Why Buy an Apartment in Dubai?
You’ve probably heard it said many times: Dubai is an expensive city. And if you live in Dubai, rent would comprise a huge chunk of your living expenses. Those who rent villas, townhouses, and apartments in Dubai likely spend as much as 40% of their income on rent.
Therefore, if you can afford it and plan to make Dubai your long-term home, it might be better to buy a property in Dubai ASAP.
Now Is the Time to Buy in Dubai
So, why is now the time to buy in Dubai?
Oversupply and Pandemic
According to Knight Frank LLP, the construction industry will deliver an estimated 62,000 additional homes in Dubai this year and around 63,500 additional homes in 2022. This will exacerbate the real estate oversupply in Dubai that has plagued the emirate and kept down high-end housing prices since 2014.
This oversupply was compounded by the pandemic, causing the prices of apartments in Dubai to slide even lower. Of course, the pandemic has had an opposite albeit modest effect on the prices of single-family properties. Due to social distancing and a preference for more spacious homes, the demand for villas rose, and villa prices climbed.
Dubai Is Starting to Recover
By all appearances, Dubai is successfully holding off the pandemic. The number of foreign expatriates in Dubai is rising again after the precipitous drop in the Dubai population in early to mid-2020.
But the housing oversupply is successfully keeping Dubai’s housing prices in check. And it is likely to continue to do so in the years to come. However, housing prices are starting to climb again, although they might do so at a rather slow creep than the rest of the premium housing markets worldwide.
Buy Now to Save
So, what’s the takeaway here? For foreign expatriates in Dubai or those thinking of relocating to Dubai, now is the perfect time to buy property in this particular UAE emirate. Wait to purchase, and you will pay a bit more than you will pay now.
In other words, if you want a bargain, buy a house now.
Buy Now for Better Value
Of course, don’t hope for a literal bargain. You would still have to pay a pretty penny to acquire property in Dubai. But you would get better value for every dollar spent in Dubai than in other similarly affluent parts of the world.
For instance, according to Knight Frank LLP, a million dollars in Dubai will buy you 165 square metres of living space. However, in New York or London, the same amount would buy you only around one fifth as much space.
Why Buy and Not Rent?
Living in a property you own would be more economical if you plan to stay in Dubai for the long term. For one, living in your own property would free up a considerable portion of your monthly income, specifically the part that would have gone to rent.
Buying now, when the housing prices are still relatively low, should also be a great investment strategy. You can buy low and benefit from your property’s expected appreciation.
Furthermore, buying property in Dubai – if you could meet the minimum required property value – would give you the added benefit of Dubai residency independent of employment.
Just note, however, that a residence visa granted and contingent upon a property purchase is an investor visa. You can’t work on an investor visa, although you can apply for a work permit if you want to work in the UAE.
Residency in Dubai via Property Purchase
The term of the property purchase residence visa depends on property value.
Buy Property Worth At Least AED 1 Million
If you buy a property valued at AED 1 million or greater, you can get a three-year residence visa.
Buy Property Worth at Least AED 5 Million
If you buy property worth AED 5 million or greater (or up to three properties whose cumulative value is AED 5 million or greater), you can get a five-year residence visa.
Conditions of Residence Visa
First of all, the property must be residential and not commercial. It should be designated freehold, and it can be an apartment, a townhouse, or a villa.
Given the state of the market right now, apartments seem to be the most economical option. However, you can still buy a villa if you can afford to do so. Villa prices will continue to go up, so now is still the best time to buy a villa in Dubai.
You must buy a fully constructed or ready property, not something off-plan, that is to say, something that is still being planned or is under construction. The title deed must name you as the property owner.
Freehold Property in Dubai
In Dubai, you can buy property in any area designated as a freehold by the government. Freehold ownership is unrestricted. In other words, your ownership will not lapse after 99 years, and you can do whatever you want to your property – subject to existing laws of the land, of course – without any limitations.
In other words, what property you own in Dubai, your descendants can inherit. You can rent it out, and you can also sell it. Of course, just remember that if your residence visa is contingent upon property ownership, selling that property means losing your residence visa.
There are many freehold areas in Dubai. For instance, the apartments in Dubai Festival City are freehold properties. They’re a good option for families because the development’s multi-use nature means there’s a mall, commercial towers, hotels, supermarkets, medical facilities, and even schools in Dubai Festival City.
You can check with the Dubai Land Department for a list of all the designated freehold areas in Dubai.
A Crucial Time to Buy Property in Dubai
Dubai is a considerably expensive city, indeed. If you are working and living in Dubai and plan to do so for a long time, you should consider buying an apartment, townhouse, or villa in Dubai. Given the current state of the Dubai housing market, apartments offer excellent value.
If you buy property in Dubai, not only are you able to take advantage of the relatively low prices and the great value that Dubai properties currently offer. You can also expect great returns through property appreciation. A property purchase can also help you get a residence visa independent of employment.