This article intends to answer the common Google question of should I buy property in Dubai? As we see increasingly more economies worldwide with rising inflation, people are turning to the age-old concept of investing in real estate. This has been a popular method of securing investment, rather than relying on stocks and bonds for decades. Investing in bricks and mortar has always been a sure bet.
However, the boundaries have changed because property buyers often look overseas these days. Either to diversify their portfolio, or they wonder if those markets will deliver a better investment return through rental income or capital appreciation. Dubai is one market that has seen more interest from foreign buyers over the last ten years. Indeed, this location has lots to offer, but as always, when entering a real estate market, knowledge is vital, and that is what we will look at in this article.
Should I buy Property in Dubai?
1: Location is Everything
Many house buyers, when entering the market, do regional research. This is the first big mistake. Drill down into the separate local areas of Dubai. Although Dubai has high rental returns, some areas fair better than others. The same can be said for capital appreciation. Dubai is known for its price surges, but the capital appreciation forecast varies from neighbourhood to neighbourhood. On our viewing trips, we don’t just show property. We explore the communities so property buyers can see where essential daily amenities like transport links are. We also have in-depth knowledge of factors affecting local housing markets like rental demand, local projects and forecasted appreciation. (About the best places to buy apartments and villas in Dubai.)
2: Know Your Property Budget
Dubai’s real estate market offers the best modern architecture, décor, and design. It is not mediocre. It leads the way in global trends. The real estate market is the envy of many other countries simply because it strives for excellence and delivers the highest standards of living. This is great, you might say. However, we have known a few buyers who get blind-sighted and go over their budget. It is important not to stretch yourself financially. Know your budget and factor in closing costs, which vary depending on where you buy and the property type. When people buy Dubai property through us, we always outline a payment plan before closing the deal. This is so you know your final outlay and financial responsibilities.
3: Buying Property with a Mortgage
In some countries like Turkey, where the property prices are so low, many people can buy outright or re-mortgage existing properties in their home country to raise finances. Unfortunately, the prestigious status of Dubai’s market means some buyers turn to Dubai banks for financing. This is a whole other ball game but needs careful consideration if pursuing it. A good credit rating is necessary, as is proof of stable income. Usually, banks in the UAE will lend up to 80%, and property buyers must source the remaining 20%. Criteria will vary from bank to bank, and it is essential to obtain pre-approval before looking at property and putting down a deposit. Contact us if you want to discuss mortgages in Dubai for foreigners.
4: Know About the Retire in Dubai Program
Guess what? Dubai loves people who want to retire there. So Dubai Tourism and the General Director of Residency and Foreign Affairs (GDRFA) launched a program to attract foreign retirees. Applicants must meet one of four criteria to be eligible, and when considering property, that is to invest in unmortgaged property worth AED 2M and ready for habitation. In return, they receive a five-year residency visa. The only other requirement is full medical insurance. For more information, check out the Dubai tourism information board.
5: Property Developers and Contracts
We always investigate any developer before advertising their properties on our books. However, should you buy via someone else, ensure this is something they have done. Ask for examples of their existing projects since there are many stories of sub-standard properties. Also, we are sure we don’t need to mention this, but do investigate and fully understand the fine print of contracts to avoid ending up in a court of law because of legal obscurities or misunderstanding.
6: Rental Yields in Dubai
So, as mentioned above, location is everything for those looking for rental properties. But in addition, there are some other factors to consider, including
- Onsite facilities like swimming pool, gym, etc
- Local amenities like transport links, distance to banks and supermarkets
- Size and quality of the property
- Market conditions and rental demand
- Don’t forget to factor in monthly communal fees, which property owners are legally obligated to pay
- Apartments generate higher rental yields than villas
7: Buying Off-plan Property
Off-plan property is a common feature in Dubai. After all, this is the playground for architects to highlight their talent to the world. Off-plan property has many advantages, including higher capital appreciation, extended payment plans, fewer deposits, and discounted prices. However, as with any country, off-plan projects can sometimes stretch past their completion date. So, as mentioned above, always check out the developer and scrutinise the contract.
8: Buying Key Ready Property
One significant advantage of key-ready properties is that home buyers can generate rental income immediately. In addition, if you buy from a seller already renting, you can also see proven rental records for a clearer and more precise projected income. The downside is that deposits must be between 20 to 25% depending on the price, and closing costs can be higher than off-plan property.
9: Other reasons to Buy Real Estate in Dubai
- Multi-cultural community and various languages
- Active Dubai job market for those looking to work
- Abundant leisure amenities
- The gorgeous UAE weather and climate
- Tax incentives and relief
- Low crime rate
- Top-Notch local amenities in Dubai
- Global investment hotspot
- Vibrant tourism market
Also About Dubai
Living in Dubai: Considering the pros and cons of living in Dubai, it is easy to see why this destination is an ex-pat haven. Working professionals and couples move to Dubai to further their careers and enjoy a culturally rich lifestyle but with the benefits of modern living in apartments or villas. Dubai is more modern than many other global destinations and international cities. This article looks at the advantages and disadvantages of living there.
Dubai Property Market: So, we hope we have given a clearer picture of whether you should buy property in Dubai? Start your search by browsing our portfolio of apartments and villas in many areas of Dubai. Each listing contains everything to know, including price, location, home features and contact details to find out more via email or arrange a viewing. Alternatively, contact us today and speak with a local agent. We are Spot Blue international property agents, and we have helped many overseas buyers purchase property in Dubai.