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 Scenario in Dubai

Property in Dubai is a major investment arena for investors worldwide. The investment pours in not only from commercial companies but also from individuals abroad. In the last five years, the real estate sector has seen a marked boost in investments. This in turn has increased the supply of property in Dubai. In fact, both the processes are influenced by and in turn affect each other. In the coming years, this trend is expected to bring about an increased demand for purchasing residential and commercial units. One of the major consequences of this would be soaring property prices. Although many analysts expect that the supply would exceed demand in near future, this is believed to be an impending possibility only for the high income group.

The process of buying real estate in Dubai is simple and hassle free. Property in Dubai requires no national registration. Usually, one has to pay some amount as booking or reservation deposit. Then, there is a deferred payment schedule wherein the remaining payment is divided into installments spread over the construction period. Units are financed to non-UAE residents only on certain ventures. The interest rates of properties range between 6 to 9 percent and the term usually lasts for 15 years. Upon non-UAE transactions, one can even obtain freehold rights.

There are factors that make investing in Dubai realty a profitable exercise. The capital gains tax and rental income tax are 0 percent. Secondly, the demand-supply ratio is carefully monitored and controlled by the government so that the properties account for strong growth rate and returns. Last year, the UAE economy witnessed a 26 percent nominal GDP growth.

Moreover, although legal advice is required to purchase property units in Dubai, there is no fee to be paid for the same. There is no tax levied on the properties. But there is a land registration tax which is paid to the government on completion of the project involved. This amounts to 1.5 to 2 percent of the price. However, if the contract is resold before completion, a transfer fee ranging between 1 to 7 percent is paid to the developer. To add to the benefits of purchasing Dubai real estate, the government provides resident visas on non-UAE investments.

Even the mortgage market has developed quite rapidly over the last few years. The emergence of HSBC as an international mortgage provider for property in Dubai has changed the scenario for ever after. The mortgage rates offered by the bank on are highly competitive and flexible.

In 2002, His Highness Sheikh Mohammed bin Rashid Al Maktoum, with a vision to transform Dubai into a global city, had decided to encourage international investors towards purchasing more properties. This dream will certainly materialize in the years to come.