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.

Property in Dubai, Abu Dhabi - Guide to Buying Property in the United Arab Emirates

Overview

In recent years, the government of Dubai has reformed the property laws in that country. Through this reformation process, more and more people have found that buying residential real estate and investment real estate in that country is ever more attractive.

Historically, many foreign nationals were reluctant to invest in real estate in Dubai because there was a great deal of uncertainty as to exactly what type of real estate interest a person could actually obtain by investing in real estate in that country. Specifically, the most desired type of interest in real estate is what is known as a freehold estate. Legally speaking, in Dubai and in other countries the world over, a freehold estate is one in which a person has an absolute interest in a piece of real estate and can convey that real estate to any other person or entity without any encumbrances to such a conveyance. It is the state in which a person has an absolute ownership interest in a piece of real estate.

Investment Property in United Arab Emirates - Dubai

Far and above, the most common type of real estate purchase that foreign nationals are making in Dubai involves investment real estate. In recent years, the government of Dubai has made a concerted effort to draw more foreign investment into that country than at any other time in the history of Dubai.

By way of example, a significant number of foreign nationals have invested in business and commercial property within Dubai. More often than not, a group of foreign investors tend to come together to invest in a particular commercial property in order to spread the risk a bit. Even though Dubai is one of the more stable countries within that particular region of the world, the Middle East remains something or a powder keg and the future stability of the region is always a concern.

Residential Property in United Arab Emirates - Dubai

The demand by foreign nationals for single family dwellings historically has been nominal. However, in the past decade, the number of people from different nations who can be found seeking single family dwellings in Dubai has increased by nearly 100%. There are two primary reasons why more foreign nationals have become interested in single family dwellings within Dubai.

First, with Dubai and its government becoming more interested in playing a larger role on the world’s economic stage, there has been something of a concerted effort at attracting foreign business enterprises to that country. As a result, there are more foreign nationals who have elected to purchase real estate in that country for residential purposes.

Secondly, throughout much of the Arab world and into Europe and Africa, a growing number of people from these other nations have begun to look toward Dubai as a place to maintain vacation or holiday property. More and more people have elected to make the purchase of second residence in Dubai for vacation and holiday purposes.

Residential Real Estate - Apartments in United Arab Emirates - Dubai

As mentioned previously, due to the influx of foreign nationals into Dubai over the course of the past decade, the demand for residential property is on the increase. Many foreign nationals have turned to purchasing and owing apartments for residential purposes.

Generally speaking, even rather luxurious apartments can be purchased in Dubai for comparatively reasonably prices. For example, a person generally can make the purchase of an apartment in Dubai that would cost considerably more for a comparable unit in many other countries around the world .

Holiday Property in UAE Holiday Resorts

As referenced previously, a growing number of people have begun buying and owing vacation property within Dubai. This includes foreign nationals who are turning to Dubai as a place to travel to for vacation or holiday purposes.

Because Dubai is one of the most stable nations in all of the Arab world, many more well to do people from other nations in the region are turning to Dubai as a location in which they can own second or vacation residences. In addition, a growing number of Europeans are also taking to purchasing vacation properties within Dubai. The trend towards the ownership of vacation property by foreign nationals in Dubai is expected to increase over the course of the next two decades, according to real estate analysts who have spend a great deal of time considering real property trends in Dubai.

Specific Steps to Buying a Property in United Arab Emirates - Dubai

Since the 1940s, most foreign nationals who had an inclination to purchase real estate abroad have shied away from buying such property in any of the countries in the Arab world. There are two primary reasons why so many foreign nationals historically have avoided buying real estate in Arab countries, including in Dubai.

First of all, as news reports have recounted over the course of the past sixty years, the Arab world is far from being the most stable region in the country. Wars and violence have been common occurrences within that corner of the world.

The second reason why so many foreign nationals have avoided buying and owning real estate in the Arab world rests in the fact that the laws governing the ownership of real estate in many of these countries has been complicated and structured in such a way that it overtly discouraged foreign investment in real estate. Indeed, many countries that make up the Arab world have prohibited foreign ownership of real estate during much of the past fifty to sixty years — including to the present day.

With all of that said, Dubai has been on the vanguard of creating foreign-friendly real estate laws that encourage the investment in real estate by foreign nationals. First and foremost, the laws in Dubai have been reformed to make it abundantly clear that a foreign national can purchase and own outright real estate within that country. A foreign national can obtain a freehold interest (as has been discussed previously) in real estate in Dubai.

In Dubai, the first step in buying real estate is an oral offer to a seller. In Dubai, a foreign national needs no special permission to make the purchase of real estate in that country. In addition, unlike some countries (including some in the Middle East region of the world), a foreign national can own real estate directly and does not have to bounce through an extra set of hoops towards the goal of buying and holding real property.

Following the acceptance of the oral offer, an initial real estate sales contract is drafted and executed between the parties. A deposit — in an amount negotiated by the parties — is placed at this time by the buyer to the seller. Generally speaking, the deposit is not refundable unless the seller of the property is unable to convey ultimately the real estate to the buyer. In other words, barring some snafu by the seller, a buyer will lose his or her deposit if he or she backs out of the contract.

In Dubai, a mortgage lender from nearly any country in the world can provide financing for the purchase of real estate in that country. What one needs to bear in mind when buying property in Dubai is that many times a lender will require collateral beyond the property located in Dubai, beyond the real estate being purchased. In most real estate transactions the world over, the only collateral the lender requires for a mortgage loan is the real estate itself that is buying purchased. However, when a foreign national is making the purchase of real estate in Dubai, a mortgage lender in most instances will require collateral beyond the actual real estate situated in Dubai that is being purchased.

The primary reasons for the requirement for additional collateral when obtaining a loan to purchase real estate in Dubai include the general instability in the region. There is a concern on the part of some mortgage lenders that something might cause a disruption in Dubai that might effect the real estate collateral in that country. Thus, the typical lender will want additional collateral for any loan. Additionally, while the real estate related laws in Dubai are very liberal, there is always some concern that a new regime might take control of the country causing a disfavor able alteration in the real estate laws in that country. Again, for that reason, lenders desire additional protective collateral in regard to the purchase of real estate in Dubai.

With this in mind, when purchasing real estate in Dubai, it is imperative that a potential purchaser makes certain that he or she has access to other property that can be used as additional collateral for the purchase or real estate in that nation.

Once the various requirements of the initial contract are satisfied — the buyer obtaining financing, the seller making certain that the property is free of any encumbrances that might prevent a conveyance to the buyer — a final contract is executed, the remaining money due to the seller is paid and a deed for the property is given to the buyer who will become the new owner of the real estate at that juncture.

Property Abroad always recommends using a Solicitor or Lawyer.