There are many reasons for people to reside or move to Dubai. It can be the convenient and comfortable lifestyle, the robust economy, or the all-year-round sunny weather. If you are planning to settle in Dubai for more than 3 years, it is recommended for you to buy a property instead of rent any property.
In 2002, Dubai’s crown prince issued the Freehold Decree. This is a formal legislation that allows expats to buy, sell, lease, or rent property at their own discretion. The purpose of this decree is to increase the number of international investment and to make the UAE as a global hotspot.
Since then purchasing a property has become easy and profitable for any expats. With the high rental cost and stable property market in Dubai, buying property in the gulf country has become an attractive option for many expats.
It is important to determine your reason for buying property if it is to reside or to do business. This factor affects the type of property that you must purchase. If it is for business, it means that eventually the expats will be renting out the property. Hence it is necessary to research on the type of property that produces the highest rental yield. For instance, the one-bedroom apartment has a higher yield than villas.
For an expat to purchase property in Dubai, he or she must be over 21 years old. The first step in the process is to have a verbal offer to the seller. When this is accepted, a formal sales contract has to be drafted and agreed upon by the parties, and deposit has to be made. The buyer acquires financing while the seller makes sure that the property does not have anything that is against what has been stipulated in the contract. Final payment is made after this step or the payment plan is solidified. After this, the deed is transferred. It is important to note that oftentimes an expat will be required by the seller to be pre-approved for home financing before the signing of the sales contract.
Getting a Mortgage
It is possible for expats to get a mortgage from lenders that operate within the UAE. However, there are some restrictions to face. The UAE Mortgage Cap Law requires all non-UAE nationals to give a cash down payment of at the very least 25 percent of the property value plus all the associated costs in purchasing.
Expats are required to submit the following requirements for them to acquire a mortgage: passport and copies, proof of address, proof of residence, salary certificates or evidence of regular income, and bank account statements for a period of three to six months.
Mortgages have to be paid back in monthly installments, and 15-year plans are the most popular option. The maximum length of a mortgage plan in Dubai is 25 years.
For advice and guidance with regards to purchasing a property in Dubai, trust the experts. HBS Real Estate offers the most complete solution from consulting to management. Contact HBS Real Estate today!