Important information you need to know
Who can buy freehold property
Anyone can. The introduction of the freehold property law in 2002 entitles anyone to purchase a property with 100% ownership; however, this is restricted to property that is specifically designated as freehold. Given the large amount of projects being undertaken, this is quite a selection.
Are there any recent developments in property law?
Yes there are. Most recently, 2006, the government passed an updated property law that allows expatriates to register their freehold properties in their names. This is great news for investors who have faced uncertainty with regards to government protection of freehold property rights.
Why buy property in Dubai?
There are a number of reasons. The majority of people pursue freehold options because of the rising costs of renting accommodation in Dubai. By investing in freehold property, money that was once used to pay the rent can go towards the ownership of a property. The cost of buying freehold property is below other busy cities. Although property prices have increased since the introduction of freehold property, there is still a massive gap between other popular business hubs such as Singapore and Hong Kong. With tourism continuously on the rise, it is a viable option for frequent visitors to buy property here as the rates are competitive with holiday homes in other countries such as Spain or Portugal. Furthermore, freehold property investors can apply for a residency visa that includes family, giving people the ability to retire here or make this a permanent home.
Are there any taxes involved?
Investment in Dubai freehold property is currently completely tax free.
What about arranging finance for a freehold property?
Sorting out a mortgage is very straightforward, even more so now that a variety of international banks offer financing in addition to local financiers associated with the developers. There is a wider choice of mortgages available with competitive interest rates and many banks offer shariah compliant options as well. Mortgages are available from 5 to 25 years, with fixed long-term repayment options and various fractions of the property cost cover
What banks are offering loans at the moment?
At present, freehold finance is being offered by Amlak, Tamweel, HSBC, Mashreq Bank, Rak Bank, Dubai Islamic bank, Abu Dhabi Commercial Bank and National Bank of Dubai.
Is a local bank account required?
No, the evolution of the market now caters better for investors that are not living in the UAE or do not have banking facilities in the country.
What about capital growth and the yield on rentals?
The market has seen a significant amount of growth over the past few years as more and more properties have been completed and entered the market. Premiums on properties have varied across the board, with major developments such as the Palm Dubai seeing several hundred percent premiums! A major concern with some projects has been the quality of the build and several developments have received numerous complaints with regards to this. Overall the standard of quality is variable, and as the market is so new there are expectedly some cracks in the procedure. As rental options are thin on the ground, yields on renting are relatively good at between 8-10%, and seeing predictions of an increase in rental rates, the market looks to remain healthy into the future.
What about the infrastructure surrounding freehold areas?
The general concept behind all major freehold developments is good infrastructure. The facilities and amenities that are to be included in property developments will meet the same or better standards than rental properties that are currently available. With the ongoing construction of the metro system to reach out to freehold areas, and various developments planning to offer self-enclosed transport services, these should provide good alternatives to driving or taking taxis. Developments that have already been completed such as the Springs and Meadows have a number of leisure facilities, they are located in close proximity to entertainment and shopping facilities and a selection of schools have been opened in the district.
Comments(0)