increments of 10% up to 20%. It is at the discretion of the developer how they structure it

The benefit of buying off-plan is that re-sales command relatively high premiums therefore reducing any profit margin in the investment considerably.

Who Can Buy?

Any investor,overseas or resident,can purchase in Dubai’s luxury property developments.

Home Financing

If you are looking for home financing options in Dubai,most developers offer finance packages. However,Tamweel is certainly one of the best options. Tamweel offer a wide range of products for you to choose from. Tamweel finance properties that are ready to move into,as well as those that are under construction. They will even pre-approve your loan before you start looking so that you will know exactly what your budget is. In addition,Tamweel offer you the option of owning the property outright,or leasing it from them with an unconditional offer to own it at the end of the lease period - whatever suits you better. All of their products have been designed keeping your individual needs in view,especially the need for stability and peace of mind,and that is what makes us sure that they have a solution that is just right for you.

Payment Terms

In general,a deposit representing 10% of the buying price is required at the contract-signing stage for all new development properties. This is followed by what are known as stage payments that are made at regular intervals through to completion. Contact us for project-specific details.

Bank Accounts

Buyers do not need a local bank account to arrange purchases,though these can easily be arranged through our partners in Dubai.

Appreciation

Property prices in Dubai have experienced considerable growth,and are forecast to remain this way for some time. This can be clearly seen if comparing current prices with those of 6 months ago. Like all investments,however,property prices can go down as well as up.

To Buy on the Secondary Market or the Resale Market:

If during the construction stage of a property a second party wishes to purchase the property from the owner then the process is straight forward.
The buyer pays the owner an agreed sum which includes those payments the owner has already made to the developer and any premium applied by the owner.

Exchange of contracts with owner at the developers head office usually within two week period.

The developer will then charge a percentage of the original price of the property (typically between 2% to 7%) to reissue the PSA with a new name on it and update their title records. This must be done either in person or with the buyer’s authorised representative. The whole process takes a matter of minutes.
Contract re-issued in buyers name - there is no legal representation for either party or any stamp duty implications.

The buyer will then continue to pay the remaining instalments to the developer as laid out in the PSA.
Commission,typically 2 to 3% is paid to the agent.
The transfer fee is paid by the purchaser.

What exactly is freehold in Dubai?

Purchasing a freehold property in Dubai now means that you own the property forever or until you decide to sell it. You are allowed to pass this property to your family for example,and they enjoy the same level of ownership as you do.

Most important for investors,your resale rights are guaranteed,as is your freedom to rent out your property to a third party,though some restrictions apply to individual developments.

You should note that although these are freehold properties,some conditions on their owners apply,because they are “private community” developments. These conditions will restrict what owners can do with their properties,and oblige them to maintain their properties to certain standards,according to the themes and quality of the communities.

When buying an apartment,the nature of ownership is different from that of a villa,because an apartment is a unit in a building. These are normally classed as “common hold”. Sale agreements for apartments do,however,usually warrant effective full ownership of the unit,subject to restrictions applying to the building,such as renting out the unit,and making modifications.

Where can you buy freehold properties?

Most property developers in Dubai offer freehold,but so far most of the freehold developments have mostly been limited to the Sheikh Zayed Road,and the area of Jumeirah (including Palm Island). However,exceptions to this include the Arabian Ranches and Emaar Towers in downtown Diera. Other future developments include Nakheel’s International City project.

What about buying in other emirates?

So far,the UAE as a whole does not have laws regarding the sale of freehold property to non-GCC nationals. Each emirate makes its own property laws,as Dubai has done. Recently Abu Dhabi announced the availability of freehold,limited to “surface rights” for non-GCC nationals in the Al Raha beach area,outside the main city limits. Ras Al Khaimah,in the north,has created a similar development. The other emirates are expected to follow suit,but there have been no definitive announcements at the federal level yet.

Are property owners eligible for residence visas in the UAE?

Many developments give you the opportunity to gain a residency visa through purchase. Read about Procedures for obtaining a residence visa in our articles under Immigration.

Property Law

The freehold property market in Dubai really started in 1998 when the Dubai Marina project was launched. At that time there was no freehold property law,and villas were sold “leasehold”,on 99 year leases. In 2002 a decree was issued by the Dubai government granting freehold rights to non-GCC nationals (The GCC is the Gulf Cooperation Council,comprising Saudi Arabia,Kuwait,the UAE,Oman,Bahrain and Qatar.) This provided the impetus that has led to the size and dynamism of Dubai’s property market today.

Dubai Residency

The Government has stated that a special category of residence visa will be granted to people buying ‘foreigner’s’ properties. The visa will allow a purchaser to live,but not work in Dubai. The arrangements for granting,and the terms of the visa,are at this time unclear.

Only the Government of the UAE can grant these visas,not the developer or estate agent.