The property market in Dubai: What you need to know before buying
The real estate market in Dubai, the largest city in the UAE, is actively developing, but due to the “boom” today there are especially many offers in which an inexperienced investor can get confused.
The Dubai real estate market is very active. According to the Dubai Land Department, there were nearly 75% more transactions in January 2022 with a 145% increase in total transaction value compared to the same time frame in 2021. There were 15% further real estate deals in January 2021 than in January 2020.
This is partly due to the Emirates becoming one of the first nations to open for tourism in 2021, which significantly increased the number of visitors visiting the nation overall and Dubai in particular. Investors from all over the world actively invested in local real estate, receiving passive income from renting out.
Buying Dubai residential real estate is a major investment and a difficult choice, as you must make a decision on the area, type, and layout, and choose an affordable option. A good way to make it enjoyable is to drop into a good rental shop and rent a Bentley in Dubai to drive around the objects you like. Renting a luxury car will save you from unnecessary worries and allow you to focus on business. In this case, renting is better than buying.
Another reason for the growing interest in real estate in the UAE: is the World Expo 2020, which had a strong impact on the demand for housing – both for rent and for buying.
The third market driver: an increasing trend of business relocation to Dubai. Companies are attracted by the favorable taxation regime in the emirate and the opportunity to use an alternative currency.
The Dubai property market has seen a “boom,” and there are now unusually numerous offers in which an inexperienced investor can get confused and choose an illiquid property. Therefore, we always recommend choosing projects with help of a specialist and carefully studying all the conditions.
What are the benefits of owning property in Dubai?
The certification of the UAE’s immigration status is the key benefit. Real estate in the Emirates may be purchased for $205,000 and a residence permit can be obtained in only one month. Family members, such as the investor’s spouse and dependent children, may participate in the program.
Is it worth buying now?
If you have savings and want to invest in real estate, then Dubai is a great option not only to save but also to increase your savings. For example, if you purchase objects at the start of construction, then by the time the object is commissioned, you can earn up to 30% on resale due to an increase in the cost of the object.
Purchase process, taxes, and fees
The purchase process consists of the standard steps that accompany most overseas residential transactions: find a suitable property – sign a contract – make a deposit – register the estate in the new owner’s name and pay the required fees.
Today, before making a transaction, you will also need to make sure that bank transfers are available: our practice shows that transactions are carried out without restrictions, but banks may require additional transaction documents from the developer to confirm the transfer.
A registration charge (Dubai Land Department transfer fee) equal to 4% of the property’s worth is required of investors. The charge may occasionally be split equally between the buyer and the seller. A registration cost is further paid by the buyer, depending on the kind of property (from 2.000 to 500.000 AED). You must pay a fee ($70) to the district court in order to receive a certificate of ownership
Additional costs may be faced by investors who plan to rent out property through a local rental agency, which may charge around 5-7% of rental income. But at the same time, the investor himself receives 7% of the regular annual yield for long-term leases and 10-11% for short-term ones.