dubai marina
getty
With the US election just days away, many people are wondering if it’s time to flee the country, or at least invest in overseas markets. One of the hottest overseas markets at the moment is the United Arab Emirates, and real estate in Dubai is particularly attractive. But what is it actually like for foreigners to buy real estate there? Is the process that different in the US? Here’s what Americans need to know.
Dubai is one of the easiest places to buy property
Dubai is currently one of the most popular overseas markets for a variety of reasons. The lack of real estate, capital gains, and income taxes makes it attractive to many buyers, especially those from the United States.
There has also been a major construction boom, with luxury developments being sold off-plan. Buyers can easily get involved even before the property is built. According to Mary Lee, an experienced real estate investor and advisor with over seven years of experience, “off-the-plan projects typically require a 10-25 percent down payment, and the remaining funds are typically paid interest-free over a period of three to five years. Decentralized” Rich experience in Dubai market.
mary lee
mary lee
Lee emphasizes that the process is much easier than in the United States. “All you need is a passport, email address, mobile phone number, 4 percent Dubai Land Office registration fee, and down payment.The client can then proceed with the process and a Sales Purchase Agreement (SPA) will be issued. SPA Once completed, it will be registered with the Dubai Land Department.”
Resale of real estate is also less complicated as there are no lawyers involved. “Typically, a reservation contract is signed with a deposit of 10% of the property price. Once both parties agree, a No Objection Certificate (NOC) from the developer is required to proceed with the transfer. The transfer will be completed at the Land Department Trustee Office where the title deed will be issued by the Dubai Land Department,” explains Mr Lee.
Most buyers in Dubai pay cash, but it is also possible to take out a home loan. However, Lee said the term of the mortgage is usually shorter, typically 10 to 25 years instead of 30 years.
Like the weather, Dubai’s real estate market is hot
Having lived in Dubai for nearly a decade, Lee has personally witnessed the city’s evolution. “Amid the current global economic uncertainty, real estate investment in Dubai is relatively stable and safe compared to other types of investments. , is expected to remain strong with strong demand, driven by factors such as attractive rental yields of 5% to 8% and investor interest in luxury real estate and off-plan developments.”
An image of one of Lee’s properties, Banyan Tree Residences.
mary lee
Thanks to Golden Visa, which was founded in 2019, the market has flourished in many ways even after the pandemic.
James Prince, a Dubai resident and CEO of wealth advisory firm Prinden, says the program has changed everything. “This program gives people who own property the right to stay here for up to 10 years. This has changed everything and property values have increased two to three times since COVID-19. .”
Before this program, buying real estate was very risky. “I was advising clients not to buy here because the risks are too high. Other countries make more sense. There were some horror stories of people having to leave the country, they couldn’t sell their homes, and they ended up in jail.
Under the law at the time, foreigners were not allowed to leave the country with debts, including mortgages, even if they were renting a house. Restrictions have now been significantly relaxed, making it more attractive to foreign buyers.
Lee expects this situation to continue for the foreseeable future. “The Dubai government is actively developing its economy across various sectors and attracting companies from all over the world to locate in Dubai. As a result, the demand for professionals in various fields is increasing year on year. Masu.”
Dubai real estate ROI is higher than the tallest tower
Still unsure about investing in Dubai? According to Lee, the local property market currently offers some of the best returns on investment globally, thanks to a less restrictive short-term rental market compared to other countries. It is said that they are doing so. Unlike the US, where there are local ordinances prohibiting short-term rentals, Dubai is very welcoming to this type of investment. “Rental yields are typically in the 5-8% range, but short-term holiday homes can offer even higher returns,” she explains.
There are no guarantees in any market, but for off-plan properties, capital appreciation can reach 5 to 10 percent per year, she says. “From the start of construction to delivery, real estate values increase by 15 to 30 percent, with some regions experiencing 50 to 100 percent growth under the right conditions. This market is growing and offers high rental yields. However, it can be more volatile than the US market. This makes Dubai an attractive destination for investors looking for both rental income and significant capital gains.
Many of Lee’s past sales have increased in value significantly. “In 2019, I sold the entire building to an investor in Port de la Mer, Dubai, for 83 million dirhams. It is now worth at least 140 million dirhams. When I was 25 years old, I bought a small apartment in downtown Dubai for 1 million dirhams, which is now worth 2.2 million dirhams and earns 135,000 dirhams a year.
What is life really like in Dubai?
At its heart, Dubai is a cosmopolitan city that attracts people from all over the world. The Prince and his family from the UK are incredibly happy with everything this country has to offer, but admit there are some trade-offs. “We are still in a Muslim country, so we need to respect their culture and dress code.”
Although there are challenges, such as being far away from family, living in Dubai is worth it because of the low taxes, good schools, and high quality of life. “It’s literally the safest place in the world. Nobody steals anything. You can leave your wallet with money in it or your laptop on the dashboard of your car without blocking it. I leave it for a week and when I come back it’s still there.”
