Frequently Asked Questions
- Do I need a lawyer to purchase or sell property in Dubai?
In Dubai, you don’t need a lawyer to purchase property. However, some non-residents prefer to deal with conveyancing companies or lawyers and therefore you can always choose one of the many established and reputed firms for completing the purchase or sale of your property in Dubai.
- Do I get a visa if I buy a property?
Yes, if you purchase a property with a cash paid value of over 1.0M UAE Dirhams or US $ 275,000 approximately, you can get an Investors Resident Visa renewable every two years, subject to approval by immigration authorities.
- Can I buy a house anywhere in Dubai being an American citizen?
There are especially designated FREEHOLD areas and communities for non-UAE citizens, where any foreigner can purchase properties under their own name.
- Can I get finance from a mortgage lender for purchasing a property easily in Dubai being a non-resident Investor? How long does it take to get a pre-approval from the bank? How long is a pre-approval valid for?
Yes you can get finance from multiple Banks and lenders for purchasing properties, however you will need to get pre-qualified with them by providing the proof of your income such as salary certificates, bank statements, audited balance sheets in case you are business owner etc., even though you may not be residing in Dubai and can show your income in another country such as USA. At maximum, 60% financing is available for non-resident mortgage clients by the Banks in UAE.
Loan Process usually takes 2-3 weeks for Pre-Approval or Pre-qualification and a further 30 days for the mortgage loan to be processed once you have identified the property you wish to purchase. Pre-approvals are valid for 60 days which gives you then enough time to search for the right property as per your loan qualification and down payment availability.
- How long does it take to complete the Purchase?
Once you are ready to finalize a property, a Sales and Purchase Agreement is signed between you and the Seller which usually has 30-45 days for completion of transfer of the property under your name.
- If I cannot travel to UAE for Transfer for any reason, how can I complete the Sale or Purchase of my Property?
You can give a Power of Attorney (POA) to someone you trust such as a relative or friend living in Dubai or someone that can travel to UAE, who can then complete the process of any such sale or purchase. There are also Lawyers and Property Conveyancers who can do the needful for a certain fee (usually about 10,000 Dhs.) This Power can be issued and notarized at the Notary Courts in UAE or any UAE Embassy overseas. You can issue either a general Power of Attorney or a task and property specific POA.
- Can a POA only be given in Dubai?
No. A POA can be made in Dubai or the country of residence of the giver. POA can be made in the country of residence through the attestation processes at UAE embassies in their respective countries of residence.
- What do you think about the market? I heard its going down?
Dubai as a Real Estate market is maturing with each passing day and with lots of rules and regulations being implemented by the Dubai Government, the overall perception and transparency for buying and selling properties in Dubai have improved manifolds. With a lot of infra structure developments related to construction and tourism industries in the last few years and more expected in the next 5-10 years, the property market in Dubai will keep on improving. Real Estate markets all over the world, including mature markets, have cycles. However like in other mature markets, if you wish to purchase a property with a goal to hold for a longer term or rental income (ROI), then the prices of properties for you is only going one way that is UP & UP. With all what is happening in & around Dubai, there is no doubt that the property market will see a substantial increase in prices over the next 5 years. With current interest rates being at historic lows in UAE, mortgage payments are much lower than rents, converting a lot of expatriates into home owners and with rich elite of Gulf countries and other prominent countries of the region such as India, Pakistan, Iran, Egypt etc., purchasing second homes in Dubai as a norm or must have has created a very vibrant healthy property market. It is very hard for anyone to time the bottom perfectly, but in all probability its already turned around for the better since January 2016. It’s actually the perfect time to buy now if you plan to purchase a property for either ROI or capital gains.
- Where is a good location to invest?
There are a lot of areas one can invest, depending on your budget, purpose of investment, and duration/holding period.
- Why do I have to pay service charges, when I have to maintain my own property?
Service charges are payable to the developers or the Home Owners’ Association (OA). These charges cover your part of expenses incurred on common areas such as the lobby, swimming pool, gym, elevators, building facilities, etc. The annual budget of expenses must to be approved by RERA, so it’s controlled against anyone misusing or over charging the property owners. As a property owner, one should insist on seeing the RERA approval of the charges from the management company.
- Which property do you think is good for investment in Dubai currently?
Looking at investment opportunities within the Dubai real estate market, we can identify a number of options however one asset class seems to stand out. While there remain opportunities across all asset classes, the residential sector remains the most attractive of the traditional sectors, with continued opportunities to develop and hold middle income housing for rent. Thumb rule – if the rental income is 6% or higher of the investment value, it is a good investment. When investing in real estate in Dubai, the old adage of location, location, location will always apply. With a great location, your investment both in terms of capital gains and ROI will keep on improving in the shorter and also over the longer term.
- What do you think of the Dubai property market at the moment?
We are definitely experiencing tremendous levels of buying in the last 6 months and each month passing, there has been more and more transactions recorded by the Dubai Land Department this year.
- What do you think of the Under Construction Dubai property. Is my money safe if I purchase in Off Plan Developments in Dubai?
There is absolutely no risk any more when you purchase in any off plan project in Dubai. RERA and DLD being the controlling authorities for all property matters in Dubai, have introduced a series of measures controlling the launching and sales of any such projects after through approvals and background checks of the Developers. Each and every purchase has to be recorded within 60 days of Sale to you by the developer with Dubai Land Department and you shall get a SPA from the Developer and an Off Plan Registration document from DLD as proof of your purchase after making your initial down payment within a maximum period of 60 days. There are Escrow accounts established separately for each development and all payments made by Investors are only paid in Escrow accounts from where payments are released as per construction progress. This ensures that your money cannot at all be misused by any one arbitrarily and all amounts are paid by Investors based on construction milestones achieved by the Developer. Gone are the days since the crash of 2008/09, when the Developers could take money from any Investors and then re-invest in some other businesses or other projects or run away with Investors money. All your investments are very efficiently protected and the purchase process is very transparent and smooth. There are very serious consequences for Developers or Real Estate Brokers for any non-compliance of the strict rules and regulations already in place by Dubai Land Department including heavy penalties.
- Has a proper escrow account system and the supervision of disbursements for construction made a difference?
Yes, most definitely, as once again controls are in place. Money is spent properly on the project itself, and investors are absolutely safe.
- Is the market in Dubai now mature and stable?
Dubai’s economic outlook remains broadly positive, with the IMF expecting a GDP growth rate of around 3.7% during 2016 driven by the emirate’s dominant private non-oil sector which continues to expand. Experts agree that the Dubai market has become ‘smarter’ and more mature since the property crash, following several successful regulations and measures implemented by the government. In light of the challenges uncovered during the previous cycles, the government has worked hard to better regulate the real estate market, with the creation of RERA instrumental in this process. Dubai has been an investment hotspot in the Middle East for quite some time now. Dubai is particularly attractive to foreign investors due to the more deregulated real estate sector and the ability for foreign purchasers to buy freehold real estate in many parts of the city. These regulations are providing increased confidence among foreign investors in the long term stability of Dubai. In addition to Dubai’s economic diversification efforts and position as a regional hub for the broader region, the emirate also possesses a more open and transparent real estate sector than its neighbouring countries which contributes to the facts that support long term growth in the Dubai property market. Most of the investors and developers remain confident of the long term attraction of the Dubai market. Dubai’s strategic location and high quality infrastructure have helped it to develop its reputation as a global trade hub. The UAE is highly ranked for its ease of doing business and openness to investment and trade, which will further support investment and spending in the build-up to Dubai World Expo 2020. Overall we remain positive on the long term outlook due to future growth and demand drivers, including Expo 2020, the opening of a number of major new leisure drivers (including Dubai Parks and The Marvel Theme Park), as well as some other large scale infrastructure developments.
- What are the most exciting things happening in Dubai which can sustain the future growth?
There are very interesting developments completing in the immediate next few years. First of all Dubai Parks is completing which includes LEGOLAND, Motion Gate/ Sony Studios Theme Park, Riverland Dubai, Six Flags and Marvel Theme Park. Then there is the Blue Water Islands with the largest Ferris Wheel in the World called the “DUBAI AIN”. The opening of these attractions will create an enormous theme park based tourism in Dubai second only to Orlando. This alone will propel Dubai to new heights of its population growth with multiple economic opportunities available for Investors. You must have of course heard about EXPO 2020 which will be a very big event for this region. Dubai Opera House is also opening in 2016 in the newly planned Culture District in Downtown Dubai. Of course Dubai has been the favorite shopping and tourist destination for a long time but with additional attractions and projects coming up in the future this Metropolitan City will undoubtedly be the HOTTEST PROPERTY MARKET in the region in both near and long term future, comparable to any mature property markets.
For information and to guide you further on how to buy a property or to check on the best possible property investment options, please email us at info@taktical.com
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