Buying a home is never an easy decision. They define the quality of our lives and are a sign of our status, depending on their location, type, plans and accessibility. Not to mention that they probably represent the biggest individual investment most of us will make in our lives.
However, in a rapidly changing city like Dubai, there are other factors to consider. While Dubai remains a buyer's market, changes in visa rules, incentives for first-time buyers, increased demand from international investors and the Expo-driven boom have made choosing the perfect property more difficult than before. Although buyer preferences and opportunities vary considerably depending on whether the buyer is a foreigner or a citizen, a first-time buyer or an experienced property buyer, and whether the intended purchase is an investment or a residential property, there are nevertheless certain factors to consider.
Many homeowners make the typical mistake of chasing their dreams too far, to the detriment of their budget. An excellent method of determining whether a property is right for you is to make sure your monthly housing costs are less than a third of your monthly income. Also take into account maintenance costs and annual property expenses, as well as administration and management fees that will be added to the purchase price.
Thankfully, the Dubai Land Department (DLD) has set very clear criteria for annual maintenance costs, which you can calculate using a maintenance index based on the total area of your property and the agreements made by your future community.
RERA Service Charges apply to properties located in Dubai and you can find out more about these maintenance and upkeep charges on the DLD website.
One of the most important variables affecting your decision is the down payment required to buy a home in Dubai. UAE Central Bank rules stipulating:
- A personal loan cannot be used as a down payment For properties worth less than AED 5 million, expats must make a down payment of at least 25%.
- For properties worth less than AED 5 million, Emirati citizens must pay a deposit of at least 20%.
- Buyers can take out a personal loan to cover bank and brokerage fees as well as initial transaction costs.
For foreigners looking to settle in Dubai long-term, it's possible to get a visa fairly simply. Applicants buying property worth AED 1 million or more are entitled to a 6-month multiple-entry visa or a 2-year residence visa, while those buying property worth more than AED 5 million without a mortgage are entitled to a 5-year residence visa. Check whether you meet the conditions for these property-related visas.
Buyers looking to purchase an investment property or planning to convert their home into one in the future should check whether the estimated rental income is sufficient to cover their mortgage payments and ongoing maintenance costs. Inexperienced buyers could misinterpret a current rent forecast as the amount they will receive each month for the duration of their loan. On the other hand, markets can also be volatile. In this case, it is essential to seek professional advice.
For the uninitiated, buying a house or other property can be daunting. Investing in property involves certain legal aspects, no matter where you are. This is also the case in Dubai. Let's take a look at how to buy property in Dubai. In accordance with the real estate laws, determine the legal procedures to be followed for this purpose.
The Land Registry Law governs the legal aspects of buying a property in Dubai. According to Article (4) of Law No. 7 of 2006, anyone can buy and own real estate in Dubai. The law states that you can buy a property anywhere in Dubai if you are: a UAE citizen, a GCC citizen.
Foreigners can buy property under the same law, but only in areas reserved for foreign ownership. Dubai offers foreigners different types of property ownership, including freehold and leasehold.
In Dubai, the main difference between ownership and leasehold lies in the rights of the buyer. If you buy a house on a long leasehold, you only have ownership rights for a limited time. If you buy a property on an emphyteutic lease, you have full ownership of the property and the land on which it is built.
Want to start a property investment project in Dubai? Get in touch with our Prestige Immobilier Dubai agency.
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