With a thriving residential and commercial property market, real estate in Dubai has seen an ongoing growth. The Dubai property market is very different to other markets in the world; so it’s important you make sure you have a reliable and experienced agent to guide you through the process.
Rising rents and a sound property market have made buying residential property and commercial property an increasingly attractive option for expats in Dubai.
Check out our property guide to view the purchasing process at a glance.
The purpose behind the purchase.
Why are you buying? Buying an off-plan property to move into yourself is a very different scenario to buying it as an investment for resale or to let. The reason behind your purchase will determine the type and the location of the property you should consider.
If you are buying for investment purposes, then you will be ultimately renting the property; so you would need to look out for the kind of residential property or commercial property that offers the highest rental yield. For instance, one-bedroom apartments offer higher yields than large villas; so while the lure of owning a villa in Dubai may be tempting, it would make more business sense to purchase an apartment.
The purchasing process.
The first step involves making a verbal offer to the seller. Once this is accepted, a formal contract is drafted; a deposit is made, the buyer obtains financing, the seller ensures that the terms are catered to, final payment is made or in the case of mortgages a payment plan is finalised and the deed transferred.
The process may differ slightly depending on whether one purchases an off-plan property or a resale property from a private seller.
Purchasing off-plan property
When purchasing off-plan property, you will need to submit a completed reservation form alongside your passport. The reservation form summarises the terms and conditions of the sales agreement, payment plan details and personal details of the buyer and seller.
Following this, a reservation deposit or what has been otherwise stipulated is paid and the sales and purchase agreement drafted. The purchase agreement will include the property’s completion date and compensation that will be awarded if the property is not completed within the stipulated period.
Once the buyer transfers the deeds, the purchase property is completed. This is done at the developer’s office in the case of an off-plan property or at the Land Department if the property is already registered.
Purchasing resale property
If purchasing from a private seller, the buyer and seller agree on a Memorandum of Understanding (MOU), a document that outlines the terms and conditions of the agreement. The MOU also details the date of the final transfer of funds from the buyer to the seller and is not binding.
The buyer then pays a deposit, usually amounting to 10 percent of the property price, or what has been negotiated. This amount is often non-refundable. Once finance is obtained, the formal transfer of deeds takes place.