Undoubtedly, you have heard Dubai referred to as the “Golden City,” and are interested in buying property for holidays in the Middle East. As a major hub in the region, you can stop in Dubai and go on to over 240 different countries, one of which is probably home. If you are a frequent traveller and would love a holiday home in the region, it may have struck your fancy to look at villas for sale in Dubai. Why not?
Dubai in the U.A.E. is one of the region’s most modernised cities with amazing infrastructure and so many trendy places to shop, eat and be entertained. In fact, a huge number of visitors come to Dubai at least once a year for the sheer joy of shopping here. Even so, before getting your heart set on real estate in Dubai, there are certain things you should be aware of before setting off on your quest.
1. The Purpose for Buying a Villa in Dubai
The first thing you need to ask yourself is why you are entertaining the notion of buying a villa in Dubai. If you are simply going to take regular holidays at your newly acquired villa, then that is one thing. However, if you are going to buy it as an investment property even though you will be using it in the interim, there are other factors to consider as well. For example, there are things you should know about buying property as an expat.
2. Buying Property as an Expat
It has only been within the past couple of decades that anyone who wasn’t a citizen could even buy property in Dubai. To compound the issue, no one is ever allowed to seek citizenship in the U.A.E. Since the year 2,000, the government has established certain areas where expats can, indeed, buy property and even gain permission to live there, but never as a citizen. It would always be under very special visa permissions. As a holiday villa, you could stay in Dubai for the allotted amount of time just don’t get your heart set on becoming a citizen.
3. Leasehold vs Freehold Properties
Here is where most foreign nationals can run into a few problems. The first thing to understand about the difference between leasehold and freehold terminology is that, just as the name implies, leasehold are those areas where expats can buy property. Freehold property is designated for citizens only. Therefore, whether you buy a villa for personal use or as a rental unit for other foreign nationals on holiday, you will only be able to buy in those areas designated “leasehold” and anyone wishing to rent real estate in Dubai, albeit on a temporary holiday basis, must rent in a leasehold area. Setting up real estate in this way was the government’s way of enabling foreign nationals to invest in the real estate market in the U.A.E.
4. Property Market Trends
This should come as no surprise. No matter where you buy property it is imperative to look at current and forecast market trends. Always ask the agent you are working with to provide historical data on rents, selling price comparisons in like properties, and the current rental trends on villas asking the rent you intend to charge for an acceptable ROI. Obviously, you wouldn’t really care about historical rents if you intended to stay there for personal use, but many expats rent the property out during those months they will not be in residence. This is a way of purchasing a luxurious holiday rental that pays for itself if the rents are high enough.
5. Various Fees & Charges Associated with Buying Property
Finally, don’t forget that with any real estate transaction, no matter where you buy property, there will be fees and other charges associated with the sale. Your agent can help you understand all the fees and charges involved, but the going rate for an agent’s commission in Dubai is 2 percent of the purchase price. Having said that, this percentage may be open to discussion if your agent is amenable. Also, some agents on key pieces of property may ask a higher commission, especially in regard to high demand locations. In addition to that 2 percent, all buyers must also pay 4 percent to the Dubai Land Department, and again, this is on the purchase value of the villa.
A Few Closing Thoughts
Perhaps the only area of concern may be being limited to certain leasehold areas of Dubai. Nonetheless, many of these areas have been developed with foreign nationals in mind. Even though Dubai’s infrastructure is the envy of the region, even greater care may be given to roads and public transport in areas of the city that see a high volume of visitor traffic. Don’t let the leasehold vs freehold issue discourage you from buying a villa in Dubai. You will find that the price is going to be lower than most luxury cities in the world and the standard of living is so much higher. Here you not only get what you pay for, but so much more as well.