United Arab Emirates » The Purchase Process

There has been a vast expansion in investor interest in Dubai real property in the last few years. People from all over the world are investing in the city. The prices are still comparatively reasonable with good upside potential. Buy as an investment, a weekend getaway, or as a primary residence. The Dubai market is going through a very vibrant phase and over the next 3-4 years will provide plenty opportunities at all levels. Dubai has also been lucky with its timing. Record low interest rates and dismal stock markets are good news for realtors. The Dubai government is behind the real estate boom, and has secondary motives such as attracting wealthy immigrants to the city; villas and apartments are being sold very cheaply.

• Guaranteed rental yields of 7% offered by developers.
• Mortgages and finance packages offered.
• Excellent Potential of emerging property market.
• Very high specification properties.
• No legal fees.
• No Stamp duty.
• No Survey costs.
• Cheap in comparison to global property prices.
• Growing GDP 7-8% per year (Population).

One way you can judge if real estate is cheap, or not is to look at the yield, or rental return. In the case of Dubai a basic yield of 10% on residential property compares with a 6.5% local mortgage rate. Now in London 3-4% would be considered a good yield today, so 10% implies a considerable undervaluation of property. Of course, an increase in the supply of property may reduce yields in Dubai.

The potential investor should be aware that the law is still a bit unsettled with regard to foreign ownership of real property in the UAE. While the Federal law doesn't prohibit the ownership of UAE property by a foreign national, to date, registration procedures have not yet been formulated. Developers are currently working with the Dubai Lands Department on this matter.