According to Emirates News Agency (WAM), Dubai’s economy is growing at a rate of 3.2% and is expected to rise in the coming years. The thriving economy has investment potential, which is why local and overseas investors are attracted to Dubai’s real estate market, offering tax-free benefits. The city with its world-class infrastructure, amenities, and rapid development is also the top choice for expats and foreigners to settle in.
While finding a moving company in Dubai may be easy with the help of ServiceMarket, buying a house requires thorough research.
Things to Know About Buying a House in Dubai
When buying a house in Dubai, planning is the foremost and crucial step to a seamless experience. The important factors to consider include market trends, legal laws, potential fluctuations, budget limitations, terms and conditions, personal requirements, and other associated costs. Good planning can help you choose the best property, save property management costs, and also yield long-term investment returns.
Market Trends & Fluctuations
Dubai’s real estate market is evolving and is a magnet for the affluent. The strategic location makes it a popular destination for business and tourism. When buying a house in Dubai, you must be mindful about the emerging market trends. Property value and supply-demand dynamics are impacted by various external factors. Make sure you are aware of reputable sources for real estate market reports and analysis to guide your decisions.
Laws & Regulations
Foreign nationals residing anywhere in the world and expats living in the UAE can purchase a property in Dubai. If you are an expat, know that foreigners can fully own properties in designated areas only, but it gives them complete ownership and the right to sell, lease, or trade the property. In contrast, a leasehold property is leased for 99 years.
Local (Emirati) nationals have different property ownership rights and can fully own properties anywhere in Dubai, without restrictions on ownership type or location. Hence, do not rely on what you hear, instead go for a professional legal consultation to get all the information about regulations, risks, and compliance with local laws.
Costing
It is important to determine your budget and calculate all the related costs before you start your property search, such as financing, mortgage fees, government fees, closing fees, and insurance premiums. After estimating the budget, consider potential rate fluctuations, shortlist options, and hunt for properties that match your budget.
Locations & Property Types
You must know the key residential locations in Dubai and the facilities they offer. The high-end locations include Downtown Dubai, Palm Jumeirah, and Dubai Marina. Whereas, cost-effective options include Jumeirah Village Circle (JVC), Dubai Sports City, and Arabian Ranches.
You may look into off-plan properties in Dubai, as those are often sold by developers at a lower price compared to fully constructed units. However, there may be potential risks, such as project delays or changes in market conditions. Therefore, you must carefully research the developer and project.
While cost is a main factor to consider when buying a house, other aspects like facilities, community, and proximity to the workplace are also worth considering.
Investment Potential
Although Dubai’s economy seems to be growing, the global economy can influence its real-estate market. The good news is that the city’s government has been competitive in dealing with economic challenges and maintaining a stable market. Hence, real estate prices are less prone to economic shifts. Still, it is important to consider a few aspects that will help determine the property value. You should be well-informed about economic growth prospects, future infrastructure projects, changes in laws, property type, and management costs to determine the investment potential of the property in that specific area.
Experience & Reliability of the Realtor
You must adopt the right approach when buying a house in Dubai. Hiring an experienced and reliable real estate agent will be to your advantage. They will guide you in every step, helping you make the right decisions by advising you about the buying deals, and market conditions. They could also assist you with legal matters, or connect you with a good advisor/consultant. Moreover, they can better negotiate with the seller on your behalf to match your budget.
Property Inspection
Many people, including inexperienced or unreliable real estate agents, may not stress it enough, but a detailed property inspection is critical. It could help uncover any hidden issues like structural or electrical problems, resulting in costly repairs later. You can use such issues, if found, for negotiation on repairs or pricing, ensuring fair value.
Moreover, property inspections are also useful to verify legal compliance with local regulations, reducing potential legal risks for buyers. Therefore, make sure you get the property you like properly inspected. It will also give you peace of mind, confirming the property is safe and worth your money.
Financing Options
There are certain aspects you might not be told when buying property in Dubai, but they are crucial for making informed decisions, especially if those are related to financial aspects.
Dubai’s property prices are majorly influenced by location, type, and prevailing market conditions. It is a challenge to purchase a property while managing an expensive lifestyle. In such cases, the solution could be to explore different financing options. However, not everyone is aware of all the available options, and even fewer can offer personalized advice. For example, few people will tell you that shopping around for mortgages is essential to securing a competitive interest rate, which can save you a significant amount over time. Therefore, make sure you connect with multiple lenders and learn about the interest rates, eligibility requirements, terms and conditions, and other hidden fees.
How Much to Spend on a Mortgage
Often, people take out mortgages but they struggle to meet their monthly payments. The reason is that they do not assess their income and current debts before taking out the mortgage. One way to do that is by considering the mortgage-to-income ratio. A general guideline is the 28% rule: your monthly mortgage payment, including principal, interest, taxes, and insurance, should not exceed 28% of your gross monthly income. For example, if you earn $10,000 per month, your mortgage payment should be no more than $2,800 (10,000 x 0.28). Keeping payments within this limit helps ensure that the mortgage remains affordable and manageable.
So, compare various mortgage rates and maintain a healthy credit profile. Doing that will not only help you mitigate financial challenges, but also manage the financial demands of property ownership in Dubai.
Conclusion
Buying a house in Dubai requires planning and professional assistance for a sound and profitable outcome. Otherwise, there are chances that you may end up facing unexpected obstacles, and ultimately, financial losses.
People who have successfully purchased a property in Dubai may also be a good source of information but do not rely on them solely. Invest time in researching for the best realtor in town, get legal as well as financial consultation, ask for referrals, and carry out detailed research on the available properties.
One thing you can bank on is a seamless transition to the new place! For any local moving in Dubai, you do not have to stress over all the packing hassle nor the transportation of your furniture, appliances, and other items. To hire top-notch movers, simply visit the ServiceMarket website, and get experienced professionals to do all that for you.
