Over the past few years, Dubai has emerged as the poster child for the Middle East to the world. Not only it is one of the most well-known places there, but it also ranks at the top of the charts when it comes to tourism, economy, and infrastructure in the entire Middle East.
A key parameter that signifies the value of a place in the context of relevance ad sustainability is that of real estate. You can bet that the real estate business in Dubai is as promising as it could get. To help you out get a fair idea of the same, we are answering some burning questions related to the topic. So, follow through!
Is Buying Property in Dubai a Good Investment?
First of all, you should understand why people invest in real estate. Well, it is the dream of every person to have a house of their own. While some people save up their earnings to build a home eventually, there are others who have a lot of capital and don’t know what to do with them and thus invest their wealth into real estate so that the money stays secure and grows as time passes by.
The real state serves as your long-term permanent asset. Not only you will get to live in your dream home, but it will also come in handy during critical emergencies.
Speaking of Dubai, this place has been the most populated city in the UAE since 2002. This means that it is a favourite amongst property investors. So, needless to say, the real estate business here is booming. If you look at the numbers, just in 2017, an astonishing 69,000 real estate transactions were made in Dubai alone worth more than AED 285 billion. And as you can imagine, the numbers are only going up.
The hotel property investment in Dubai is also extremely lucrative. This is because Dubai is one of the sought-after tourist destinations in the world. With more than 700 hotels, and 100,000 rooms available, this place offers exciting options for tourists. In 2018, the city witnessed more than 16 million visitors from across the globe and an additional 8 million visitors in the first half of 2019. In 2018, it was the fourth most visited city in the world, only after Bangkok, London, and Paris.
So, whether you want to invest in residential real estate or hotel real estate, Dubai provides a bunch of feasible options.
Who can Buy Property in Dubai?
For a very long time, Dubai practiced a very strict law that only allowed local citizens to buy property there. But, now the laws have been relaxed and anyone can buy a property there. These new laws allow expats to purchase properties in the freehold regions of Dubai which includes the hot spots of the city such as IMPZ, Downtown Dubai, JLT, Dubai Sports City, Al Barsha South, Emirate Hills, Palm Jabel Ali, Palm Jumeirah, and Dubai Marina, among others.
You will not be asked to present proof of any type of residency or other related permits when you are purchasing properties in Dubai. However, you do need to show your original passport. It takes around a month to complete the transaction from the date on which the Sale of Agreement is signed. The procedures are, for the most part, straightforward and easy to follow. An MoU (Memorandum of Understanding) is signed alongside payment of ten percent deposit.
Be sure to research before starting your buying process as it will save you a lot of time and effort and take the help of lawyer’s advice if need be.
Do You Get Residency if you Buy Property in Dubai?
Please note that you might not get residency automatically even if you buy the property. This is because property ownership in Dubai doesn’t necessarily mean gaining a residence visa. You need to follow a different procedure for it. If your property is worth more than AED 1 million, then you would get residency for three years, and you need to renew it thereafter.
Recently, the UAE government has announced a five-year visa for real estate investors. Additionally, the government has also started a five-year visa for retirees and a ten-year visa for business owners or investors.
Benefits of Buying Property in Dubai
Buying a property in Dubai can be highly beneficial for you. Here are some key benefits of buying a property in Dubai:
Dubai and the UAE at large have established itself as a force to be reckoned with in the global economy. It saw a 2.4% rise in its economic growth in 2019. This includes transport, logistics, retail, wholesale, and tourism. Since each of these businesses requires physical space, buying a property in Dubai, and investing in it is profitable.
Easy Procuration of Visa
Obtaining a visa can be tiresome in many international destinations but this is not the case when it comes to Dubai. All you need is an investor visa if you want to set up a business in Dubai. Even the procurement of residence visa is pretty hassle-free in the city.
Promising Field for New Innovation
Sustainability requires innovation, and Dubai encourages investors to tap into their potential of launching and establishing their own businesses. Dubai Internet City is a perfect field where technology blends with creativity, thereby attracting thousands and thousands of IT professionals from around the globe. This means that more people being interested in finding a place to stay in the city, which is always great news for property investors.
High Population Demand
Dubai is the most populated city in the UAE with more than 3.3 million people. This beautiful city is recognized as a multi-cultural expat hub. It resides job seekers, business investors, and everything in between. The higher population speaks clearly for the rise in demand for residency. Many foreign expats build luxurious and economical residential complexes for the sole purpose of renting them as it serves a great source of income for them. This is another reason why investing in real estate in Dubai is beneficial.
No Property Tax
Let’s be honest! We all wish that we didn’t have to pay taxes. Well, if not completely, a large chunk of tax can be avoided in Dubai since property tax is exempted in this city. This is why so many foreign investors feel the need to invest in Dubai instead of their home countries.
Safety and Security
With major businesses running in the city and millions of visitors from different corners of the world, it goes without saying that this city offers top-class security to its investors. Theft and robbery are hardly seen in the city and, if found, the city has got highly strict laws against it. As an investor, this is a big relief for you. It is not a surprise that Dubai has been recognized as one of the, if not the most stable city of the MENA (Middle East and North Africa) region.
Risks of Buying Property in Dubai
While the perks of living in Dubai are quite enticing, you should remember that it is not a bed of roses and just like any other place in the world, it also has certain risks involved.
The most prominent one among the risks is the initial cost that one has to bear while purchasing a property. When you are directly buying from a developer, you would have to pay a mandatory fee to the Dubai Land Department (DLD) which is 4 percent of the property value that you buy and the payment for issuing the Title Deed and administration fee.
Besides, those who want to go for mortgages need to pay a Mortgage Registration Fee to the DLD which is 0.25 percent of the total value of the mortgage in addition to the admin fee.
Things to Keep in Mind before Finalising the Deal
Before you finalize your deal, there are a few things you should keep in mind. This is to ensure that your deal is safe and you don’t have to deal with any complications in the future. So, take a close look at them.
- Do thorough research about the prevailing rate, perks, age of the property, and the distance to social infrastructure in the area where you are making your purchase.
- Time your sale as to when the rates are at their lowest.
- Keep your paperwork sorted and beside you to save time in finding and procuring them. It is also suggested to make several copies of them beforehand.
- Get a background check of your buyer.
- Set boundaries on the deals and negotiations you are willing to make.
- Have a contingency plan.
With each passing year, the demand for property in Dubai is increasing. Investing in real estate and cashing on them by either renting them out or holding on the growth of their value seems logical and highly beneficial from both, a short-term basis and a long-term basis. So, getting a hold of land in this beautiful city is highly recommended. But, as we said earlier, getting the help of a legal consultant will make the entire process convenient. A legal consultant will not only assist you in handling the legal proceedings but will also help you recognize the best path that will ensure your maximum success. So, be sure to take the help of one of them.