Dubai is a proven high-performing real estate haven with an extensive array of property options, ranging from sleek studio apartments to grand and opulent estates. Investors can acquire property via a number of flexible purchasing options, including cash, mortgage and now even cryptocurrency.
But how easy is it to buy real estate in Dubai?
The short answer is: pretty easy – certainly no more difficult than within most other leading global property markets.
Despite its geographical distinction from other real estate and fiscal powerhouses such as Europe, the US and East Asia, Dubai’s recent legislative shifts have both welcomed and actively encouraged foreign investment. In fact, the landscape has evolved to such an extent that a substantial portion of Dubai property is now owned by international investors, surpassing local emirati ownership.
Can anyone buy property in Dubai?
There are certainly very few restrictions based upon nationality.
Dubai is the largest city and one of the seven emirates in the United Arab Emirates. It is also the epicentre of the economic and financial activity of the nation and, although boasting a population exceeding three million, only 8% are Emirati nationals according to official figures from the Dubai Statistics Center.
This cosmopolitan city is home to a vast array of expats from diverse cultures and backgrounds, many of whom consider making Dubai their permanent home through property investment. Despite its participation in the Common Reporting Standard, an international framework for bank information exchange, Dubai, along with the wider UAE, has built a strong reputation for having some of the most favourable tax legislation in the world. This blend makes it an attractive proposition for high-net-worth individuals interested in leveraging investment opportunities in Dubai.
Since the landmark 2002 foreign property ownership decree allowing foreign property ownership, Dubai’s real estate market has undergone a significant transformation. It has now become a vital component of diverse investment portfolios, offering lucrative opportunities in a dynamic environment that appeals to investors from across the globe.
Who owns property in Dubai?
Reflecting its status as a global investment hotspot, it is not surprising that investors from all over the world buy property in Dubai. This diversity is a testament to the markets’ worldwide appeal.
The bulk of offshore Dubai real estate is divided evenly between three key regions: the Middle East and North Africa; South Asia; and Europe and Central Asia. Meanwhile, Sub-Saharan Africa, North America, and the East Asia and Pacific region are also making their mark, collectively accounting for 15% of ownership.
Can you buy property in Dubai?
If you’re able to buy property in other prime property markets such as London, Hong Kong, or San Francisco, then you can probably purchase property in Dubai, too.
Dubai offers a straightforward and accessible property-buying process, even for overseas investors, but first, it is necessary to understand the assets available for purchase.
Dubai property market performance
The current performance of Dubai real estate is very strong, where investors can expect close to double-digit capital appreciation and yields ranging from 5% to 10%. You can learn more about the Dubai property market performance here.
Property categorisation in Dubai
What can you purchase in Dubai and what does that mean – legally?
There are three main and distinct property types available to buy in Dubai and they cater to various needs and preferences of foreign buyers in Dubai, offering different levels of ownership rights and investment prospects.
- Rapid development in freehold properties has simplified the process for foreign buyers in Dubai.
- Commonly sought by investors interested in UAE investments or purchasing flats in Dubai.
- Accessible to UAE residents, enabling renting, selling, and inheritance.
- Often associated with undeveloped land, allowing owners to build as desired.
- Offers full ownership without requiring extensive paperwork or state consent.
- Purchased through government-approved developers like DAMAC Group for reliable transactions.
- Includes condominiums, apartments, and non-residential units in buildings.
- Grants individual rights for buying, selling, or renting with inheritance privileges.
- Similar to freehold properties but involves fee payments for maintenance and common areas.
- Typically owned by real estate or property developers.
- Usufruct arrangements are common for long-term lease investments in the UAE.
- Occupants lack the rights to modify or alter usufruct properties.
- Lease terms for usufruct properties can extend up to 100 years.
How to buy property in Dubai
Below is an overview of the steps most property transactions take in Dubai. Of course, it’s important to note that each vendor may impose unique variations and therefore investment processes may also vary. We can guide all our clients through the processes involved in their own transactions:
- Securing the unit: Signing a reservation agreement and paying a reservation fee after selecting a property.
Sales and Purchase Agreement (SPA)
- Legal binding: The SPA serves as a legally binding contract, detailing terms, payment structures, handover dates, and warranties.
- Legal review: Essential, especially in light of recent regulations like the Trust Account Law of 2020, offering enhanced buyer protection and regulating fund usage by developers.
- Off-plan properties: Developers register these with the Dubai Land Department (DLD).
- Buyer responsibilities: Pay registration fees, acquire an Oqood (pre-registration) certificate, and upon completion, receive the title deed signifying full ownership rights.
- Consulting Financial Institutions: Reputable banks assist in mortgage financing, assessing eligibility and competitive interest rates, then guiding you through the application process if needed.
Service and maintenance
- Owner responsibility: Assume responsibility for service charges and maintenance fees, contributing to common area upkeep.
- Professional services: Engage property management and leasing services post-completion for a seamless transition into property ownership.
Costs of buying property in Dubai
Understanding the expenses involved in buying property in Dubai is crucial to ensure a smooth transaction.
Here’s a general breakdown, but as with the purchasing process, please be aware that every developer and investment is unique and the costs can vary. We can guide all our clients through the processes involved in their own transactions:
- NOC Fees: Range between AED 500 to AED 5000, payable to the real estate or property developer.
- Registration fees: Approximately 4% of the property’s purchase price, paid to the DLD.
- Real estate agent commission: Typically around 2% of the property’s purchase price.
- Additional charges might be imposed by the property developer’s office and the DLD.
- Potential fees for community/building maintenance to the real estate developer.
Leveraged purchases are becoming more common in the Dubai property market. For foreigners or expats seeking mortgage loans in Dubai, the following guidelines usually apply:
- Property valued below AED 5 million:
- Borrow up to 75% for expatriates (UAE citizens can borrow up to 80%).
- Property valued over AED 5 million:
- Borrow up to 65% for expatriates (UAE citizens can borrow up to 70%).
- Second property:
- Borrow up to 60% for expatriates (UAE citizens can borrow up to 65%).
Off-plan property purchase
Some lenders are now more comfortable providing funds for off-plan purchases, however, the following criteria usually applies:
- Deposit requirement: Both expats and UAE citizens need to pay a 50% deposit to be granted a mortgage for off-plan properties.
Understanding these costs and mortgage terms helps to set a more comprehensive and accurate budget, and ensures compliance with regulations when purchasing property in Dubai.
The easiest method to buy property in Dubai
Navigating Dubai’s property market becomes a seamless experience with the expert guidance of real estate agents, lawyers, and financial institutions. Having professionals to support you guarantees the quickest and most secure property acquisition journey.
Dubai’s embrace of an international property market, fused with data-driven insights, fosters an environment perfect for prosperous investments. Trusting the expertise of seasoned professionals simplifies the pathway to lucrative and rewarding property ventures in this dynamic city.