Buyer’s Guide : How to buy an apartment in Dubai ?
Buying an apartment in Dubai can be a great investment. It has the potential to create value and become an important asset in your portfolio. You should ensure that you have all the necessary information before making such an investment, as it could significantly impact your financial future if done right.
Dubai is well known for its unique addresses, providing investors and renters alike with a flourishing property market. This mighty city has rightfully earned its status as one of the most coveted places to live in, thanks to reasonably priced accommodations, access to top-notch amenities, and a quality lifestyle that promotes personal and financial security. Aside from these perks, investing in Dubai presents a high return on investment (ROI) from housing units for sale. These are just some of the reasons why millions of people visit the city each year, with inhabitants hailing from over 200 countries. Those looking to capitalize on its real estate industry need not look further than its bevy of record-breaking skyscrapers!
What are Freehold and Leasehold Property in Dubai ?
When it comes to real estate in Dubai, buyers have the option of investing in freehold or leasehold property. They can either become the outright owner of the property, or rent it out for a predetermined duration. Freehold means permanent ownership, whereas leasehold conveys temporary rights for use and occupancy. Depending on individual needs and preferences, one can make a choice between these two options.
Dubai's freehold market is separated into two groups: those that are open to UAE and GCC Nationals only, and those accessible to expats and foreign investors. The law allowing freehold ownership was accepted in 2002, granting non-nationals the right to buy properties in specified freehold areas. This kind of purchase agreement includes both the property as well as the land underneath.
Flats for sale in Dubai usually present themselves as commonhold properties. This means that multiple investors own separate flats in a single building, and all contribute towards the upkeep of shared areas. This payment is known as service charges, which are collected by the building owner/developer. Commonhold apartments in Dubai have much the same appeal of freehold properties, allowing you to rent, sell and bequeath them without issue.
For those searching for homes in Dubai, the top freehold destinations are Palm Jumeirah, Downtown Dubai and Dubai Marina. If you're seeking something more economical, try Jumeirah Village Circle (JVC), Town Square, International City or Liwan. Deira, Al Qusais, Al Nahda and Dubai Silicon Oasis are beloved amongst UAE Nationals and GCC citizens.
Leasehold properties, sometimes known as long-term leases or usufructs, are sold under lease terms that can last from 10 to 99 years. These properties cannot be acquired outright and must be leased from either a UAE or GCC national. When the lease expires, ownership of the purchased property is returned to the freeholder. These types of deals are generally available in areas such as Deira and Dubai Silicon Oasis which have been set up specifically for GCC and UAE nationals but are also open to foreign purchasers.
The government sets the boundaries between leasehold and freehold areas, which can be altered at any given time.
Which are all types of apartments to buy in Dubai ?
Dubai is an amazing city with a wide range of apartment styles available. From luxury penthouse apartments with stunning views, to more modest studio apartments, there's something for everyone in this magnificent metropolis.
When it comes to buying property in Dubai, tenants and investors alike have a wealth of possibilities to pick from. There are the conventional flats for renters, as well as more ambitious alternatives such as duplexes, lofts and posh penthouse units for those investing.
If you're looking for something more affordable, check out off-plan flats in Dubai. These units are sold from the developer before they're even built, on a flexible payment plan with lower downpayment than what you'd usually pay for secondary market properties. Popular areas for this type of investment include Downtown Dubai, Akoya Oxygen, Meydan City and Mohammed Bin Rashid City.
If you're considering investing in Dubai's residential properties, there are a variety of options to pick from. The apartments on offer range from studio size to five-bedroom apartments, with prices ranging between AED 160k and AED 58M. Each apartment has amenities including a maid's room, laundry room, terrace or balcony and storeroom; while apartment buildings boast facilities like shared gyms, pools, kid's play zones and covered parking. Luxury buildings come complete with additional features such as rooftop gardens, jogging tracks, sports courts and event spaces.
Apart from single floor apartments, there are unique duplex and triplex units across two and three floors of an apartment building. For those craving the luxury lifestyle, hotel apartments provide access to excellent amenities, while from those seeking the ultimate in indulgence, penthouses can be purchased. Moreover, some apartments in Dubai have been furnished with designer furniture from renowned brands like Versace, Fendi and Armani Casa.
Most popular areas to buy an apartment in Dubai ?
When looking for an apartment in Dubai, areas such as Downtown Dubai and Palm Jumeirah are some of the most sought after locations. These neighborhoods provide a plethora of options for those searching to buy a home in this vibrant city.
The most sought-after locations for apartments in Dubai are varied, ranging from lavish and luxurious abodes like
- Palm Jumeirah
- Downtown Dubai
- Dubai Marina
- The World Islands
- Jumeirah Bay Island
- JBR - Jumeirah Beach Residence
to budget-friendly neighborhoods like Al Mamzar, Dubailand, International City and Liwan. Town Square is also a highly affordable area to find flats.
Dubai Real Estate Market trends for Apartments and flats
It seems that the sales trends for flats in Dubai are changing rapidly. The demand for flats is increasing and prices are rising.
Studios in Dubai go for prices ranging from AED 160k to AED 2.1M, with the pricier ones situated in areas like Palm Jumeirah and The World Islands, while 1-bedroom flats cost an upwards of AED 239k in Dubailand which can reach up to 6M in The World Islands. With regard to 2 BHKs, these are available for more than AED 440k in Liwan and above AED 720k in Dubai Marina. Furthermore, the price of a 3-bed apartment starts at around AED 680k in Dubai Silicon Oasis and can soar as high as AED 58M in Palm Jumeirah. When it comes to 4-bed apartments, Business Bay is home to the most expensive one that's priced at AED 37M. Lastly, 5-bedroom flats for sale range between AED 2.1M and AED 45M with majority located at Downtown Dubai.
The return on investment for buying apartments in Dubai can be very rewarding. Purchases of properties here often result in high returns. Investing in apartments for sale in this area can be a very lucrative choice.
Dubai is renowned for providing strong rental yields to those looking to invest in the emirate. Among the areas offering the most attractive returns are International City (with a ROI of 9%), Dubai Silicon Oasis (8.2%) and Jumeirah Lake Towers (7.9%). Property buyers can also obtain decent rates of return in Downtown Dubai, Dubai Marina and Palm Jumeirah with all areas having an ROI of more than 5.4%.
How to buy an apartment in Dubai in 2023 ?
Buying an apartment in Dubai entails a few steps. Firstly, you should research the properties available on the market and narrow down your choices to the ones that fit your criteria. Next, you should arrange for viewing appointments to gain a more detailed insight into the apartments you are interested in. Finally, when making an offer on your chosen property, it's best to be aware of the procedures involved in making a purchase.
Investing in an apartment in Dubai starts with finding the property that suits your needs and budget. Zeekeez has a range of filter options to help you narrow down your search. Expats can purchase apartments in freehold locations regardless of nationality. Following selection, it is essential for both parties to draft, sign, and agree on terms for the sale via a Memorandum of Understanding (MOU). An initial deposit will be expected from the buyer, usually amounting from 5-25% of the value. After receiving a No Objection Certificate (NOC) from the developer, the Dubai Land Department (DLD) then carries out ownership transfer. If an investor is applying for financing through a mortgage, they must approach relevant banks.
What are additional costs whith buying an Apartment in Dubai ?
Purchasing an apartment in Dubai involves a number of expenses one needs to consider, Zeekeez advised you by sharing some tips. These costs may include the purchase price, registration charges, agents' fees, plus utility deposits and maintenance fees.
According to the DLD regulations, all buyers of property must pay a 4% registration fee of the property's value, regardless if it is ready or off-plan. In addition to the 4%, administrative fees may be charged and can reach up to AED 5k. The customary commission for a broker/real estate agent is 2%, however this can be discussed with your agent. If conveyancing services are employed, that fee applies as well and is generally 1% of the property value. Additionally, since the implementation of VAT in 2018, all charges previously mentioned are subject to a 5% VAT charge.
If you are thinking of buying a flat in Dubai, remember to take into account annual service charges. Prorated by the year, these fees are payable to the developer, who is regulated by the DLD in order to ensure both parties' rights are protected. Depending on the building's features and location, service charges vary between AED 10-45 per square foot.
Those looking to purchase an apartment in Dubai are likely to face a separate charge for the air-conditioning and cooling of the unit, which is typically handled by the owner and payable on a month-to-month basis. Emicool and Empower are two main suppliers of district cooling in the city. You can also think to rent an apartment in Dubai.