Top 10 Questions About Dubai property
Here is a list of the most popular questions asked by customers looking to buy a low cost investment property
1.Why are prices rising in Dubai?
After massive drop in 2008/2009 and relatively stability for 3 years prices are now starting to rise. The 3 main reasons are:-
-Dubai Population Growth (50% increase in next 4 years)
-Massive increase in Tourism
-Return in confidence to Dubai
2.Will Dubai Property Price continue to Rise?
Nobody can be certain about the levels of property growth, but most analysts believe that prices on ‘ready’ properties will rise and exceed the 2008 peak levels before stabilizing and growing at a slower rate. See graph below which shows average price trend for smaller investment properties in the past and forecast for future.
3.Why are people buying property in Dubai?
For pure investment to rent out and capital growth -70%
For pure own use (emigrating to Dubai) – 30%
For intermittent holiday use – very few as not cost effective anymore. Most leave their properties rented out all of the time and rent themselves during holidays. This is more flexible and cost-effective.
4.Are Mortgages available to non-residents?
NO. Non-residents cannot get mortgages in Dubai. You have to be resident in Dubai for at least 6 months with a salary going into a Dubai bank account and then you could qualify for a 50% to 70% mortgage at interest rate of around 6%. All of our customers do not use a mortgage for these investment purchases.
5.What sort of property is best for investment?
-Easy to rent and Gives high rental yield – over 8%
-Good expected capital growth in next few years
-Low costs such as service charges
-Easy to resell in the future
In the current market, lower cost Studio and 1-bed apartments in residential areas away from the expensive seaside properties are proving to be the best.
6.Which areas are best for property purchase?
Inland areas where property prices are not already too high are better. Prices are lower, Rental yields higher and future capital growth is expected to be good. Seaside areas tend to be good for pure own use but not for investment.
7.Does Purchase of Property give you a Visa?
Yes- You can get a 6 month renewable visa for yourself and dependents if you purchase ANY property in Dubai (previously the limit was AED 1m). The visa does not allow you to work (you still need a work visa) and is not permanent residence. It has to be renewed every 6 months. No visa gives you permanent residence in Dubai
8.Are properties Freehold?
All of the properties we sell are freehold. In certain areas of Dubai – e.g. Deira and Bur Dubai, only Emiratis can purchase the freehold title. In some other areas properties are leasehold.
9.What are Running Costs?
For a typical low cost 1-bed property, your investment on Plan B would be around AED 364K, Annual Rent would be AED 40K. Annual Service charges would be around AED 7K. The management would be free for the first year and full management after the first year would be 10% of the rent (or about 4K per year). All of the other costs are the Tenants responsibility.
10.What is the usual Purchase Process for your investment properties?
-Select the Type of Property (Studio or 1-Bed)
-Select the payment Plan
-Provide full details and ID
-Get all of the information including draft agreement
-Arrange viewing in Dubai. Property will already be rented
-Get answers to any further questions and Make Decision
-Sign Agreements and make 10% payment
-Arrange for POA to be done for Transfer
-Make 65% payment and transfer Title Deeds
-25% payment taken from rental income
-Property is managed for you and 3 monthly statements provided and rent credited to your account.