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.

Property in Dubai - Will the Dubai Property Market Implode?

Since 2002 the real estate market in Dubai has seen rapid growth. The reason behind this was the change in ownership legislation that was passed by the governance post 2002.

The main point of the legislation change was to allow non-nationals to own property outright freehold in the region. This as an effect has had a resultant effect of bringing large investment into the region and attracting a large amount of foreigners into the region.

Due to the tax implications of working in the area (100% tax free) amongst other things Dubai has attracted a massive amount of workers in to the region.

With this initial massive influx of workers and individuals into the area there was a gross under supply of housing in the area, and this has had the effect over the past few years of raising property prices as well as rents to unprecedented levels in the region. Residential property values are still rising in the region but at slower levels seen over recent years.

With developers like any business observing this aggressive appreciation being achieved in the property market in Dubai larger amounts of developers started to build ever more opulent as well as quantities of accommodation to cash in and also satisfy demand.

What many are starting to believe now is that this demand that had fuelled the growth in the property market was mainly fuelled by investors speculating and not end users.
Also there will be a large amount of developments that will reach completion over 2009-2010, so many are believing that these factors combined will cause a correction in the market due to an over-supply in the market.

So the main factors that will determine if a correction is imminent in this region is going to population growth, and skilled at that. If Dubai can continue to support an expanding skilled workforce who can afford the high housing costs then we can expect to see potentially a stabilising of the market if not then I would assume a potentially large correction in store specifically in Dubai.

This has been one of the reasons that many investors have started looking at other less developed Emirates undergoing growth to invest in property.

Purchasing Commercial Property in Dubai

In order to make wise investment decision, it is of paramount importance that you know how the property market of Dubai operates. This is quite important because Dubai property market is still in its early stages. Therefore, it is hardly a surprise to know that property market of Dubai operates differently from the US or United Kingdom market.

Getting Professional Help

If you are interested in purchasing a commercial property in Dubai, make sure that you take some professional help first. Most of the real estate brokers have direct access to commercial properties from real estate developers. Real estate brokers will not only take into account your requirements but also give you advice through out the buying process and help you deal with the legal aspects too.

Off-plan Properties

Real estate developers of Dubai have realized the fact that at present, the real estate market is buzzing with demand for commercial property. Because of this, recent months have seen various new off-plan projects being released in the market. Plenty of businesses are seeing this new trend as a good choice to pay high rents that are being commanded in some portions of Dubai.

With high growth rate in Dubai, plenty of foreign business houses are interested in doing business here. The Dubai government has realized that need of the day is quality commercial space that is in high demand by local as well as foreign companies. If the government is not able to provide that, chances of achieving an even higher growth rate get slim. It is worth mentioning in this regard that there is quite a bit of under supply of office space for businesses in Dubai at the moment.

Less Volatile Investment

Point to be noted here is that commercial property investment is normally much less volatile as compared to the residential property investment. It has been noticed that as a tenant you are required to stay in the premises for a longer period of time. On the basis of the lease agreement, you are restricted to hold on to your investment.

Ready Occupancy

At this time, there are only small finished commercial developments completed in Dubai. If you are one of those investors who want immediate returns on your investment, then purchasing commercial property in Dubai is best for you. Because of shortage of completed property in Dubai at present and the big number of new businesses also coming, there is a good chance that demand may outweigh supply.

To conclude it can be said that purchasing commercial property in Dubai is recommended and highly profitable at this time. Not only it is fruitful as an investment option but also quite advantageous if you want to start a new business. However, before you buy commercial property in Dubai, contact one or two reputed real estate brokers to get some insight into the property market of Dubai. Following this process will ensure that you will not make any mistake during the buying process.

Purchasing Property in Dubai

Dubai property is one if the most convenient places when it comes to settling down or in doing business. In the recent times there have been many investors who have been interested in the Dubai property.

The country has the many things to offer people like affordable luxury houses, tax free environment, and capital growth and is one of the world’s fastest growing city.

Including Dubai there are other six emirates that make up the United Arab Emirates. The Dubai real estate market has experienced the boom with excellent luxury properties to offer. In the past few years, the country has got many new constructions and several real estates projects.

The Dubai projects include offshore properties like The World and Palm Islands. The inland projects include the Dubai Waterfront, Dubai Marina, Business Bay, The Burj Dubai Complex and Dubai land. Dubai has got the world’s tallest building i.e. the Burj al-Arab.

Previously, no one was able to own property in Dubai but after the announcement on March 12 2006 that the non-United Arab Emirates nationals can also purchase the property and since that time there has been much rush. Foreigners will be able to own the property only after they submit a no-objection letter which states that all payments transactions are fulfilled.

The three kinds of ownership in the legislation are the freehold, common hold and usufruct. In a free hold property the house owner will have to complete ownership rights and then the person will be handed over the property. In usufruct the person can use another’s property for long term which should not be less than five years. In common hold the person can get hold of the property by sharing it with some other person also.

Hence you can opt from any one of the above and get hold of your property.

So Why Invest In Dubai Property?

Dubai is now being recognized as the business, leisure and sporting capital of the Middle East. Overseas property buyers and its millions of visitors each year are attracted to the liberal attitude and relaxed environment. Live and let live is the feel of Dubai where the majority of the 1.5 million populations are in fact expatriates.

Doing business in Dubai is surprisingly easy with minimal bureaucracy and a can do attitude that makes Dubai an attractive place for big business. The country wants inward investment and to increase its population. Politically stability and low crime are also one of the features of Dubai. International visitors feel safe and the presence of heavily armed police and army is not present in Dubai. How this state has achieved such an oasis of tranquility is remarkable. The ruling Royal family are admired and spoken highly by the people of Dubai. It may be the lack of political interventions or political parties in Dubai that may indeed make this place harmony.

The climate in Dubai is sub tropical and arid rain is seen during the winter months of December to March. The average temperature is between 10-30 degrees Celsius and can reach up to 48 degrees in July and August.

International investors buying property in Dubai include Russian, British, Indian and Pakistani investors. The French are now seeing the potential of this region and I anticipate will also become one of the major investors in this region.

Investors from the Middle East and United Arab Emirates are amongst the earliest investors. Buying property in Dubai as an overseas buyer is quite straightforward. The majority of real estate in Dubai is available off plan or pre construction. Typically as property developers launch a project there is flurry of activity amongst investors. Seasoned investors have speculated about the bubble bursting in the Dubai real estate market.

Oversupply has led to concerns by overseas property investors. In 2010 the number of homes in the region is set to double to 530,000. The commercial sector is also expanding at a rapid rate with office space set to triple, so who is going to buy all this real estate? Dubai Property Executives explain how Dubai is as great place to invest.

Nakheel is a government backed property developer Chief Executive Chris O’Donnell ‘People do get a little concerned about Dubai, thinking we are just building and hoping we will sell the product on completion. But we sell product prior to starting construction. Everything you see at Palm Jumeriah has been sold” Property Developers Dubai Properties Chief Executive Mohammed Binbrek “We do not begin until the units are sold and then we ask for a 70% deposit.” When asks if he thought the Dubai market would crash with so much construction he replied ” Around 40% of the population is under 20 add this factor to a population that is growing it implies much more houses.

With so much construction planned to make Dubai the city of the future it is a great time to buy property in Dubai.