An Encyclopedic Guide To Buying a House in Dubai For Expats – Prices &Process

buy house in dubai

From an investment standpoint, Dubai is a premier real estate market where all types of properties, including residences and Luxury properties for sale in Dubai by cryptocurrency, are available. Several people have been wanting to invest in Dubai since the Dubai government amended the legislation to allow foreigners to buy residences and apartments. Buying a house in Dubai for foreigners comes with numerous advantages, including a high potential for return on investment. 

Dubai has hundreds of properties available for future investment. Villas for sale in Dubai, Flats for sale in Ghalia Tower, Properties for sale in Akoya Oxygen condominiums, apartments for sale in Dubai, and single-family houses are among them.If you want to invest in real estate in Dubai, you need to take the time to research the many alternatives.

Types of Properties in Dubai

Freehold Properties

With the fast expansion of freehold homes, foreigners can now acquire property in Dubai more easily than ever before. Foreigners looking to invest in the UAE or buy a home in Dubai are more likely to seek out freehold properties. People in the UAE have access to freehold properties, which can be rented, sold, or inherited if necessary. In addition to dwellings or apartments, freehold properties for sale in Dubai have been connected with relatively undeveloped areas of land. This enables owners to build a home of their choice on the site. Because the investor has perpetual complete ownership of the property, it can be utilized for any purpose. It also necessitates less paperwork and does not necessitate state approval. If you want to buy a freehold property in Dubai, you must go through a government-approved property or real estate developer, such as DAMAC Group.

Commonhold Properties

Commonhold property is another sort of property that potential investors in Dubai might purchase. These buildings have principal condominiums, apartments, and non-residential units. Buying a commonhold property gives you the individual right to buy, sell, or rent a property for inheritance purposes. This is comparable to owning a freehold property. Yet, while commonhold homes are similar to apartments, owners must pay fees for property maintenance as well as common areas. Often, these structures are owned by a real estate or property developer.

Determine Your Rationale For Buying Property In Dubai

One of the most important factors to consider when purchasing a property in Dubai is whether the property will be used for investment or personal use. The reason for locating a personal property in Dubai is as follows:

  1. Buying Real Estate in Dubai for Investing  The real estate market in the UAE is quite popular, and there are numerous advantages to purchasing a home in Dubai. They include a high rental yield, a high market capitalization, and a business-friendly approach. Most foreigners or expatriates aspire to acquire an affordable house in Dubai that would provide a substantial return on investment. A thorough market analysis might assist in obtaining a decent deal on an apartment in Dubai.
  2. Purchasing Property In Dubai For Personal Use  Dubai has grown into a major real estate and economic centre throughout the years. Many expatriates from various regions of the world have settled in the city. Property in Dubai is frequently viewed as being extremely expensive and out of reach for many foreigners who work as blue-collar labourers. Yet, times have changed. People who work or own a personal business in Dubai are increasingly inclined to buy rather than rent their personal property. Because the government has lifted certain limits on property ownership, the process of purchasing property in Dubai for foreigners has become simpler.

Aspects To Believe Before Buying Property in Dubai for Foreigners

  1. Location  Location is one of the most important factors to consider when buying in Dubai real estate homes. Those who want to invest in an apartment property or purchase a luxury mansion in Dubai should conduct research on the finest areas for future real estate investment. Some of the city’s best areas, such as Dubai Marina, are connected with a specific collection of facilities that provide chances for a high-quality living. As a result, investors should hunt for opportunities that will benefit them. Searching for such properties can be time-consuming; nevertheless, real estate provides a list of the greatest real estate in Dubai in perfect locations that can provide foreign purchasers with a long-term income on investment.
  2. Research and Analyze Market Stats  It is certainly difficult to choose a certain destination when there are so many appealing possibilities. To receive the maximum return on your investment, you must first conduct your own property market analysis. As an interested investor, you can also learn about current financial investment trends, projections, and patterns. Recent investment projects in Dubai, such as Costa Brava, Santorini, and Eterno Prestige Villas, may be more appealing to investors. The more research you conduct, the more benefits you will derive from the UAE real estate market.
  3. Tenure  Before investing in Dubai’s real estate market, you should consider how long you intend to stay in the UAE. This is significant because it will assist you in calculating the entire value that you can obtain from your possible return on investment. Renting a house is preferable if you are unsure of your potential commitment or long-term ambitions in the UAE.
  4. Affordability  Affordability is one of the most essential aspects addressed globally when purchasing real estate property. The monthly housing expense of an individual must not exceed 25% of their entire income. Your budget should also account for any upfront fees. This might amount to approximately 9% of the total buying price of the home.  As the owner of a Dubai real estate property, you must also keep track of the maintenance expenses and pay the annual service charges. Because of the pandemic’s cheap housing prices, the Dubai real estate market has turned into a buyer’s market. As a result, this is an excellent moment for investors searching for discounted houses and properties to invest in Dubai.
  5. Rental Returns  If you are considering renting out your house in Dubai, you should consider how much money you will make. This will assist you in determining whether the possible rental revenue is sufficient to cover your repayment, mortgage, and maintenance obligations. Normally, investors can expect to earn a gross yield of 5% to 9%.
  6. Residence Visa  Real estate properties worth AED 1 million or more in the UAE can help you obtain a resident visa. This may be subject to strict guidelines. In the UAE, there are primarily two types of resident visas available. The first is a six-month multi-entry. The other option is a two-year residence visa. Real estate property owners can also sponsor residence visas for their families. A property in Dubai valued at AED 5 million or more, with no specific mortgage value tied to it, and held for 36 months or more can help potential expats or foreigners obtain a 5-year or longer residency visa. This is mostly determined by eligibility requirements.

Outlay Needed For The Pursuit Of Buying A House In Dubai

The cost of buying a house in Dubai is fixed. It is critical that you are aware of all the costs associated with purchasing a home in Dubai in advance. This is critical for creating an appropriate budget.

  • Fees NOC charges: This is normally between AED 500 and AED 5000. It can be paid directly to the property developer or real estate agent.
  • Fees Registration Fees: DLD may be paid about 4% of the entire purchasing price of the property.
  • Commission of the real agent. This is roughly 2% of the buying price of the property. 

Aside from the aforementioned expenditures, there may be other charges. These could be used at both the property developer’s and the DLD’s offices. You may also be required to pay fees to the real estate developer for a community/building. If you do intend to take out a mortgage, it is critical to understand the terms and conditions of the mortgage loans offered to foreigners or expats living in Dubai. Additional parameters that the central bank should consider when granting a mortgage are as follows:

  • Foreigners or expats who want to invest in a real estate property worth almost AED 5 million can borrow up to 75% of the entire value of the property. On the contrary, UAE residents can borrow up to 80% of their income.
  • For real estate properties worth AED 5 million or more, initial or first-time buyers can borrow up to 65% of the total value of the property. On the contrary, UAE residents have the option of borrowing roughly 70% of the property’s value.
  • Expats who want to invest in or buy a second home have the option of borrowing roughly 60% of the entire value of the property.
  • If you intend to buy off-plan apartments, both expats and UAE citizens will need to put down a 50% deposit.
  • The buyer’s debt-to-income ratio cannot be greater than 50%.
  • The mortgage term cannot be more than 25 years. This is due to an age restriction (This is usually in the range of 60 to 75 years).
  • Foreign citizens may apply for a specified loan amount that does not exceed their annual revenue or income by more than seven times.

Purchasing A Property Through Real Estate Developers In Dubai

When buying an apartment or house in Dubai, you must study the real estate developer and ensure they have a reliable reputation before signing a contract or agreeing to pay a set amount for the property. This is done to ensure that your investment is sound and viable. Apart from that, there are several additional things that you may need to accomplish before selling a property:

  • Gather detailed information in writing for all fees that must be paid, as well as the prospective due date.
  • It is critical to ensure that a developer has registered with a relevant regulatory agency.
  • Check the rates on other comparable properties. This will assist you in ensuring that you have paid the correct amount.
  • Consider current developments. This will help you to see what other buyers have said about the personal residential properties offered by the real estate developer you are interested in.
  • You should use a solicitor who has global experience purchasing real estate. This will allow you to better comprehend the real estate process and ask pertinent questions. 

Before selecting a real estate developer, be certain that all of the aforementioned points apply to the real estate agents or property developers dubai. This will allow you to confirm whether the real estate developer is licensed and operating legally. Also, before making any financial commitment, you must examine and review the experiences of your prior clients.

Rules for Buying a Property in the UAE for Foreigners

The main reason why the UAE is such a popular real estate market among foreigners is because it has relaxed many of the restrictions and regulations that make purchasing property difficult in recent years. This is a good moment for foreigners to buy houses and properties in Dubai because the process is relatively simple. You can buy property in Dubai in two ways: from a private seller or from a developer who is selling off-plan.

Buying from Private Seller 

The procedures are straightforward:

  • The buyer and seller reach an agreement on the terms and conditions.
  • The two parties sign a Memorandum of Understanding, which clarifies the details of their agreement but is not legally binding. Typically, a 10% deposit is required.
  • If a mortgage is required, the buyer can obtain one.
  • The buyer must pay the whole purchase price of the property during the transfer of the deed.

Off-Plan Purchase 

The procedure goes as follows:

  • A reservation form is completed, which contains the conditions of the sale agreement, the buyer and seller’s personal information, and how payment will be made.
  • After a 5% to 20% deposit, the sale and buy agreement is signed. This contract is legally binding.
  • The buyer secures a mortgage if one is required.
  • The developer’s office is where the property deeds are transferred. At that point, the entire purchase price is paid.