What you need to know before investing in property in Dubai

Investment properties are one of the best long-term investments when it comes to returns on investment compared to risk level. This is particularly true of investing in a market like the UAE, where a booming economy and constant flow of expats fuels demand for rental properties, at the same time as being a stable, well-run country which makes this a low-risk market for investors.

Foreign investors have been drawn to Dubai and the UAE in general since the country opened its real estate market to foreign buyers in 2002. Dubai continues to offer great opportunities for foreign investors, with the extra incentive that property purchases are tax-free. Before you rush to buy an investment property in the commercial and economic center of the Middle East, check these top tips.

Understand the Rules and Regulations

Prior to the early 2000’s, foreign nationals were prohibited from owning property in the UAE. This changed with the UAE Government allowed foreigners to buy first lease-hold properties, and then free-hold properties in 2002. Under a free-hold arrangement, foreign investors can now buy property in Dubai and have complete ownership over the property and the land it sits on, and can sell the property whenever they wish.

Buying property in the UAE is very easy for foreigners compared to some countries: it is not necessary to be a resident to buy real estate here, although owning a property means you and your family are automatically eligible for a renewable residence visa. Despite the relatively straightforward process of buying a property in Dubai, it is important to seek advice from a local expert, such as a lawyer.

A Dubai-based lawyer will be able to advise you on the local laws and regulations, to make sure that you comply with all rules and do not leave yourself open to fines or prosecution. Also be sure to only deal with real estate agents who are officially registered with local authorities. In Dubai, it is forbidden to operate as an agent without being registered with the Real Estate Regulatory Agency (RERA).

Research Local Traditions

It is important to understand a little about Emirati traditions if you are planning to invest in the UAE. The United Arabic Emirates has long been a melting pot for different nationalities and cultures, but there are some quintessentially “Emirati” traditions which remain important today. If you plan to do business in the UAE, whether as an investor or otherwise, it is essential you understand these traditions in order to be successful, not to mention respectful.

Traditional clothing in the Emirates is a strong reflection of the garments worn by their Bedouin ancestors, a nomad people who lived in the desert. Customary Emirati dress features long sleeves and full length hemlines which evolved over time to protect the wearer from the sun. Both men and women wear loosely fitting dresses or robes for comfort in high temperatures. These garments of course also reflect the tenants of their Islamic faith.

Sports are extremely popular in the Emirates as a pastime, with traditional sports which remain popular today including camel racing, falconry and horse racing. Traditional Emirati dance also continues to be an important part of the culture, with the Yola or Yowla (folk stick dances performed by men) seen everywhere from casual parties to National Day celebrations. The traditional food in the UAE consists largely of camel, goat and fish, served with rice or flatbread. Spices from India, brought by traders to the region centuries ago, are also a strong feature of Emirati cuisine.

Learn The Different Dubai Neighbourhoods

Dubai is a city of more than 3 million people, and continuously growing thanks to its status as a major commercial and business hub. The city is relatively spread out, and very diverse, with a number of different neighbourhoods, each of them unique. Therefore, make sure to familiarise yourself with the different neighbourhoods in order to choose the right location for your investment.

Some of the key Dubai neighbourhoods for investors are:

1) Dubai Marina: This was the most popular area with investors in 2018, thanks to the mix of property types (from high-rise apartments to pavilion villas) and its high-quality retail and dining scene, situated around a picturesque marina.

2) Palm Jumeirah: Also on the waterfront, this high-end neighbourhood is one of the highest performing areas in Dubai in terms of growth (more on this below).

3) Arabian Ranches: Spacious and further out from the center, this luxurious neighbourhood features villas, a family friendly atmosphere, and lush landscapes.

4) Jumeirah Village Circle (JVC): One of the main strengths of this area is its location, being ideally located for easy access to Dubai Marina, JLT and Jebel Ali, with competitive pricing for villas and apartments.

In choosing the right neighbourhood, you should consider the above factors in determining the potential for long-term increases in property value, as well as for rental returns. It is also important to look at market trends. Certain areas in Dubai have experienced growth in the last few years, whereas others have plateaued or even decreased in value. For example, Dubai Marina showed steady growth throughout 2018 and this is expected to continue in 2019, with the completion of the much-anticipated Palm Beach Residences and Raffles projects.

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