Apartment Buying in Dubai Guide for Expats

Table of Contents

• Buying Dubai Apartment Trend
• Why Expats Buying Dubai Apartment Now!
  • Can Expats Buy an Apartment in Dubai?
• Legal Steps to Buy an Apartment in Dubai
  • 1. Buying Process
  • 2. The Legal Process
  • 3. Mortgage Process
  • 4. Admin Cost to Give to Dubai Land
• Analysis of Dubai Apartment Performance
• Conclusion

Buying an apartment in Dubai is often a complex step for first-timers and expats who don't live in the Emirates. Understanding how to buy an apartment in Dubai is daunting. But we at FazWaz UAE are here to help.  We'll simplify the complex task of how to buy an apartment in Dubai covering what you need to know from legalities to finding the right location. Let's explore our guide below; we'll walk you through every single step ensuring your home-buying procedure in Dubai is smooth sailing. 

Buying Dubai Apartment Trend

Buying apartments in Dubai is a growing trend as evidenced by a 12% increase in sales compared to Q1 2022 and a substantial 25% increase when compared to Q2 2022. This surge in interest is particularly noticeable in sought-after locations like Dubai Silicon Oasis, Jumeirah Lake Towers (JLT), and International City. These areas are favored not only for their modern living facilities but also for their strategic positioning allowing residents to avoid heavy traffic and making daily commuting more convenient. This upward trend in buying Dubai flats is more than just a passing phase; it's a reflection of the city's growing appeal as a place to live and invest. 

Down below you will find why now buying apartments in Dubai is very popular, particularly among expats. Alongside, we'll delve into the factors attracting investors and residents alike.

Why Expats Buying Dubai Apartment Now!

Expats are increasingly buying apartments in Dubai for several favorable factors. Here's why many are choosing to invest in Dubai's real estate market now:

• Long-term Visa Option: The introduction of long-term visas in the Emirates, including a 5-year retirement visa, makes it easier for expats to plan for long-term residence. This policy change opened doors for many foreign nationals providing you with the opportunity to settle in the country with greater security and stability.
  
  
• No Capital Tax and Property Tax: Dubai has a tax-friendly environment with no capital gains tax or property tax making buying property a financially attractive option. Besides, it lowers the overall cost of owning property and encourages local and international investors to enter the market.
  
  
• Safe Investment: Investments in Dubai are secure with a stable political climate and robust legal framework. Property values are steadily rising with an average increase of 6% in prime locations in the previous year. This strong growth reflects the ongoing development in the city and its position as a leading global real estate destination.
  
  
• Stable Currency Exchange Rates: The UAE Dirham is pegged to the US Dollar ensuring stable currency exchange rates and protecting investments from currency fluctuations. The currency exchange rate stability adds an extra layer of security for international investors making financial planning and investment management more predictable. Especially during uncertain economic times happening in 2023.
  
  
• Better Job Opportunities: The growing economy in Dubai offers several job opportunities in various sectors attracting professionals from around the world. The sectors growing and creating people's chances to find work and build careers comprise the finance, technology, and tourism industries.

Can Expats Buy an Apartment in Dubai?

Yes, expats can buy an apartment in Dubai with two options: freehold property and leasehold apartments. Freehold property allows expats to have full ownership of both the land and the property itself in designated areas giving them the freedom to sell, lease, or modify the property without restrictions. For example, areas like Dubai Marina and Jumeirah Lake Towers (JLT) often offer freehold properties. Marina Promenade, Almas Tower, Garden Homes, and Golf Views Seven City are examples of freehold apartments available in the respective areas in Dubai. 

On the other hand, leasehold properties means that an expat can lease a property for a long period, usually between 10 to 99 years, but the land remains owned by a local landlord. Leasehold is often found in areas like Deira—Port Saeed, Al Rigga, and Al Murar.

The main difference between these two options is the ownership of the land. Freehold provides complete ownership rights while leasehold only allows the right to use the property for a specific time. Both options, on the contrary, cater to expats offering different benefits depending on individual needs and investment goals.

Legal Steps to Buy an Apartment in Dubai

When it comes to buying an apartment in Dubai, you should pay careful attention to legal steps and property ownership laws. There are four essential legal steps below to buy an apartment in Dubai providing a clear path for homebuyers. 

1. Buying Process

Finding the right apartment in Dubai requires careful consideration of various factors. Here's a brief guide to help first-time expats navigate the buying process:

• Research and Choose a Property: You look for properties in freehold areas where you can own; consider location, budget, and amenities.
  
  
• Hire a Real Estate Agent: An agent familiar with the Dubai property market can guide you through the selection and negotiation process. For example you can contact our FazWaz UAE real estate agents.
  
  
• Decide on Payment Method: After choosing a property, you'll need to decide how to pay. You can either pay cash or apply for a mortgage depending on your financial situation and preferences. Some developers such as Emaar Properties and DAMAC properties allow for bitcoin payment. 

2. The Legal Process

Once the payment method is decided, you can move forward with signing the agreement of sale. Taking you one step closer to owning your new apartment in Dubai.

• Draft a Memorandum of Understanding (MOU) plays an important step when you buy property in Dubai. The MOU outlines the selling terms including the price, payment plan, and other specific conditions that you and the seller agreed upon. Both parties commit to the outlined terms by signing it. It is significant in the buying process as it marks your commitment to proceed with the purchase ensuring that both you and the seller are on the same page.
  
  
• Application for a No Objection Certificate (NOC) is obtained from the developer and ensures that there are no outstanding dues or charges on the property. It's a confirmation that the property is free from any liabilities and is clear for sale. Without the NOC, the transfer of ownership at the Dubai Land Department cannot proceed.

3. Mortgage Process

If you're looking to secure financing in Dubai, getting a mortgage is an essential step. Here we will show you a simple way to approach it:

• Determine Eligibility: Banks require residents to show identification, proof of address, and income statements to open an account or apply for a loan. Non-residents often need to provide a valid passport and proof of local employment, such as a work visa and a letter from their employer, to access the same services.
  
  

• Choose a Mortgage Plan: For expats who don't live in Dubai or first-time buyers, choosing the right mortgage plan requires a careful comparison of different banks and their offerings. For example, some banks may offer expat mortgages specifically designed for non-residents, which require a higher down payment but provide more flexible terms. First-time buyers might benefit from plans offering reduced interest rates or assistance with closing costs. You can find the best mortgage plan for your financial situation by meeting with a local mortgage consultant who understands the needs of expats and first-time buyers.

4. Admin Cost to Give to Dubai Land

Finalizing your apartment buying process in Dubai means you'll need to pay administrative costs to the Dubai Land Department. 

• Registration Trustee Fees: When finalizing the sale, buyers need to pay a fee to the registration trustee. This fee is typically 4% of the property's sale price plus an additional administrative charge. For land, it's AED 430; for off-plan properties, AED 40; and for apartments and offices, an admin fee of AED 580.
  
  
• Property Registration Fee: If the property's value is below AED 500,000, the fee is AED 2,000 plus 5% VAT. If the value is above AED 500,000, the fee is AED 4,000 plus 5% VAT.
  
  
• Fees for Issuing the Title Deed: This is a flat fee of AED 250 paid to receive the official document confirming your ownership.
  
  
• Agent's Fee: Typically, the agent's fee is 2% of the property value paid to the real estate agent for their services in facilitating the purchase.
  
  
• Finalize the Sale at Dubai Land Department: This step involves meeting with the seller at the Dubai Land Department to pay the remaining balance of the property's price. You'll receive the title deed confirming your ownership once the payment is made. This process ensures a legal and transparent transaction providing peace of mind for both parties involved.

Analysis of Dubai Apartment Performance

Dubai apartment market has seen significant fluctuations over the past three months. In May 2023, the sales value reached an impressive 18.67 Billion AED marking an 88.4% increase year-on-year with apartments accounting for 55% of all property sales. June continued the upward trend with sales of 17.40 Billion AED, a 39% increase year-on-year, and apartments making up 57% of sales. However, July saw a slight dip, with sales dropping to 15.82 Billion AED, a 4% decrease year-on-year, and apartments comprising 42% of the total sales.

Despite the decrease in July, the data clearly shows that apartments have been the top choice for property buyers in Dubai over the past three months especially among expats. The consistent majority share of apartment sales, compared to villas, plots, and commercial spaces, highlights a strong preference for this type of property. Many expats currently choose apartments as their preferred option likely due to factors such as affordability, availability of amenities, and the appeal of modern apartments living in a bustling city like Dubai. Besides, the numbers tell a straightforward story: in a market that occasionally fluctuates, apartments remain a favored option reflecting the lifestyle and financial considerations and making them particularly attractive to both locals and expats alike.

Conclusion

The recent trends in Dubai's property market clearly indicate that apartments are not just a current preference but also a promising option for the future. Apartments in Dubai offer a wise investment and a comfortable living solution with their consistent appeal to both locals and expats. If you plan to move or invest, now it is your opportune time to explore the vibrant apartment market in Dubai. You can easily press search for your apartment now and take a step towards securing a property with modern demands and future growth in this vibrant city.

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