The Dubai Real Estate Market

In 2002 Sheikh Mohammed bin Rashid Al Maktoum of Dubai had a vision to create the city of the future. In doing this and creating a truly cosmopolitan and global society, an international community would be required, and so the Sheikh decided to allow foreign investors to purchase property on Dubai soil.

Dubai and the UAE's future is focused upon creating a business and tourism environment second to none which centres around incoming foreign investment from commercial institutions and individual investors.

• Future Demand: Population is destined to increase from 1m to 3m whilst tourism will also triple from 6m to 15m, by 2010
• Future Supply: All master-planning is Government controlled to carefully manage the demand-supply ratio thus maintain strong growth & returns
• Capital Gains Tax: 0%
• Rental Income Tax: 0%
• Legal & Notary Fees: None required, although legal advice is recommended
• Land Registration Tax: 1.5% (this is paid to the Government on completion)
• Transfer Fee: 1-7% (this is paid to developer on resale of contract before completion)
• Buying Process: Simple. No Company formation is nor National registration required
• Payment Structure: Following an initial reservation deposit, a deferred payment structure is usually provided by the developer with payments spread over the construction period
• Finance: This is available to non-UAE residents only on certain projects, with competitive interest rates from 6 - 9%, and usually with 15 yr terms and reasonable conditions
• Capital Appreciation: Recent years have risen between 15 - 25% annually
• Rental returns: Recent years have returned between 10 - 20% annually
• Freehold: The right to obtain freehold rights on your property is provided with most non-UAE purchases of property. See below.
• Residency: Resident visas are supplied with non-UAE purchase on property
  

Purchase Procedure & Legal Costs

Purchasing off-plan in Dubai is a relatively simple process which does not require use of a lawyer, however of course Property Frontiers does recommend you do always take legal advice with any financial investment. All property investment available to foreigners in Dubai is within special zones master-planned by governmental organizations, and as a result the contract structures must be passed before the government before they can ask customers to sign. There is no capital gains tax or income tax within Dubai itself.

For more advice on purchasing property in Dubai, please contact us

Finance

Mortgages in Dubai are not yet the developed and versatile product we are gratefully accustomed to here in the UK, and they are not available on all developments. Each individual developer is required to negotiate for finance to be provided on a per-development basis. This situation is expected to change drastically once Freehold Law is ratified (see below).

Lenders (generally local banks, finance companies or HSBC Dubai) conduct due diligence analyses on those developments that have requested finance first, and due to the large marketing budgets and extreme aggressiveness of the market often these developments do sell out even before finance is available.

When finance is provided, such as with Al Hamra, the loan will most likely have a maximum term of 15 yrs and be of repayment status only (no interest only loans). Interest rates vary between 6% and 8% and as with the majority of overseas loans for UK investors, an individual's net disposable income is required to be roughly 3 x the figure for the monthly mortgage repayment. Loans usually offered range from between 50% to 75% LTV.

The service we offer investors:

Property Frontiers carefully selects property investment opportunities from politically stable countries that indicate excellent economic growth, have internationally respected legal systems, stable currencies, attractive tax policies and will provide strong investment yield and growth.

Though research we saw the UAE had good investment potential so we have selected a variety of investments in and around the Dubai Emirate which offer different advantages and cater for all types of investors depending upon what they hope to acquire and achieve with their investment, hence, you may notice that we do not list many of the open market properties that often have an "agents margin" attached to the selling price. Please click here or see below for a listing of some of the properties we are promoting in Dubai.

For Property Frontiers to recommend the best investment for you, it is important you can first honestly answer these simple questions:

1. What is your budget and will this increase over the next 2 years?
2. Will you prefer financed investments or are you able to invest with cash?
3. What is your time scale for investment, when may you want to exit?
4. Is this for long-term investment of short-term profit?
5. When are you looking to take ownership of your property? Are you looking for early completion or are you prepared to wait a few years?
6. Do you have any particular size, feature or location requirements of your property?
7. Will you be managing the property yourself or would you prefer a managed and guaranteed return, such as with The Cove?

Once you have though about these or if you would like further advice please contact one of our agents, call us on 0870 429 2884 or have a view some of our properties we have available below:

See the listings below of our investment properties in Dubai for sale