Dubai Dreams: An owners experience of buying, owning and selling property in UAE
Dubai's Property Market - The Facts
With the passing of 2002’s Freehold Law in Dubai, it became possible for the first time ever for foreigners and ex-pats to buy, sell and rent property in Dubai without any special regulations or permissions.
This prompted a huge off plan property boom, as buyers took advantage of the new rules and developers forged ahead with iconic new projects such as Palm Jumeirah, The World, Burj Khalifa and Emirate Hills. During 2002-2008 the bull market saw property prices rise by as much as 400%, along with a huge hike in rents and a surge in lending to the construction companies.
As with all property cycles however, there are ups and downs. The global credit shock of 2008 spread to Dubai and lending ended as properties crashed by a third to a half of their highest values. The ‘wild west’ mentality that had prevailed saw people lose tens of thousands of dollars as massive housing projects were moth-balled or scrapped altogether.
In the decade since, Dubai’s real estate market has undergone a major overhaul as it matures and develops in line with the cities growth. The creation of the Real Estate Regulatory Authority has led to hundreds of unlicensed real estate brokers exiting the market along with tighter cash flow discipline for property developers enabling protection and recourse for buyers.
This has in turn led to restored confidence in Dubai’s property market, as the industry has become more robust and stable.
We spoke to Alliance member, Rebecca Porter, who has been through the whole process of buying, owning and selling in the Emirate and has come out the other side!
Dubai Dreams - an owner's story
“We fell in love with Dubai on our first trip back in 2006 and knew it was a destination that we would be visiting at least twice a year, especially in the gloomy winter months of the UK.
When we first started looking for a property, we found the prospect quite daunting as we had no idea about the laws or process of buying a property in the UAE. We needn’t have worried, it was an easy process and although the customer service from the estate agent was sometimes questionable, the actual process of purchasing a property was relatively straightforward. There was no waiting for solicitors to get back to us, no land registry searches (being a brand-new city) and at the time, no taxes to pay which was a breath of fresh air in comparison to the lengthy and costly process of buying in the UK.
Only 7 hours on a flight from London, Dubai was the perfect place for some much-needed winter sun. Glorious days of 25c in December and balmy nights enjoying the best food at the newest restaurants. We were spoilt for choice. Each month Dubai launches new hotels, restaurants and tourist attractions so it was always exciting knowing that on our next trip over there would be new places to discover.
One of the other key attractions for us initially buying in Dubai was that rental yields were as high as 12%. and when we were not using the apartment for ourselves, we rented it out as a holiday let. We used a local estate agent that offered property management services and we never had more than a month when the apartment was not occupied.
The process of renting in Dubai is quite different from the UK as tenants are expected to pay their whole rent up front – either by one or two cheques which gave us peace of mind that we would always receive the rent on time. The property management company collected the cheques for us, deposited them into our UAE account minus their charge and we would then transfer the Dirhams back into Sterling using foreign exchange specialist, Clear Currency, who gave us great rates and no hidden costs.
If you’re buying to rent you should be aware of the potential rental yields. You can get information on the market by looking at websites such as propertyfinder.ae and dubizzle.com. You should look for a property management company that has good local market knowledge and you can see that they have similar properties on their listings, therefore have an understanding of realistic rental yields.
We had plenty of years enjoying our holiday home as did our children and grandchildren but after 11 years of owning our property, we decided it was time to sell and look at other destinations as winter holiday homes.
When selling your property in Dubai you either need to be there in person to sign away the title to the buyer or sign Power of Attorney to someone to do this on your behalf. We were unable to travel for health reasons and friends of ours recommended a company called Domain Conveyancing. They organised the Power of Attorney which was then notarised and attested at the foreign office and the UAE Embassy by their solicitors. This worked out at a cost of roughly £ 1,700 which although not insignificant it saved us a lot of time and hassle.
We put our property on with two estate agents and within two weeks had an offer! Although the offer was slightly lower than we had hoped we decided to accept.
It’s common to put your property on with more than one estate agent. Most estate agents will try and get you to list your property with them exclusively but it is very common to use more than one estate agent at the outset. 80% of the population is expat so you don’t need to seek out a ‘specialist’ agency – but do try to find an estate agent that has good local market knowledge and has been established in the region for some time.
If in doubt look for an agent who is an AIPP member by using the button at the top of this page or go through to the website at aipp.org.uk.
As with any property transaction you need to be aware of market movements. The property market is challenging right now and sellers will take a deal providing it’s the right price in the local currency.
Although we got a lower price on the property than we had hoped, we managed to make it up on the exchange rate as Sterling had taken a dip of 11% at the time and we secured that rate with Clear Currency who got our funds safely back into our UK account the next day.
We’re now taking our time and exploring where our overseas property journey will take us next – possibly somewhere mountainous for complete contrast.”
Our thanks to Rebecca Porter for her article. Got an ownership story to share? Please get in touch, email email@example.com. We’d love to hear your experiences!
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