The real estate market in Dubai has seen years of unparalleled growth and expansion in recent years. A market that was completely dominated and dictated by sellers has started to cool down and now buyers being the one’s who are in the driving seat.

Before purchasing any type of property there are a number of things that need to be considered such as the type of property, the developer and the type of market. Below you will find information that is the bare essential you should know before making any decision.

Types of Properties in Dubai

Residential dwellings can be apartments or villas. They are the most popular type of property and can be bought as an investment or as a home. In recent years the yields for such property have fallen below 10%. Projects with both commercial and residential space are referred to as mixed projects.

Commercial

Commercial properties can be used for income generating means such as shops or restaurants. Commercial properties have seen their popularity rise drastically as in recent years the yield for them can range from 12% to 17% depending on location.

Warehouse

Warehouse spaces offer a great opportunity for larger investors. They have a high yield and show signs of growth in the coming years. Due to lack of warehouses in Dubai companies have been forced to store goods in facilities as far away as Ajman.

Labor Accommodation

With the construction boom came a large influx of labor class workers to Dubai which resulted in the demand for labor accommodation. The increased demand coupled with the WTO regulations, has caused prices for labor accommodations to skyrocket nearly 500% in 4 years. While the yields for such property have fallen they are still upwards of the 20-25% range.

Staff Accommodation

As with labor accommodation, staff accommodation exists to cater to demands of expatriates workers working in Dubai. Staff accommodation is more upscale as compared to labor accommodation and has different regulation in terms of number of people per room.

Off Plan

With the rising demands for property in Dubai a number of off-plan properties have flooded the market. Regardless of it being commercial or residential, detailed research needs to be done before investing into off-plan properties. 

Knowing the details such as who the developer is very important as many times the end result is not reflective of the pretty models that were displayed in the booking office or brochures. Many buyers have been disappointed in the past with long delays in construction and it is not surprising to see a property such as this change hands 4 to 5 times during construction.

Payment Plan

Most of the off-plan properties are sold with a payment plan. Payment plans conforming to RERA regulations are based on construction milestones. While some buyers are able to negotiate a higher payment on completion, most plans follow the numbers given below:

·         10% on signing 

·         10% Completion of shoring/piling

·         10% Completion basements

·         10% Completion of 5th/7th Floor

·         10% Completion of 15th/17th floor

·         10% Completion of 35th floor

·         40% Completion

In order to buy property in the primary market in Dubai a deposit of 10% of the buying price is required at time of contract signing. Other payments are based on construction milestones which is a government regulation. These plans can vary from developer to developer. Generally the primary market is a subset of the off plan market.

Secondary Market in Dubai

It is also possible to buy property directly from the developer once the project has been completed or any time after that. Owner’s are at liberty to set a premium which the buyer will have to pay in addition to the actual price. Transfer fees are also borne by the buyer.

Completed Market in Dubai

The completed market in Dubai has seen the greatest demand as buyers want to physically see the property before releasing their money. 100% payment is required for properties that have been completed. All transactions have to take place at the land office. The general procedure is outlined below.

Step 2 – Buyer and seller have to go to the Land Department to execute the transfer. Documents required are:

·         NOC from developer

·         Title Deed of property

·         Memorandum of understanding

·         Passports of buyer and seller

If a company is involved in the transaction then the original company documents along with power of attorney or board resolution is also required. The office is open from 8:00am to 1:30pm during the week.

Step 3 – Buyer pays the remaining balance to the seller. An additional transfer charge equivalent to 2% of the selling price plus 315 AED is required in the form of a manager cheque or cash. Only RERA approved brokers will be permitted in Land Dept transactions.

Step 4 – The completion of transfer certificate and title deed can be collected from the Land Department in 7 days.

Properties whose title deed is not ready cannot be transferred. Please check with developers for off plan sale and purchase possibilities.