4 Tips you NEED know when buying property in Dubai
Investing large amounts of hard-earned money in the rapidly developing real estate market of Dubai can be a terrifying experience to the average buyer. But don’t fret, Ahlan! and our friends at bayut.com have come up with four handy tips to turn the nightmare into a dream.
Know your property types
Property in Dubai can be split into four types: freehold, leasehold (also known as usufruct), common hold and the elusive off-plan.
Freehold properties can be purchased by anyone, but such properties will only be located in certain areas that have been earmarked as freehold zones. The title freehold implies that once acquired, you own the property and can use it as you deem fit. You will be the registered owner and the asset will be inheritable upon your death. The top real estate developers in Dubai are Emaar, Al Nakheel and Dubai Properties. The three mostly offer luxury properties in prime areas of the emirate and that might be beyond many investors’ periphery. Dubai City's website has the details on other approved developers who might have options closer to your budget.
Leasehold properties come with long-term leases. A typical lease for a residential property would stretch between 10 and 99 years, or 50 years for corporate properties. Although you will not become the owner, the lease would let you use the property any way you like (lease, rent if agreed with the owner), however, alterations to an existing building would only be possible with the owner’s consent, which would be best to have written down.
Common hold properties usually include apartment units within hotels. Commonality means that you and other residents within a shared building pay fees for maintaining common areas like car parks, corridors, parks, swimming pools and gyms.
Off-plan properties are projects that exist only in the books. Such projects have been announced and the developers lure investors with lucrative offers, such as 10 percent down payment for bookings, in order to limit financial risk and debts. Developers know that if a property is not physically existent at the moment, buyers will demand a lower price based on developer's reputation, location of property and project illustrations and design models. This helps developers book most units at ordinary prices and generate enough money to complete the planned project.
Know the law!
A new law imposed by the Dubai government ensures transparency in the real estate industry by regulating developers' professional conduct that has in the past resulted in late deliveries and false promises. Per the law, those purchasing off-plan property in Dubai will make payments to the Dubai Land Department approved banks, rather than to the developer, who will only be allowed access to the funds until after certain stages of construction have been completed.
Get in there first
Prices of off-plan sites rarely remain low for long and as the construction skies, so do the rates. Those buying at the start are sure to see maximum gains. Buying early also lets you choose the best of the bunch. Get the best view for half the price!
And finally... Lawyer up!
Consulting a local property lawyer is almost a must. Although you can organise financing for your purchase in Dubai, it is a tedious process and is best handled by a financing specialist.