Where is Dubai located?
Dubai is one of the seven emirates that constitute United Arab Emirates (UAE) in the Middle East. It is located on the northeast coast of the UAE, situated in the southeastern corner of the Arabian Peninsula. Dubai shares its borders with Sharjah in the northeast, the Sultanate of Oman in the southeast and Abu Dhabi in the south. The Persian Gulf borders the western coast of the emirate.
It lies in the Arabian Desert and is situated on the calm, blue waters of the southern Gulf. The Dubai Creek is a natural inlet from the Gulf which divides the city into the Deira district on the north and Bur Dubai on the south.
Is Dubai European friendly or is there hostility?
Dubai is most definitely an urbane city. One can find a communion of different ethnicities and nationalities in Dubai. Most people have come to settle down here because of the great prospects that they have discovered or have been offered. Since the country is experiencing rapid growth, which is evident with increasing foreign investments and businesses setting up their offices here, it is established that Dubai is a very friendly city with almost every country. With many large-scale European establishments setting themselves in Dubai, it is proven that Dubai has no hostility whatsoever with Europe.
Not only are European businesses thriving, there is a growing number of European expatriate population who are relocating to Dubai and/or investing in real estate. Especially, with the newly created Palm Jumeirah Island and other massive real estate projects, a substantial population is of Europeans.
Why are Europeans opting for Dubai as a place to settle?
Dubai is growing with an escalating speed. It’s definitely making a great world presence and is creating a noticeable impact about its growth, prosperity and planning. No wonder, so many Europeans are opting to relocate, live and settle in Dubai to make the most of what it has to offer.
Though there are people moving in from many other countries, the number of Europeans settling down in Dubai is increasingly evident. It is not just that Dubai is fancied as a tourist destination for a one-off visit but it is also creating a want for people to revisit or settle down permanently.
For most Europeans who are settling down in Dubai, the reasons are plentiful:
- Dubai’s tax free options are highly irresistible. For most Europeans, while comparing the tax factor to their respective home countries, where taxes are quite high, working and living in Dubai is an inviting factor.
- The weather is also a major attraction for many. With no major seasonal changes, and the weather being consistent, adapting to the same is quite easy.
- There are a variety of dining spots catering to cuisines from all over the world and so Europeans will definitely not miss home on this front.
- Most supermarkets are well-stocked with food products from Europe and for people who relocate here, this is very helpful.
- Dubai has a very modern outlook, so there is no strict dress code.
- The shopping scene, bars, pubs and clubs are in abundance and so it is like a home away from home for Europeans.
- Europeans are allowed to swap their driving licenses for UAE licenses by paying the required fee. They don’t have to apply for fresh licenses or take new tests.
Why is Dubai real estate a good investment?
Dubai is fast becoming an economic, business, and traveling destination. With more and more people relocating to Dubai for business, employment, and leisure, the property market is going through a boom and investment in this sector is nothing but potential revenue.
The reasons why Dubai is emerging as a good investment opportunity are:
- In Dubai, investment in any kind of real estate property be it an apartment, villa, town home, or commercial complex is still a lot cheaper than in any other advanced country be it Japan, US, UK etc. This is mostly because of lower taxes, lower currency rates and better options and plans being available.
- In Dubai, the only major deterrent factor is the house rent, which is very expensive. So investing in a property is far cheaper than renting an apartment or a house.
- With more and more banks and mortgage firms offering mortgages or loans in Dubai, there are varied options for expatriates to seek for loans. Also, with more people opting for mortgages; interest rates are also going down.
- Dubai is all set to introduce a new law where even foreigners can own properties. Moreover, one can convert the present leasehold option to freehold option in which there is more concrete and assured definiteness. And with the introduction of this option, more people will invest in Dubai’s real estate.
- With rapid growth and expansions and with the growing number of expatriates and tourists, a space crunch is also looming in the offing, with the ratio of apartments/hotels to people not adding up. In trying to meet the demand, the real estate sector is growing.
- Dubai’s international presence is also a factor for increased real estate investments. People are recognizing the city’s importance in the international scene and its stupendous growth and are investing in major real estate ventures.
- Some property developers in Dubai offer financing which ranges anywhere between 50%-90% of the total property value.
Why is Dubai real estate priced so much cheaper than other premier real estate markets in the United Kingdom and abroad?
When compared to other places and countries, Dubai’s real estate is a lot cheaper. Though real estate is growing at an amazing pace, the costs and charges levied are comparatively lower than that in the UK, US, and Japan etc. Of course comparisons are made, and it is seemingly unbelievable as to how great locations and properties are priced so low. This could be because of cheaper labor, lower building costs, lower additional charges and no levies, etc.
The properties here are definitely lot lesser than when compared on an international level. This is also because the land prices and values here are deemed cheaper when compared to its western counterparts. So as a result, expatriates or foreigners can afford to invest in high-end properties by paying lower costs.
How do foreigners get mortgages for property in Dubai?
With the changing economic scenarios and an increased expatriate/foreign participation in Dubai’s real estate and business, mortgages can be availed by expatriates and/or foreigners too. In Dubai, property can be owned as a leasehold or freehold option.
The primary and principal banks or concerns offering mortgages and loans in Dubai are Amlak, Tamweel, HSBC, Lloyds, MashreqBank, RAKBANK, National Bank of Dubai, United National Bank, Arab Bank, Abu Dhabi Commercial Bank, Standard Chartered Bank etc. The banks offer loans for properties where construction is already underway or where it is still in the planning stage. Of course, the rates and terms differ for different banks. Also one can avail loans from their home countries for investing in real estate in Dubai if one owns property in their respective countries which is used as collateral for the loan granted.
How much can I borrow and at what rate?
The offered mortgage rates are various and differ between the different mortgage companies or banks. For foreigners or expatriates, mortgages are given out based on different factors like one’s income or earnings potential, their job, type of property, its total cost, the total loan term etc.
Also, the loans doled out are different for expatriates who reside in Dubai and those who live elsewhere and are investing in real estate. For people who live in Dubai the mortgage amount is anywhere between 70-80%. Non-residents or foreigners are offered mortgages at 60-70% of the total loan amount. The difference should be paid as down payment. Additionally, it would depend on the property, the time taken to complete it and the lenders themselves. The lenders can change the mortgages at their own discretion as there are no conditional rules or laws.
How has Dubai emerged as an investors’ dream?
Dubai in the last few years’ has risen in its stature and presence. Its progress has grown in leaps and bounds. The city is witnessing abundant growth and prosperity.
So for an investor in any area like real estate, or a business, Dubai is definitely worth investing. The real estate sector is recording a booming growth and development. With more and more expansion plans in the offing, investors are cashing in on this and investing in real estate developments that are coming up in different parts of Dubai. For good and justifiable real estate returns, Dubai is seemingly a hot favorite for people from all over the world. The key factors for Dubai turning into an investors’ paradise are the prices, location, amenities, interest rates and nil taxes.
How to get a pre-approved mortgage?
There are many large-scale real estate projects coming up in Dubai and the property scene is growing. Today, a person seeking to invest in real estate has many locations, plans and types of housing to choose from.
When one is investing in Dubai in a property/real estate, it is best to apply for a pre-approved mortgage. It is based on this that the banks’ would work out as to how much amount a person is eligible for and the final or actual amount that they would lend. It would also depend on the type of the property, its total cost, location and the time taken for completion of the project. If a bank or lending institution does not agree on a certain loan amount, one is free to enquire from other banks. If a property is pre-approved then it is considered final as there will be no change in the amount guaranteed and one can go in for what one needs or can afford.
How do mortgages in Dubai differ from those in UK and abroad?
The mortgage scene in the UK is different from that of Dubai. There are different types and they are as follows:
- Self Certification Mortgages: Also known as ‘self cert’ mortgages. Mortgage lenders determine the wages or salaries of the person to determine this type of mortgage.
- The Right to Buy Scheme: This scheme is a policy that gives tenants of council housing the right to buy the house they are residing in.
- Shared ownership: Described as, ‘a partnership created in the ownership of a house.’ This ownership mortgage allows the borrower and the mortgage lender to jointly purchase a property.
But in Dubai it works quite differently. First of all properties can be owned as freehold or leasehold only. If the royal family were to give an exception to a person, then they can own the property wholly.
Also lenders do not lend for every project i.e. built. Buildings are sold normally after they are fully built not because they are unworthy or faulty but because that is the norm. However, in contrast, mortgages are often given for properties which are still in planning stages and this is something that does not exist anywhere abroad. The repayment structure is quite encouraging in Dubai.
Do I have to pay tax on Dubai property as a foreigner?
Dubai is a tax free haven. There are no taxes levied be it on income or property. So even if one is an expatriate or a foreigner, there are simply no kinds of taxes for property bought or sold in Dubai.
But it is not the same in other parts of the world. In most places/countries, taxes are paid on assets acquired or sold abroad. In UK, taxes are not to be paid if the money is invested or deposited in an offshore bank. This is done by ensuring that rental income, if any or money from the sale of property remains offshore. This can be done by operating an offshore bank account and maintaining the transactions therein.
What is the process by which local finance houses assess mortgages?
A mortgage is a loan that is given against a property wherein the property stands as collateral till the loan is fully repaid and there is a fixed interest rate also accrued on the loan. The amount borrowed depends on the income of the borrower and the price of the property. The repayment is determined by the mortgage term. If it’s a shorter repayment period, then the monthly mortgage payment will be higher. If it’s a longer repayment period, then the monthly payment is lower.
The mortgage amount is calculated in the following way:
Monthly income minus expenses and divided by 3. This gives an approximate amount for each month over the term. This is not based on how the property would appreciate or depreciate and it does not allow for a low-loan-to-value i.e. a large down payment and a small loan opted for. But sometimes even when one’s earning ability is good, we cannot consider that banks would grant a good mortgage amount. Also, another good option would be to lend from an in-house property lender.
Which areas are the best in terms of investment in Dubai?
Since Dubai is on a great expansion drive and the whole city is definitely seeing many changes, there is not one area that can be referred to or pointed out for real estate investment in Dubai.
This is because the city is uniformly growing and all areas are being developed. For ex. the projects being constructed on the islands of Palm Jumeirah or Palm Jebel Ali are all exclusive properties worth investing in. Similar is the case with the Dubai Waterfront area or in the International cities, a project modeled on the different countries around the world. The final decision in real estate investment definitely lies on the investor after they consider their requirements, cost, location and other important factors.
What is the appeal for people and investors in the Dubai real estate market?
Dubai is a vibrant cosmopolitan city. The city is growing at an amazing pace. Its economy is growing in statures and a lot of developmental activities are underway. In that, the appeal for people from around the world to invest in Dubai’s real estate market could be:
- For Dubai’s economy it is definitely boom time and is a welcome note to investors.
- Dubai is a tax-free haven. There is absolutely no form of taxes to be paid for ex. income tax, property tax etc.
- Advance infrastructure
- Dubai’s vibrant, lively cosmopolitan environment is also a plus.
- There are no political upheavals in Dubai. Also, there are no known terrorist activities in the city.
- Advance communication technology is also an appealing factor.
- It’s safe to reside in Dubai. It has a very low-crime rate.
- The schools and education system are also good.
- Advanced healthcare services.
- Investing in Dubai is still a lot cheaper than in many other parts of the world.
- There are plenty of entertainment options in Dubai like beaches, great dining spots, malls, clubs, pubs, multiplexes, amusement parks etc.
- Clean, safe and secure environment
What is meant by leasehold and freehold?
Freehold means ownership of the whole building one is buying for an infinite period of time. Currently there are new laws being introduced by the Dubai government. Also, the present freehold or leasehold option is in contract to the land developers recognized by the government. They are Nakheel, Emaar and Dubai Holdings. But there maybe no law that is introduced where the land is owned by a foreigner as freehold but the rights will rest with its developers. But on a case-by-case basis, titles have been handed out to expatriates.
It is better to opt for leasehold when one is buying apartments in high rise buildings because the freehold is not easy to implement when there is more than one tenant in the building. The leasehold concept is common overseas especially with respect to high-rise buildings. In this it is determined that the person has to maintain the property in mint condition and the granted lease period would range anywhere from 99 years to 125 years.
Do you get a resident visa in Dubai if you buy a home?
If one were to invest in a home or property in Dubai, then one is eligible for a resident visa. The only clause being that the contract should stipulate that the person is entitled to a resident visa in light of purchasing property in Dubai. Resident visas are just like regular visas that are issued when a person has a work permit and this visa does not act as a replacement to the work permit. This visa is issued for a person who plans to live in Dubai for a long period of time.
Resident visas issued with the purchase of a residential property have to go through normal immigration rules and they are renewable after every three years. Resident visas are also issued to one’s spouse and children. If a person is out of the country for more than six months, then the residence visa is rendered void.
Why is Dubai becoming a tourist’s destination?
Dubai is increasingly becoming a tourists’ destination. It is emerging as a major holiday spot and is ever more becoming a place of choice for tourists from around the globe.
There are a multitude of reasons for the same, they could be:
- Sunny and appealing weather all year long.
- Dubai is a shoppers’ paradise.
- Good tax-free benefits.
- Many good hotels and plenty of staying options are available to suit any budget.
- It’s emerging to be an entertainment hub with arcades, theme parks and lots of fun and engaging activities.
- Innovative and gifts-laden international shopping festivals hosted every year in Dubai are also a major tourist draw.
With many more illustrious and grandiose projects underway, Dubai is increasing in its stature and global appeal and is drawing more and more tourists every year coupled with returning tourists who just don’t seem to have enough.
What about terrorism, it’s a Muslim state isn't it?
Dubai is a cosmopolitan city. It has seen rapid growth and development in the last few years. Today, because of its growing prosperity and knowing that changes have to be initiated for more economic prosperity, the country is not very rigid and as conservative as other neighboring states. So sometimes the country can be branded as ‘modern.’
But seeing this amazing growth and prosperity may not be a big factor for terrorists to strike or create mayhem. The cosmopolitan has not only embraced and adapted to work, business and economic growth but has also retained its religious, personal and traditional values, however, adapting to a more western capitalistic change on the economic front. So in light of the fact that there is abundant prosperity and happiness, Dubai as of today, does not warrant for any sort of terrorist strike or activities. It is a peaceful nation which is becoming a land of opportunity.