Buying Guide Details
Buying property in Dubai & the Middle East
Overview
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Bright commercial and tourism prospects in many nations in the region
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Amazing choice of sometimes extraordinary property developments, and property prices in Dubai and the Middle East are generally much cheaper than in the UK and western Europe
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There are some restrictions to buying property in Dubai and the Middle east, though some of these are being relaxed
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High cost of living and high rents, but little or no income tax and low crime
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Year-round climate, though it can be extremely hot in summer
International property investors have been buying property in Dubai and the Middle East for the past few years in ever greater numbers. The emirate of Dubai has been the primary focus of property buyers’ attention, but there are certainly other destinations in the region that are worth considering. The United Arab Emirates is a federation of seven states, Dubai being perhaps the best known, though Abu Dhabi, Ras al-Khaimah and Ajman have started to follow their neighbours lead in providing property that appeals to overseas buyers.
Countries such as Kuwait, Bahrain, Oman and Qatar have been best known in the past as rather somewhat obscure commercial and industrial postings for expat Europeans. However, by freeing up some of the restrictions on foreign ownership of land and property, encouraging property development and promoting tourism, these nations have become much more interesting for anyone looking to buy a property as a holiday home or an investment. Increasing demand and a shortage of supply of new properties has increased rental yields, which makes the region even more of an investors hotspot.
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Choice
It sometimes seems that nothing is impossible when it comes to property in Dubai and the Middle East. In a bid to attract overseas investment, architects and construction companies have been allowed enormous freedom in creating their property developments. Some of the most audacious construction projects the world has seen have been undertaken in this region. Even if these headline-grabbing properties are not to your taste or budget, there are plenty of high-quality homes to choose from.
The vast majority of buyers will be looking for new or off-plan property in Dubai and the Middle East. Though there are traditional properties for sale in Dubai and the Middle East, there are a number of countries where foreign ownership is restricted to designated areas, invariably the brand-new projects that have been taking shape over the past few years. However, as more schemes are completed, there will be an increasing number of modern resale properties in Dubai and the Middle East. Investors looking to cash in on their home might well be prepared to negotiate on price with buyers.
It is difficult to exaggerate the scale of construction and the sheer variety of properties in Dubai and the Middle East that this is creating. Small apartments, luxurious penthouses, spacious villas overlooking perfectly manicured golf courses, waterfront properties on a vast marina, beachfront property – the list goes on. There’s a dazzling selection of property styles too, from designs based on tradition Arab architecture to Mediterranean-style villas and cutting-edge high-rise blocks, via everything in between.
The property you buy in Dubai and the Middle East will depend a great deal on your reason for buying. Pure investors should consider how the location and facilities offered by a property will appeal to potential tenants with an objective mind. Buyers looking for a holiday property in Dubai and the Middle East will make a much more personal choice about the type of property they want. Whatever your requirements, Dubai and the Middle East offers an abundance of property styles that few other regions can match.
Property market
Dubai was the first Middle Eastern country to embrace the idea of property investment from overseas buyers and it has the most mature property market in the region. It has seen some very dramatic price rises over the past five years. Property rental returns have also been good for those with completed property, and with demand currently outstripping supply, rents have increased quite substantially in recent years.
While average property rental yields in Dubai are around eight per cent per annum, in Qatar and Bahrain, due to an even more pronounced gap between supply and demand, average yields stand at around 10-12 per cent. Property owners in Dubai and the Middle East have also seen significant capital growth, estimated at around 25 per cent over the past couple of years.
As more projects are completed in the region, the property markets in the region will undoubtedly adjust. Anyone looking to buy now will be impressed with the figures over the last few years but should bear in mind that speculation and limited supply of finished homes have been major contributory factors in the region’s property price boom. With around 150,000 villas and apartments due to be built in Dubai alone over the next three years, investors should carefully consider the likelihood that the “boom” years might be coming to an end. As the resale market expands there will also be downward pressure on prices.
However, with the ambitious plans that some Middle Eastern states have to increase commerce and tourism, there is likely to be a sustained demand for quality property in some areas. And with prices still considerably lower than at home, UK property buyers might well consider a home in the Middle East as a good way to get a foot on the property ladder as a long-term investment.
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Homes Overseas Property Club
Homes Overseas has joined forces with a collection of IFA specialists to form the Homes Overseas Property Club (HOPC), designed for existing and prospective overseas property homeowners.
The Club – which has access to international lawyers in no fewer than 43 different countries - has been set up in order to guide people through some of the various issues relating to buying and maintaining a property overseas. It offers advice on a range of topics, including financial, legal, insurance, taxation, property management and foreign currency matters.
For further information please telephone 0845 838 7142 or email info@homesoverseaspropertyclub.com
The process of buying property in Dubai
Buying property in Dubai is now much more exciting than it was, thanks to a government announcement early this year that, for the first time, foreigners will be allowed to own freehold property in Dubai. Up to now, they have only been allowed to buy property in Dubai on a leasehold basis, and could not buy land, so this was welcome news. However, it is not yet clear when or how this new law will be put into practice.
To buy a new-build off-plan property, the process is easy. The buyer reserves a unit and pays an initial deposit – usually 10%. The remaining balance is paid in stages until the completion date. This varies depending on the developer and should be agreed at the start of the deal.
For resale property, once you have found a property, a holding deposit is paid until funds are in place to carry out the exchange.
Bear in mind that although Dubai is tax-free, you may find that you are required to pay taxes in the UK. Get a professional to guide you carefully through each step to make sure you know exactly where you stand.
Health
Anyone in possession of a valid British passport can stay in Dubai for up to 30 days without needing a visa. This can often be extended up to 90 days on request. Owning a property entitles you to become a Dubai resident, if you wish, but this is by no means compulsory
Visa/Residency
The standard of healthcare in Dubai is generally quite high. However, the emergency services are not as efficient as they are in the UK, and those requiring specialised treatment may find that they need to travel out of the emirate. Special care needs to be taken to avoid dehydration and those with respiratory problems need to be aware of the dry, dusty air. Foreigners can use public hospitals provided they have a valid health card from the UAE Ministry of Health, but many still prefer to go private
Top tip
Dubai has suffered slightly from a reputation for having shoddy building standards. While this doesn’t apply to a large proportion of properties, it’s definitely worth the peace of mind gained by having a full survey carried out by an independent professional.
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