- Property in Dubai
- Myth 1 – buying a home in Dubai is unprofitable because prices have fallen due to the crisis
- Myth 2 – a foreigner does not have the right to take ownership of real estate in Dubai
- Myth 3 – the procedure for buying property in Dubai is complex and non-transparent
- Real estate agency in Dubai
Property in Dubai
If you are looking through villas for sale in Palm Jumeirah the UAE, but still have doubts about investing in real estate in Dubai, then this article is for you.
Myth 1 – buying a home in Dubai is unprofitable because prices have fallen due to the crisis
Many remember that Dubai was one of the first places outside of the US to be hit by the global financial crisis and that the real estate market in the emirate fell into deep stagnation. Recently, however, housing and rental prices have been rising again and are approaching pre-crisis levels.
- As of May 2022, villa prices have increased by 21% year-on-year and are 9% above the level of early 2020, according to Jones Lang LaSalle, a reputable global consulting agency.
- Apartment prices are not recovering so quickly and so far remain 18% below their January 2020 levels.
- As for the cost of renting housing, it is growing at an average annual rate of 10% in both segments.
The demand for buying and renting real estate due to the growth of the Dubai economy and good business prospects in the Gulf countries and the Middle East is expected to grow. Moreover, instead of unskilled labor, which was previously employed in the construction sector and became unnecessary due to the crisis, qualified workers from developed countries now come to the city more often. Therefore, in addition to a high potential for value growth, residential housing in Dubai is capable of generating high current rental income – much higher than, for example, in Western Europe. If we talk about average market rates, then for housing today, the rate of net rental income (that is, rental income minus all property maintenance costs) averages 5-10% per annum, depending on the type and category of property, its location and cost of service. If the owner agrees to entrust the real estate agency with the delivery of his housing for a short-term lease, and he himself is going to come to the emirate, e.g. only in the summer and on New Year’s Eve, then the income can be even higher.
Myth 2 – a foreigner does not have the right to take ownership of real estate in Dubai
It is no secret that in many countries of the world foreigners do not have the right to buy property and register it as their property. In these countries, buyers have to resort to the help of local residents or register local companies, buying this or that property on their behalf. There is no such problem in Dubai. Many believe that housing in the emirate can only be purchased on a long-term lease for 99 years. However, it is not. Citizens of foreign states that are not members of the Cooperation Council for the Arab States of the Gulf (GCC) have the right to acquire real estate in the emirate in full ownership.
Though, it can be done only in specially stipulated territories, in the so-called freehold zones. The list of such zones is established by the Decree of the Ruler of Dubai No. 3 of 2006. These include almost the entire territory of the “new Dubai”, including such popular areas as the Palm Jumeirah, Emirates Living, Jumeirah Lakes Towers, Downtown and others.
To buy an apartment or villa in your name, a foreign citizen only needs to present his passport. In most cases, buyers turn to real estate agencies, without which almost no transaction can be done.
Myth 3 – the procedure for buying property in Dubai is complex and non-transparent
Of all the seven emirates that make up the UAE, Dubai has the most developed and transparent legal framework in the field of real estate. Registration of real estate transactions is carried out by the DLD at the time of the seller’s and buyer’s request, who receives a registration certificate certifying his ownership of the purchased property. Such an order of “instant” registration simplifies the procedure of buying and selling housing as much as possible and minimizes possible risks both from the seller and the buyer. The state-owned Dubai Real Estate Regulatory Agency (RERA) oversees compliance with the law. It is, in particular, responsible for the registration of real estate projects, as well as the mandatory registration of developers, real estate agencies and agents themselves. RERA’s activities are aimed primarily at protecting the rights and interests of buyers and sellers and are designed to minimize the possibility of dishonest actions on the part of agents.
Real estate agency in Dubai
To make a deal even more understandable and transparent, you can use a help of a certified broker. Ax Capital agency’s specialists are at your service if you want to become an owner of a property in the OAE. Check out their website for the latest offers on the market.