Q1) Why are property prices so competitive?
No city in the world is presently more successful at marketing
itself than Dubai. Property prices in Dubai are around one-third
per square metre of those in the UK. Local and international
banks and financial institutions in the UAE are producing
more mortgage options by the day, and the net effect is
to lower the cost of borrowing. If it costs less to own
a home in Dubai then this is good for prices.
Q2) How easy is it to buy property in Dubai?
Very easy. There are currently no government taxes of any
kind when purchasing a property in Dubai, nor is there a
Capital Gains Tax. When the Dubai Lands Department registers
title, buyers will pay a 1.5% tax based on the purchase
price of the property. If they have a mortgage, they will
pay 0.25% of the value of the loan. Purchasing is straight
forward, simply fill in a reservation form and we will draw
up a contract. Once you have signed this we send it to our
developers for sealing and this is then returned to you.
Once your payment plans are negotiated you can move ahead
with your purchase without fuss.
Q3) Do I need a local sponsor to buy property in Dubai?
No, not anymore. Most properties are now freehold to make
the market more attractive. Once you have purchased your
property you can also apply for a residency visa for yourself
and your family through your developer.
Q4) Do I get the title deeds?
Eventually you will. At the moment there are 87,000 new
projects being built in Dubai. As this is a new venture
in Dubai, you will not get the deeds until the property
has been completed. If, however, you wish to sell the property
before it is built or any time up to completion, then all
you need is your original contract with the developer. The
land registry has now been established and staff have been
allocated to developers in order to cope with the title
demands when developers complete.
Q5) Can I trust the developers?
There are very few developers in Dubai and each of these
is sponsored directly by a government official. Ultimately,
each developer is overseen by the government and therefore
do not have any risk attached to them. The Dubai Municipality
has introduced codes of standards regarding building permits
and contractual clauses and a civil code which contains
protection regarding building standards.
Q6) What is the rental yield I can expect?
Currently in Dubai there is a healthy rental market especially
to foreigners and yields are between 8 - 10%. At present
there is a shortage of property to rent with many project
only due for completion towards the end of 2006. However,
with the population expected to double over the next 5 years
rental demand will remain high for many years to come.
Q7) Is it difficult to arrange a mortgage?
No, mortgages are available on a 10 to 25-year basis through
several major banking institutions. Interest rates are linked
to those in the United States and the UAE market.
Q8) What are the payment terms?
Payment terms will vary according to development but normally
for apartments expect to pay between 15 and 25% deposit.
The remainder of the funds will be required over the building
term in stage payments, often 10% every three months. For
villas, expect between 10 and 30% as deposit with the balance
paid on completion. Maintenance fees for apartments range
from 4 - 6AED per square foot per annum. Villas are typically
600 - 800AED per month.
Q9) Will the property be freehold?
Most of the developments are offering freehold properties
and your contract will confirm this. |
