Real estate in UAE

The United Arab Emirates is attracting more and more foreign investors to its real estate market due to political stability and developed infrastructure.

The largest centers of the UAE real estate market are Dubai and Abu Dhabi. Large-scale residential and commercial real estate projects are being implemented here - from high-rise skyscrapers to artificial islands.
High standard of living, developed infrastructure and lack of taxes make the UAE an attractive destination for real estate investment.

Since 2019, foreigners have been able to purchase real estate in the UAE, but there are certain restrictions.

There are 4 main models of property ownership for foreigners:

• "Ownership" - ownership for 99 years with the option to sell the property outright.
• "Usufruct" - ownership for 99 years without the right to change ownership.
• "Mustacha" - ownership for up to 50 years with the possibility of extension and the right to change ownership.
• Long-term lease - for at least 25 years.

At the same time, the land is not transferred to foreigners.

Thus, foreigners can acquire property in the Emirates, but with some restrictions in terms of area, conditions and tenure. This offers the opportunity to invest in housing, but UAE nationals still have priority.

In the UAE, only 30% of the population own their own property, so the rental market is very active. The wide range of rental apartments puts pressure on prices and makes renting relatively affordable for most residents.

The most affordable residential area in the UAE is Al Butina in Sharjah. In contrast, the most expensive neighborhoods such as Pal, Jumeirah Island, Emirates Hills, Dubai Marina, Al Raha Beach and Saadiyat offer a high level of convenience, but the cost of housing there is extremely high.

Rental costs for apartments:

• 1-bedroom apartment in the city center: AED 1,894 - AED 24,656
• 1-bedroom apartment outside the city center: AED 1,022 - AED 18,312
• 3-bedroom apartment in the city center: AED 3,119 - AED 15,000
• 3-bedroom apartment outside the city center: AED 2,388 - AED 10,000

Price per square meter (10.7 square feet) when buying an apartment:

• Price per square meter in the city center: AED 5,234 - AED 19,375
• Price per square meter when buying outside the city: AED 4,611 - AED 10,763

These figures show a variety of options for renting and buying apartments in different parts of the country

Location. When choosing areas to buy property in the UAE, give preference to those with good infrastructure and amenities, such as waterfront locations and neighborhoods like Dubai Marina.

Market analysis. Studying statistics, analyzing current trends and new projects are important steps in finding bargains when buying property in the UAE.
Tenure. The decision to buy or rent a property depends on how long you plan to stay in the UAE and also affects the return on investment.

Affordability. When assessing the value of a property, you need to consider not only the price but also the maintenance costs.

Rental income. For successful investments, it is important to assess the potential rental income, which is usually between 5% and 9% per annum on the value of the property.

The possibility of obtaining a residence permit. If you buy a property in the UAE worth AED 1 million or more, you have the option to apply for a residency permit.

There are two main ways to purchase a property in the UAE: from a private seller or by buying an off-plan property from a developer.

Buying from a private seller:

• Agreement of terms and conditions between buyer and seller.
• Signing of a Memorandum of Understanding, which contains the terms of the agreement but is not legally binding. As a rule, a down payment of 10 percent is made.
• If necessary, the buyer can take out a mortgage.
• A transfer of ownership takes place, where the buyer is obliged to pay the full price of the property.

Off-plan bying:

• Completion of a booking form specifying the terms of the contract, the personal details of the buyer and seller and the payment terms.
• Conclusion of a binding purchase contract after payment of a deposit of between 5% and 20%.
• If necessary, the buyer can take out a mortgage loan.
• Handover of the property documents at the developer's office, with payment of the full price of the property.

When buying a property in the United Arab Emirates, the first step is to select a property and agree on a specific price. This is usually followed by the signing of a contract, which helps to set favorable terms and avoid possible misunderstandings in the future. The real estate transaction itself only takes 30 days from the signing of the purchase contract to the completion of the sale.

For a successful real estate purchase in the UAE, it is important to consider some important conditions. Firstly, a Memorandum of Understanding must be signed, which also stipulates the amount of the deposit. The amount of the deposit may vary depending on the value of the property, but generally a deposit of around 10% of the total value of the property is expected. The following documents are required to initiate the purchase process:

• A valid passport
• Proof of residency status confirming your residence in the UAE.
• A document proving your current residential address.
• A salary certificate or proof of permanent income.
• A bank statement confirming that you are financially able to make this investment.

Foreigners residing in the UAE can apply for a mortgage loan to purchase a property, but there are certain restrictions:

• The down payment must be at least 20% of the value of the property. For UAE nationals, the minimum down payment is 15%.
• The down payment also includes commissions and fees in connection with the purchase of the property.
• The maximum term of the mortgage for foreign nationals is 25 years. The term is longer for UAE nationals.
• The mortgage interest rate for foreign nationals is also higher than for UAE nationals.
• At the time of applying for the mortgage, you must prove that you have been living in the UAE for at least 6 months.
• You will need to provide a certificate of employment and documents confirming your income.
• The bank will carefully check the borrower's creditworthiness and ability to pay.
• Life insurance and insurance for the purchased property are required.

A mortgage in the UAE for foreigners is therefore possible, but is subject to stricter conditions than for citizens of the country. When planning a purchase, it is worth checking the banks' requirements and financial possibilities in advance.