Purchasing real estate in Dubai is a crucial event in the life of each buyer. Sometimes it can define the future pace of life, place of living, and career opportunities. For this reason, foreigners should be extremely concentrated when investing in villas in Dubai in 2022. As with any dream, making it a reality can be a daunting task if you don’t know where to start. Confusing processes, dealing with multiple intermediaries, worrying about getting the right ROI or finding a reliable mortgage partner can discourage many people. But it’s not that hard if you approach the question with necessary knowledge. In this article, we will discuss 3 important issues that every house buyer needs to be aware of.
The difference between primary and secondary real estate market
Specialists from the financial sphere define the primary real estate market as a part where new properties are sold. Houses under development and already completed are included in the list.
In the secondary market, lenders and investors buy and sell existing homes, often encumbered by mortgages or mortgage-backed securities. This frees up money for additional mortgage lending.
Since the UAE is now considered one of the fastest-growing real estate markets in the world, despite the pandemic and complicated situation in the world, the country is a great investment option. So, here are some important tips for those who are buying a home here for the first time.
1. Crucial characteristics of a housing option.
- Location affects the return on investment. The aforementioned neighborhoods have a high occupancy rate, so you’ll always find a tenant willing to rent your property immediately.
- Proximity to major infrastructure, such as public transportation, supermarkets, parks and recreation, beaches and nightclubs, schools and medical institutions, affects the cost of rent.
- The size of the house influences liquidity. 1 and 2-bedroom apartments are sold faster and provide a higher yield than penthouses or villas. This is because expatriates in Dubai are more likely to be able to afford properties in the mid-price range and smaller areas with easier mortgage options.
- Operating and government costs: The Dubai Real Estate Regulatory Agency (RERA) uses the Maintenance and Maintenance Fee Index, which governs the cost of maintaining real estate. Costs vary by community and property type, but should be considered when projecting a return on investment.
2. Different financing options and the choice of the most appropriate one.
Mortgage interest rates in the UAE.
Most banks provide mortgages of a certain percentage of the value of the property. According to local laws, residents of the UAE must pay at least 20% of the property value as a down payment.
Banks in the UAE offer many options for buying property, including fixed-rate and floating-rate mortgages. Dubai residents enjoy interest rates ranging from 2% to 3%, but non-residents should expect slightly higher rates of 3.5% to 5%.
Dubai residents also enjoy longer mortgage terms, up to a maximum of 25 years, while non-residents can expect shorter terms depending on the banks.
There are many repayment plans available in the UAE mortgage market. Some are offered by banks, but developers also provide good options.
- 10/90: the buyer pays 10% of the property value before the property is delivered and the remaining 90% is paid over an agreed period with various installment options and frequencies.
- Payments during construction or upon delivery: most payments are made during construction, and the remainder is paid when the property keys are received. There are many versions of this percentage payment plan: 50/50, 60/40, 70/30, and others.
- Rent to Buy: This option allows the buyer to make a monthly rent to live in the property they wish to purchase, with the amount of rent considered as part of the payment plan.
3. Things to pay attention to when purchasing a property for the first time.
As Dubai is a popular platform for investments in the sphere of real estate, there are some unscrupulous people who can cause problems in the process of a deal. A house buyer should become concerned when they see duplicate or fake listings, unrealistic prices below market value for no apparent reason, and misleading photos.
Trusted real estate agency in Dubai
To avoid all the above-mentioned displeasing issues and not to spoil the first experience, it is advisable to contact a reliable real estate agency. Ax Capital provides a portfolio of successful cases and has hundreds of reviews from happy buyers. The professionals in the property industry work day and night to offer stylish housing options of high quality at affordable prices. Ax Capital gives detailed information about each residence and the profit from its purchase.