Dubai hit a 13-year high in May regarding the number of people investing in properties. Due to the recent increase in investors, Dubai will see a significant increase in real estate prices. The real estate market is expected to hit AED 300 billion by the end of 2023. The sale of properties in Dubai has seen a growth of 75% in 2022. While Dubai moves towards a sustainable future and a great city to invest in, here are a few tips you need to remember before and after property investment in Dubai.
Is there a Rising Demand for Homes in Dubai?
Yes, more people are looking to buy a house in Dubai. There has been a 12% increase in property sales in Dubai in the first quarter of 2023 compared to the same period in 2022. This is due to several factors like the solid economic performance of Dubai, low-interest rates in the UAE, the increasing number of ex-pats living in Dubai and the growing demand for luxury homes in Dubai. Buying a house in Dubai can be a wise investment. The city has a strong economy, a low crime rate, and a high quality of life. Dubai is an excellent option if you are looking for a place to live, work, and raise a family.
Why is There An Increase in Demand for Buying a House in Dubai?
One of the main reasons people invest in Dubai is the city’s healthy economy. Dubai’s economy is growing rapidly, attracting investors from all over the world. The city is also home to several multinational corporations, which provide job security for residents. Dubai has a very low tax rate, which makes it an attractive place to live and work. There is no income tax, no corporate tax, and no capital gains tax. Dubai offers a high quality of life, with excellent healthcare, education, and transportation systems. The city is also home to various restaurants, bars, and nightclubs, making it an excellent place for people who enjoy a cosmopolitan lifestyle.
Property investment in Dubai is booming, and many people are buying properties in the city as an investment. prices of Property investment have been rising steadily in recent years, and there is no sign of this trend slowing down. If you are considering buying a house in Dubai, you should keep a few things in mind. First, the cost of living in Dubai is high, so you will need to make sure you can afford the monthly mortgage payments. Second, the property market in Dubai is very competitive, so you will need to act quickly if you find a property you like. Ensure you understand the local laws and regulations before property investment in Dubai.
Should I Buy or Rent in Dubai?
The cost of buying a house in Dubai is significantly higher than the cost of renting. However, you may save money over time by buying a home, as you will not have to pay rent. Renting gives you more flexibility than buying a house. You can move more efficiently if your needs change.
If you buy a house, you will be tied to that property for longer. Buying a house in Dubai could be a good option if you are looking for an investment. Property prices in Dubai have been rising steadily in recent years, and there is no sign of this trend slowing down.
However, there is always the risk that property prices could fall, so you should only invest in property if you are comfortable with the risk. There are no property taxes in Dubai, so you will not have to pay any taxes on the value of your property. However, you will need to pay annual service fees to the management company of your building.
What Kinds of Properties are People Planning to Buy in Dubai?
According to a recent report, Apartments are the most sought-after property category for investors and buyers in Dubai. Apartments are well-liked for various reasons, including accessibility, affordability, and convenience. Apartments often cost less than villas or townhouses, and they provide a range of appealing amenities and features, including gyms, swimming pools, and security.
Apartments are convenient for people who work and reside in Dubai because they are frequently close to shopping, dining, and public transportation. Finally, investors and buyers have many options because flats / Apartments are readily available in Dubai.
What is the List of Top High ROI Locations to Buy a House in Dubai?
Some areas offer a high return on property investment in Dubai. These areas have luxury apartments and all the important amenities required by residents. Dubai Marina and International City are two such locations.
- Dubai Marina: Dubai Marina is one of the fastest-growing neighbourhoods in the world, offering a stunning view of the Arabian Gulf. The properties in the area are in high demand, especially residential and commercial. Its popularity stems from its modern infrastructure, luxurious properties and availability of a wide range of amenities such as shopping malls, hypermarkets, restaurants and other recreational facilities. Marina has a strong rental yield capacity, making it a go-to investment hub. Since the community is so well-developed, it has seen significant capital appreciation. While the real estate market often fluctuates, the Dubai government’s initiatives and vision to develop the area. Dubai Marina has freehold properties, making it an attractive investment region to non-UAE residents.
- International City: International City in Dubai has affordable properties compared to other areas in Dubai. The area has a strong rental market, attracting a diverse population of residents and renters. International City is located near major business hubs and transportation networks. The area has well-planned roads, great amenities, medical facilities and educational institutions. International City is home to people from several nations. The diversity attracts residents and tourists, contributing to a vibrant and multicultural community. Like Dubai Marina, International City has several freehold properties and the prospect of high capital appreciation.
What are Some High Demand Areas for Buying a Home in Dubai?
A few of the most in-demand areas for buying a house or property investment in Dubai are mentioned below.
- Downtown Dubai: Known for its iconic Burj Khalifa and Dubai mall, Downtown Dubai is a vibrant district offering luxury residential apartments, commercial spaces, and entertainment options. Properties here often command high prices due to the prestigious location.
- Dubai Marina: Situated along a stunning waterfront, Dubai Marina is a popular area for buying apartments and penthouses. It offers a modern lifestyle with various dining, shopping, and recreational facilities.
- Palm Jumeirah: An artificial island shaped like a Palm tree, Palm Jumeirah is a luxury destination known for its exclusive villas and high-end waterfront apartments. It offers a beachfront lifestyle and breath-taking views.
- Jumeirah Beach Residence (JBR): Located along the coastline, JBR is a vibrant community known for its beachfront apartments, restaurants, cafes, and recreational activities. It is a popular choice for those seeking a lively beachfront lifestyle.
- Emirates Hills: Considered one of Dubai’s most prestigious gated communities, Emirates Hills features luxury villas set around a beautifully landscaped golf course. It offers privacy, exclusivity, and a serene living environment.
- Arabian Ranches: A family-friendly community, Arabian Ranches offers a range of villas and townhouses surrounded by lush greenery. It has amenities such as schools, parks, and a golf course.
- Jumeirah Village Circle (JVC): JVC is a rapidly developing community offering affordable apartments and townhouses. It provides a suburban atmosphere with parks, sports facilities, and retail options.
- Dubai Sports City: Designed for sports enthusiasts, Dubai Sports City offers a mix of apartments and villas with sports facilities, stadiums, and academies. It appeals to those interested in an active lifestyle.
Where is a Solid Investment Area?
Several factors come into play when considering a solid investment area in Dubai. It’s essential to analyse various aspects such as location, infrastructure, demand-supply dynamics, market trends, and potential for future growth. While the real estate market is subject to fluctuations, certain areas in Dubai have historically shown promising investment potential. One such area that has gained considerable attention is Dubai South. Dubai World Central or Dubai South, is a master-planned community close to the Al-Maktoum International Airport and the Expo 2020 site. Due to several circumstances, this region has emerged as a desirable investment location.
The development plan for Dubai South is centred around creating a sustainable and integrated community with various residential, commercial, and recreational activities. Apartments, townhomes, and villas are among the inexpensive housing alternatives available in the neighbourhood, serving various market groups. The community is made more liveable overall by the presence of educational institutions, healthcare services, and retail centres, drawing both residents and investors.
Dubai South has benefited from significant government assistance and investment. The construction of Dubai South is overseen by the Dubai Aviation City Corporation, a government organisation that also ensures that top-notch infrastructure and legal frameworks are put in place. Investors are encouraged by this dedication to growth and governance, which also supports the region’s long-term viability.
What are the Documents Required For Property Investment in Dubai?
The documents required for property investment in Dubai vary depending on the type of property and the buyer’s nationality. However, some of the most common documents required include:
- Emirates ID
- Proof of funds
- No Objection Certificate (NOC)
- Sale and Purchase Agreement
- Dubai Land Department (DLD) Registration
How Long is the Property Purchase Process in Dubai?
Generally, a property transaction takes around four weeks for a property transaction to complete after the agreement is signed. If the possession takes longer, make sure it is mentioned in the contract. Usually, cash transactions end up being faster than the mortgage-based transaction.
What is the Amount of Buying a Property Worth Half a Million Dirhams in Dubai?
The minimum down payment for an apartment in Dubai is 20% of the purchase price. Therefore the minimum amount a buyer should have when buying a property worth half a million dirhams in Dubai is approximately AED 150,000. Apart from the down payment on the apartment, you must pay 2% of the purchase price as registration fees to the Dubai Land Department. If someone buys a property of half a million dirhams, the amount will come up to AED 10,000.
The buyer must also pay 1% of the purchase price to Real Estate Regulation Authority for the first AED 1 million of the property value and 0.5% for the remaining amount. For a property worth AED 500,000, this would be AED 5,000. Other costs may be associated with property investment in Dubai, such as stamp duty, valuation fees, and mortgage processing fees. These costs will vary depending on the specific transaction.
What is the Property Purchase Process in Dubai?
The property purchase process in Dubai comes under Real Estate Law No. 7 of 2006: Land Registration Law. You can purchase property in UAE if you are a Gulf Corporation citizen (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and UAE) or a UAE citizen. However, in recent years UAE has introduced ‘freehold areas’ where the foreign population can easily invest.
The steps for purchasing properties in Dubai are given below;
STEP 1: After you have chosen the property you want to invest in, decide on a payment method, cash or applying for a mortgage. If you are buying property in cash, you can negotiate the prices better.
STEP 2: The second step entails signing a Memorandum of Understanding (MoU). You can find RERA forms, the MoU form or Form F, which the buyer and the seller must sign at the Registration Trustee’s office before a witness (usually the broker). The buyer must pay 10% of the property price as a security deposit to the Registration Trustee, which is returned once the property transaction is completed.
STEP 3: the buyers are supposed to meet at the project developer’s office to sign a No Objection Certificate to cement the ownership of the property. NOC is issued only if the buyer makes all payments.
STEP 4: After procuring the NOC, meet the seller at the Dubai Land Department with your passport or Emirates ID, a cheque containing the amount payable to the seller, Form F or MoU and the original NOC is given by the developer. The DLD will issue a title deed, and you’ll be the new property owner.
What are the Documents Required When Buying Property in Dubai?
When buying property in Dubai, several documents need to be filled out. The specific requirements may vary depending on the type of property and the particular transaction, but here are some common documents:
- Sales and Purchase Agreement: This is a legally binding document that outlines the terms and conditions of the property purchase, including the purchase price, payment schedule, and other essential details.
- Title Deed: Also known as a property ownership certificate, the title deed is an official document proving your property ownership. It is typically issued by the Dubai Land Department (DLD) and contains details about the property, such as its location and size.
- Mortgage Documents (if applicable): If you are obtaining a mortgage to finance your property purchase, you will need to fill out and sign various mortgage-related documents provided by the lender. These documents may include a mortgage application, promissory note, and agreement.
- Emirates ID and Passport Copy: You will typically be required to provide copies of your Emirates ID (resident identity card) and passport for identification purposes.
- Power of Attorney (if applicable): If you cannot personally attend the property purchase transaction, you may appoint a representative through a power of attorney document. This document grants someone the authority to act on your behalf in the property-buying process.
- No Objection Letter (NOL) from Developer (for off-plan properties): If you are buying an off-plan property (i.e., a property that is still under construction or development), you may need a No Objection Letter from the developer. This letter confirms that the developer has no objection to selling the property.
It is important to note that the specific documents required may vary depending on the circumstances and the regulations in force at the time of the property purchase. It is advisable to consult with a real estate professional or a lawyer to ensure that you have all the necessary documentation and that the process complies with current regulations in Dubai.
What is the Maximum Delay by the Property Developer to Handover The Unit?
The Dubai Land Developer has paid special attention towards developers delaying handing over units to buyers. The maximum delay developers can afford is the time mentioned in the sales agreement.
Can the Property Take The Developer to Court For Excessive Delay in a Handover?
Yes, the buyer can file a case against the developer if a delay in handover takes more than the delay time mentioned in the sales agreement.
When Someone Buys a Property, Are Utility Charges Included?
The amount of the connection charges varies depending on the size of the property and the type of connection. For example, the connection charge for a residential apartment is AED 2,000, while for a commercial villa is approximately AED 4,000.
The buyer can apply for a DEWA connection online or at any customer service centre. The application process requires the buyer to provide the following information:
- Property address
- Property owner’s name and contact information
- Type of connection (electricity, water, or both)
- Size of the property
Once the application is processed, DEWA will send the buyer a bill for the connection charges. The buyer must pay the bill within 30 days of receiving it.
What are the Minimum and Maximum Service Charges in Dubai?
In Dubai, service charges are higher for properties in more upscale areas, with more amenities and services. Service charges are also typically higher for newer properties, which may require more maintenance. The charges can range between AED 3 to AED 30 per square foot. The service charge you pay will depend on the factors below.
- The type of property (apartment, villa, etc.)
- The location of the property
- The amenities and services offered by the property
- The age of the property
- The condition of the property
What is the Mortgage in Dubai?
- To qualify for a mortgage in Dubai, you generally need to be a resident of the United Arab Emirates. Some banks may require a minimum income level, employment stability, and a certain length of residency in the UAE.
- Mortgage interest rates in Dubai can vary depending on the bank, the type of mortgage product, and the loan terms. It’s advisable to shop around and compare offers from different banks to find the most favourable rate for your situation.
- The maximum loan tenure for mortgages in Dubai is usually around 25-30 years, although some banks may offer shorter terms.
- The property you intend to purchase will be subject to a valuation conducted by the bank or a third-party valuation company. The valuation helps determine the maximum loan amount you can borrow based on the property’s appraised value. Once approved, your mortgage must be registered with the Dubai Land Department.
- This registration process involves paying a fee and completing the necessary paperwork to establish the mortgage on the property.
Can Properties be Bought in Instalments?
Yes, you can buy property in Dubai through instalment plans. Many developers in Dubai offer flexible payment options to attract buyers. These plans typically involve an initial down payment followed by subsequent instalments spread over the construction period or a specified time frame.
Some developers also provide post-handover payment plans, where you initially pay a smaller down payment, and the remaining balance is payable after the property handover. Reviewing the terms and conditions, including the payment schedule, interest rates, and any additional charges or fees, is essential.
Bank financing may be required to cover the remaining balance, and it’s crucial to research the developer’s reputation and seek legal advice before signing any contractual agreements.
What is the Minimum Value for Property That Can Get a Golden Visa to the Buyer?
The property’s minimum value that can get a Golden Visa to the property buyer in Dubai is AED 2 million. The Golden Visa is a residency visa granted to investors, entrepreneurs, scientists, professors and frontline heroes. To be eligible for the Golden Visa, you must meet the following requirements:
- You must be a non-UAE national.
- You must invest in real estate in Dubai worth at least AED 2 million.
- You must own the property outright or have a mortgage with a loan-to-value ratio of no more than 50%.
- You must have a valid passport.
- You must have a clean criminal record.
Once you have met all of the requirements, you can apply for the Golden Visa through the Dubai Land Department. The application process is relatively straightforward and can be completed online. The Golden Visa is valid for ten years and can be renewed indefinitely.
What happens if I can’t pay off-plan property instalments?
If you cannot pay off-plan property instalments in Dubai, the developer and terminate the contract and keep your deposit. This is the most common outcome if you are unable to make payments. The developer is not obligated to refund your deposit, and they may also sue you for any additional losses they incur; if the property has not yet been completed, the developer may allow you to sell the property to another buyer.
However, you will be responsible for any losses the developer incurs, such as marketing costs and any penalties they must pay to the government. Or If you can make partial payments, the developer may be willing to work with you to create a payment plan.
This is usually only possible if you have a good reason for being unable to make payments, such as a job loss or medical emergency. If you cannot pay off-plan property instalments, it is essential to contact the developer as soon as possible. The sooner you contact them, the more likely they will be willing to work with you to find a solution.
What are Affordable, mid and high range for property buyers in Dubai?
You can find several property investment in Dubai spread under various budgets. The list of affordable, mid and high-range for property buyers are listed below.
- Dubai South: This area offers affordable housing options and is located near the Expo 2020 site and Al Maktoum International Airport.
- International City: Known for its budget-friendly apartments, International City offers a range of residential units inspired by various countries.
- Dubai Sports City: This area features mid-range apartments and townhouses, along with sports facilities and a vibrant community.
- Jumeirah Village Circle (JVC): JVC offers a mix of apartments, villas, and townhouses at relatively affordable prices, making it a popular choice for mid-range buyers.
- Dubai Downtown: Home to iconic structures like the Burj Khalifa and Dubai mall, Dubai Downtown offers high-end apartments and luxury living experiences.
- Palm Jumeirah: An exclusive artificial island, Palm Jumeirah offers upscale villas, townhouses, and apartments with stunning views of the Arabian Gulf.
- Dubai Hills Estate: This rapidly developing community features luxury villas, townhouses, and apartments surrounded by a championship golf course and lush greenery.
- Dubai Marina: A waterfront community with high-rise towers, Dubai Marina offers luxury apartments, marina views, and a vibrant lifestyle.
What are Post Purchase Points to Remember for Property Buyers?
After purchasing a property in Dubai, you consider the points mentioned below:
- Understand the maintenance and service charges associated with your property. These charges contribute to the upkeep of the building and common areas and are typically paid to the property mas or owners’ association. Familiarise yourself with the payment ule and ensure timely payments to avoid penalties.
- Many communities in Dubai have homeowners’ associations that set rules and regulations for residents. Familiarise yourself with these guidelines to ensure compliance and maintain a harmonious living environment. This may include rules regarding pets, parking, noise restrictions, and property modifications.
- Consider obtaining property insurance to protect your investment. Property insurance can cover damages to your property and its contents, offering financial security in case of unforeseen events such as fire, theft, or natural disasters. Consult with insurance providers to find the best coverage options for your property.
- If you reside overseas or prefer not to manage your property directly, you may consider hiring a property management company. They can handle various tasks such as tenant management, rent collection (if applicable), property maintenance, and handling repair requests. Conduct thorough research and select a reputable property management company to ensure the smooth operation of your property.
- Keep an eye on the property market trends in Dubai. Understanding the market conditions and demand can help you make informed decisions regarding resale or rental potential. If you plan to sell or rent out your property, consider consulting real estate agents or experts to determine the best timing and strategies for maximising your returns.
- Stay informed about your legal and financial obligations as a property owner. This includes staying updated on changes in laws and regulations related to property ownership, such as taxation and property registration requirements. Engage with legal and financial professionals specialising in property investment in Dubai to ensure compliance and avoid legal or financial complications.
What are Off-plan or Ready-to-move-in property?
Off-plan properties are often sold at a lower price than ready-to-move-in properties. This is because the developer is still building the property and has not yet incurred all of the costs associated with construction. Off-plan properties have the potential for higher returns than ready-to-move-in properties. This is because the property investment in Dubai is growing rapidly, and prices are expected to continue to rise. Developers often offer flexible payment plans for off-plan properties. This can make it easier for investors to afford a property. Off-plan properties are typically newer than ready-to-move-in properties. This means that they will have the latest features and amenities.
Ready-to-move-in properties can be occupied immediately. This can be a major advantage for investors who want to generate rental income immediately. There is no risk of construction delays or cancellations with ready-to-move-in properties. This can give investors peace of mind. The location of a ready-to-move-in property is known, which can be important for investors who want to invest in a specific area. Investors may be able to pay for a ready-to-move-in property with cash, saving them money on interest payments.
What are the Difference Between Freehold and Leasehold?
The difference between freehold properties and leasehold properties is given below.
Freehold properties in Dubai grant the buyer full ownership of the property and the land on which it is built. The buyer holds the property indefinitely and can use, sell, lease, or mortgage it.
Leasehold properties, on the other hand, involve a lease agreement between the owner (landlord) and the buyer (tenant). The buyer obtains the right to use the property for a specified period, usually 99 years or more.
Freehold properties are typically available for purchase by both UAE citizens and foreign nationals.
Leasehold properties are often found in designated areas or developments, such as government projects or specific zones. Upon the lease’s expiration, the property ownership reverts to the landlord unless there are provisions for renewal.
Owning a freehold property provides long-term security and gives the owner more control.
The buyer pays an annual ground rent to the landlord for the leasehold interest.
Can Expatriates Purchase Property on Behalf of Their Children?
Yes, ex-pat parents can buy property for their children in Dubai. The Dubai government allows expatriates, including parents, to purchase properties in designated city areas. These areas are known as freehold zones, while non-UAE nationals can own property. Examples of freehold zones in Dubai include Dubai Marina, Downtown Dubai, Palm Jumeirah, and Jumeirah Lakes Towers.
When property investment in Dubai on behalf of their children, ex-pat parents will need to follow the same procedures and requirements as any other property investment in Dubai. This includes selecting a property, engaging a real estate agent or developer, conducting due diligence, and completing the necessary paperwork and legal procedures. It’s important to note that certain restrictions and regulations may apply, and it’s advisable to consult with a legal professional or a real estate agent experienced in Dubai’s property market to ensure compliance with local laws.
What are the Cost to Buy a House in Dubai?
The cost of buy a house or property investment in Dubai varies on the location, communities and amenities available. Since the real estate market fluctuates often, an appropriate cost of the type of properties is given below.
- Studio apartment: AED 1 million
- One-bedroom apartment: AED 1.5 million
- Two-bedroom apartment: AED 2 million
- Three-bedroom apartment: AED 3 million
- Villa: AED 5 million
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