Property for Sale – Dubai

The United Arab Emirates (UAE) is a federation of seven states that has grown from a quiet backwater to one of the Middle East’s most important economic centres.

Though traditionally conservative, the UAE is one of the most liberal countries in the Gulf.

The UAE has diversified and has become a regional trading and tourism hub. UAE firms have invested heavily abroad.

In UAE, Dubai is the most preferred destination for indians to invest in real estate. Many real estate developers in Dubai target the Indian market for their properties.

FACTS

Capital: Abu Dhabi

• Population: 1 million
• Area: 77,700 sq km (30,000 sq miles)
• Major language: Arabic
• Major religion: Islam
• Life expectancy: 76 years (men), 78 years (women)
• Currency: Dirham

RESIDENTIAL PROPERTY FACTS

Price (sq.m): $5,918

Rental Yield: 5.19%

Rent/month: $3,070

Income Tax: 5.00%

Roundtrip Cost: 6.01%

Cap Gains Tax: n.a.

Landlord and Tenant Law: Pro-Tenant

Where to buy property in United Arab Emirates

United Arab Emirates

Dubai Emirate, Abu Dhabi Emirate, Sharjah Emirate, Ajman Emirate, Fujairah Emirate, Ras Al Khaimah Emirate, Umm Al Quwain Emirate

Abu Dhabi Al-Gharbia, City Centre, Eastern Region

Dubai

Bur Dubai District, Deira District, Downtown District, Dubailand, Jebel Ali District, Jumeirah District, Lagoon District, Marina Emirates Living District, Mirdif District, Palm Deira District, Palm Jumeirah District, Waterfront District, World Central District

Seven city-states compose the United Arab Emirates (UAE): Dubai, Abu Dhabi, Sharjah, Ajman, Umm al-Quwain, Ras al-Khaimah and Fujairah.

The emirates hug 800 kilometres of coastline, from the Persian Gulf to the Gulf of Oman, in the eastern part of the Arabian Peninsula. The UAE’s neighbours are Oman to its north and east, Saudi Arabia to the south and west, and Qatar to the west. The UAE is four-fifths dry desert.

UAE nationals benefit from free education and excellent health care. While the official religion of the UAE is Islam, there is religious tolerance—necessarily, as foreigners number one-fourth of the entire population. UK citizens make up a huge portion of the senior expat community, although by numbers, half the expats are from South Asia, such as Indians and Pakistanis.

Tourism is now a major income earner for the UAE, after the emirates struck it rich with oil and their newfound wealth led to a huge property boom. The once featureless desert has bloomed into the world’s most luxurious playgrounds of the rich and famous.

Property prices in Dubai are still declining, following an unsustainable surge in recent years. Most of the developers in Dubai have property for sale in Dubai region.

In May 2016, Dubai´s all-residential property price index (RPPI) fell by 5.35% y-o-y, according to Reidin.com. When adjusted for inflation, house prices in Dubai fell by 6.86%.

• Prices for apartments for sale in Dubai fell by 5.15% (-6.67% in real terms) during the year to May 2016.
• Prices of Villas for sale in Dubai fell by 6.05% (-7.55% in real terms) over the same period.

The continued sales price decline for appartments and flats for sale in dubai , according to JLL MENA, is due to:

• the stronger US dollar, which hit the purchasing power of overseas investors from non-US denominated countries;
• lower oil prices similarly cut the purchasing power of investors from nearby oil-producing nations.

Most residential housing demand in Dubai has recently come from Indian, British, and Pakistani buyers.

Foreign ownership has been significantly liberalized:

• Foreign nationals are now allowed to buy freehold properties in designated areas in Dubai.
• Gulf Cooperation Council (GCC) nationals are allowed freehold ownership anywhere in the Emirates.
• Abu Dhabi’s government introduced new regulations in 2014 allowing foreigners to own property in designated investment zones on a freehold basis. Previously, foreign investors were generally limited to leasehold arrangements with 99-year leases. This followed Abu Dhabi´s previous market-boosting measures.  In 2012, the government compelled public sector employees living outside Abu Dhabi to relocate within the emirate’s borders. Then in November 2013, the government cancelled a 5% cap on annual rent increases.

It is now easier to buy apartments in Dubai. Apartments in Dubai now sell for around USD 4,400 to USD 6,000 per square metre (sq m):

• • Medium-sized apartments(120 sq. m.) sell for an average of USD 5,900 per square metre (sq. m.)
  • Smaller apartments(90 sq. m.) are cheaper, selling for around USD 4,400 per sq. m..
  • Based on previous years´ research, we imagine that significantly smaller apartmentsof, say 70 sq. m. and under, could earn rental yields of up to 7%.  That is where the real profits lie.
  • Indians also prefer to buy flat in Dubai and buy villa in Dubai.

Lower rents in Dubai and Abu Dhabi

Residential rental rates declined in both Dubai and Abu Dhabi during the first quarter of 2016, according to Asteco.

• In Dubai, the average apartment rental rates fell by 2% in Q1 2016 from the previous quarter, according to Asteco. On an annual basis, the rental rates fell across the board at an average of 4%.
• In Abu Dhabi, rental rates for prime residential apartments declined by 2% from the previous quarter. However, rentals were still up 4% on a year earlier.

In Dubai, annual rents in Q1 2016 ranged from AED 45,000 (US$ 12,253) to AED 170,000 (US$ 46,290) for one-bedroom apartments, and from AED 80,000 (US$ 21,784) to AED 340,000 (US$ 92,580) for large three-bedroom apartments, according to Asteco.

Abu Dhabi rents ranged from AED 42,000 (US$ 11,436) to AED 150,000 (US$ 40,844) for one-bedroom apartments, and from AED 65,000 (US$ 17,699) to AED 350,000 (US$ 95,303) for three-bedroom apartments.