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Today, many people buy real estate in the United Arab Emirates or are considering buying it. Approximately 50% of buyers are interested in investment earnings, 30% are planning to move to the country and need housing, 20% purchase properties for business relocation, obtain an Emirates ID, and open bank accounts. How to invest in the UAE projects? Where are the most promising areas for buying flats with a sea view for expats in Dubai? Is it worth paying immediately, or is it better to take an installment plan? Let's have a closer look at these points.
Is real estate in the UAE so attractive to investors?
For investors, the main advantage is high profitability and no taxes for individuals. The only buy-in fee is to the Land Department, which equals 4% of the purchase price in Dubai and Abu Dhabi — 2%. There are no taxes on both the sale and rental of housing. Of course, interest-free installments are essential for investors. The threshold percentage of the total property price, which must be paid for resale, is 20% in Abu Dhabi and 30-40% in Dubai. This investment strategy is called "flipping," where income is generated due to price increases during construction. The installment plan allows you not to pay the entire amount at once but to make calculations following the payment plan and resell your property when the buyer considers it profitable.
Therefore, investors can purchase entire floors or buildings. This is what every tenth customer does: buying a floor has an average check of $5-7 million consisting of 10-14 apartments of different sizes with a significant discount. To purchase a floor, you need to pay 10% of the total price and a contribution to the Land Department, and after about a year, you need another 10%. Total investments will amount to about $1.5 million, but resale by the piece will bring a net profit of 20-40% of the original cost. Considering that you can wait to pay the total price immediately, but only after 3-6-12 months, against the growing demand for real estate in the UAE, you can do this quickly with minimal investments. However, it would help if you also were prepared for the risks of flipping: a property for resale may be delayed for various reasons – for example, due to the poor infrastructure in the area — and it will be too early to resell housing: its value will increase slightly. You will have to make another payment.
When is the best time to resell — before full development?
According to experts, purchasing a property a year before its delivery is best. This is the most effective — its cost is increasing, and demand is growing. However, there are also projects where options can only be found when reselling. Starting sales is like a lottery – under certain conditions, you can buy apartments that will be sold many times more expensive in a week. Infrastructure nuances can influence the rise in housing prices: for example, the location of Creek Harbour is promising, but future prices depend on the timing of the construction of the world's tallest new tower, Dubai Creek Tower. Anyone who invests in this location understands that the dividends from the purchase and resale will be no earlier than 2027-2030. If this does not happen, the area will be attractive, and the demand for real estate there will be high.
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What other areas are promising for buying real estate?
The area or emirate where you want to purchase a property depends on your goal and the desired investment period. Each has its land tax, which can help you save significantly with the right approach. In addition, a joint choice with a qualified broker will ensure fewer problems with the sale of your property in the future due to the hidden prospects for the development of the areas.
With the marketing hype created by developers in the UAE, apartments are quickly sold out. And that's right: you must understand that purchase decisions must be made promptly. Otherwise, the offer loses its relevance.
If an investor buys an apartment, how much can he earn?
Experience shows that an investor can earn a lot. However, some experts did not believe in such areas as District One in Dubai, and housing prices there have increased four times. Therefore, you either need to be able to select a location with a view to future development or work with a competent broker who can justify the price dynamics.
Many buyers think that brokers are unnecessary in a deal with the developer, but the world community believes otherwise:
● Only brokers know all the hidden currents, prospects for the development of the area, and legal features of the transaction in the finest detail.
● The developer offers a limited number of projects. However, brokers work with all developers and offer clients a wide range of independent expertise.
● To navigate the UAE market, you need to know about all the new options, have contacts with developers, attend their private meetings, find out details, etc. Entrust this to a professional broker — and you are guaranteed to be in the mainstream trading.
Some say that the market in the UAE is overheated, but this is far from the case. It will only grow. As statistics show, each subsequent peak in real estate prices is higher than the previous one, and the maximum is expected in 2024-2025. The UAE is developing on a large scale, and one of the main revenue streams is the return on real estate investment. Therefore, the worst–case scenario for the development of the real estate market in a few years is a drop in demand — the state will not let everything take its course.
The country is attractive in business development and has a low tax burden. The UAE has been developing conditions for involving business and tourism over the past five years, and it is taking significant steps to adapt and soften immigration rules to attract private capital and talent.
How to buy an apartment with the help of a broker?
The purchase process is divided into several stages:
● Brokers book an apartment, pay about $10,000 for this process, and then the initial payment, allowing the transaction participants to sign a contract afterward.
● After this payment, the client and his broker receive an official statement from the developer and a purchase and sale agreement, which the client must sign.
● The developer registers the contract by providing the original to the client with an electronic document on ownership — OQOOD or Title Deed.
● Brokers insist on payment only after registering the contract with the Land Department. Only after confirming the registration can the client pay 100%.
Brokers can collect and provide all documentation and control payments and processes at all transaction stages. They need to be the embodiment of their buyer's interests. His work is rather essential and aimed at the best result. Trust the professionals; you will be happy choosing the best real estate in the UAE. Visit Emirates. Estate as soon as possible to pick up the perfect property with the help of a professional broker.