Moving to a new country can be a daunting experience. Rules, regulations & general processes can differ greatly all around the world. The most important part of your move would be finding the right place to live. Dubai has been an investment hub for many for over ten years now and with the economic crisis from 2008, people coming and going, changes in law in regard to your rights as a landlord, tenant and/or seller and the general market conditions it is difficult for property owners to keep informed especially if they are not a resident of Dubai.
Dubai is now recognized as a very important hub in the MENA region, why is this? Well, there are many reasons but in short, with the economies now booming in MENA and Asia and with the still current economic conditions in the west more and more companies and looking to ‘setup shop’ in Dubai as it’s a central location to both MENA and Asia. Dubai has been identified by the majority as an ‘easy’ place to operate with its good lifestyle and current tax free status. Of course it’s clear, for anyone who has visited Dubai there is much to offer and to all different types of people. Whether you are living here alone, as a couple or a family there is something for everyone. The weather, for the most part is good and mostly sunny, for this reason and the attractions, tourists flock here in their millions every year and people are relocating to ‘greener pastures’.
With the increase in companies operating in Dubai the demand for real estate is increasing greatly every day. We have seen over the past 2 years a massive rise in rental rates and selling prices and with this comes a more clear understanding of the issues that need to be addressed in the real estate regulations. There have been vast improvements in the laws over the past 3 years and as the demand grows the improvements continue. There is yet much to do in terms of controlling the market especially with the many speculator investors here buying property in cash and flipping. Laws are being put into place currently to control this issue therefore trying to promote real estate as an end user market which creates a ‘real’ market.
The main areas of interest in terms of where to live are Downtown Dubai, Jumeirah Beach Residence, Dubai Marina, Jumeirah Lake Towers & Emirates Living. Property prices and rental rates have shot up in these areas greatly over the past couple of years mainly due to the facilities available and ease of access. Downtown Dubai, home to the world’s tallest building and largest shopping mall is a favorite to the executives. Many of the expats working in the finance sector also live here due to its locality to the DIFC (Dubai International Financial Center) home to many of the investment banks. Dubai Marina & JBR, with its short walk to the beach is a popular area with the younger expats here in Dubai. JBR is the largest single phase residential development in the world containing 40 buildings including a few hotels. With its direct access to the beach and heavy retail both residents & tourists are abundant creating a healthy & vibrant atmosphere. Families moving here are attracted to the Emirates Living area. With its more suburban feel, community centers, mini malls & schools it offers all ones needs as a family. There are many other ‘up & coming’ areas now in Dubai that were previously derelict due to the crisis. Now these once derelict areas, such as Sports City, are becoming more popular to those looking to make a significant saving on rent but still remain close to their place of work.
Now, with such a buoyant market apparent in Dubai there has been an influx of real estate companies setting up here to reap the benefits of managing the thousands of transactions taking place. There are many companies to choose from but very few that you may feel comfortable dealing with and that you can trust. It is important to check their credentials. Are the agents/brokers registered with RERA? (Real Estate Regulatory Agency). Is the company registered with RERA? Are they specialists in the specific areas or do all agents deal with Dubai as a whole? Dubai is really too big for an agent to deal with as a whole. A good agency will dedicate an area to a broker and that way they eventually become a specialist in that specific location with a wealth of knowledge and strong relationships with many of the owners. This will enable the agent to not only help and advise with speed but to offer you the best deals in the market.
There are many details you may not know to ask for from the agent, especially if it’s the first time you’re buying or renting in Dubai and for that matter selling or renting as an owner. As a tenant, ask how the general processes work with regard to connection TV/Cable & water & electricity. Ask about Ejari and why it is necessary. Ask about renewing the contract for another year and how this is done. Rent is typically paid through cheques. The due payments are paid in the form of a post dated cheque. This is not typical in most other places around the world but this has become the market norm in Dubai so don’t worry when you hear this from any of the agents. Remember, the Dubai market is yet very immature and has a long way to go so don’t be surprised when you hear strange requests from authorities in relation to completing your transaction. The authorities here are working very hard internally and connecting internationally to make real estate regulations protect all parties as best as possible, this will take time. In terms of buying a property, globally this transaction is handled by lawyers once the deal is negotiated. Typically in Dubai this has not been the case and the agents themselves will handle the conveyance process and bringing it to a close right up to the transfer of the property. This causes concern as deposits are held by the broker and in the case of default by any party it can be difficult to claim monies back. There are now 3rd party companies that are able to then take care of the transaction post negotiations. We at ERE Homes use Emirates Conveyancing, established in 2007 have proved to have successfully assisted 1000’s of buyers & sellers complete their transaction with transparency and ease. They may charge from approximately $1500 to complete the deal but this cost is split between the buyer & seller. This will give you piece of mind and ensure there is no conflict of interest. The process can take anywhere from a few days up to 2 months, this depends on whether it is cash purchase & sale or whether it is a mortgage purchase & sale. When owners are looking to value their property for rent or sale they should scour the market both online and by calling various real estate companies. A great website to search on is Dubizzle which anyone looking to rent or sell has their property advertised. Both owners and real estate companies use the website to expose their properties. There are also valuation companies here but they are not really helpful unless used by banks for mortgage valuation. The best people in the market to speak to are the ones on the ground and doing the deals.
Dubai is flowing, buoyant and full of opportunity. Yes there are many hurdles, red tape and bureaucracy but we have to remember Dubai is new! With a new market comes some snagging but once this is done it will be force to be reckoned with.
This article is courtesy of ERE Homes.
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