Buying real estate in Dubai

Are you interested in buying a property in Dubai? We've put together this guide to simplify your task and guide you through the purchasing process. Whether you're looking to buy as a rental investment or a permanent residence, this guide will help you.

There are many advantages to investing in real estate in Dubai:

• Very competitive price per square metre
• Property tax exemption
• Exceptional rental yields
• Attractive financing plans
• Simplified, transparent purchasing procedures

Dubai's real estate market in 2023 is characterized by sustained growth in prices and rents in several sectors, despite some moderation and the global economic context. Strong demand in the residential sector, combined with a lack of supply in the office and retail segments, creates a favorable environment for investors.

However, it is crucial for potential investors to keep abreast of current trends and market forecasts in order to make informed decisions.

Market Overview

• Economic growth: GDP growth in the United Arab Emirates (UAE) is estimated at 2.8% in 2023. The non-oil sector is expected to grow by 4.5%, despite a projected contraction in the oil sector of 1.6%.
• Lack of supply in certain sectors: There is an acute lack of supply in the industrial, logistics and office sectors in the UAE, which should lead to continued rental growth in most regions.

Residential Sector

• Residential transactions: In October 2023, Dubai recorded 6,407 residential transactions, marking a 23.6% decline on the previous year. However, the total number of residential transactions in 2023 has already surpassed the 2022 total, which was the highest ever recorded.
• Price increases: Average prices in Dubai's residential market rose by 19.1% in 2023, with increases of 18.7% for apartments and 21.4% for villas.

Rental Sector

• Rent growth: Average rents in Dubai rose by 19.7% in 2023, with increases of 19.9% for apartments and 18.0% for villas.
• Rental forecasts: Rental growth is expected to continue in Dubai, although the pace of growth may slow. Demand in the residential sector has been underestimated, particularly in Abu Dhabi and Dubai.

Commercial and office sectors

• Growth in office rents: In Dubai, average rents for offices of various grades rose in 2023, reflecting strong occupier demand and limited inventory.
• Retail sector: To mid-2023, Dubai saw average rental growth of 38.0% in the retail sector. This growth is attributed to strong occupier demand and limited quality inventory.

Industrial and Logistics Sector

• Industrial and logistics rental growth: In 2023, rental growth in the industrial and logistics sector continued, with average rental increases of 6.4% in Abu Dhabi and 19.0% in Dubai.

Trends and forecasts

• Underestimated demand in the residential sector: Demand in the residential sector has been considerably underestimated, particularly in Dubai and Abu Dhabi. Nevertheless, price growth is expected to stabilize by the end of the year, while remaining positive.

Investing in real estate in Dubai offers several notable advantages for investors, due to its unique environment and favorable policies. One of the main attractions is the high rental yield, often between 6% and 10%. This level of profitability far exceeds that of many mature real estate markets around the world.

In addition, Dubai's real estate market is characterized by significant capital appreciation. The city is constantly evolving and expanding, with numerous infrastructure projects underway that are driving demand and increasing property values.

From a tax point of view, Dubai is particularly advantageous for real estate investors. The absence of taxes on capital gains, rental income and property makes it a highly attractive destination for international investment. In addition, Dubai stands out for its transparency in the real estate sector, offering investors clear visibility on prices and transactions, thus reducing the risk of misinformed investments.

Purchasing processes in Dubai are also simplified and largely digitized, making transactions easier for foreign investors. In addition, financing options, including mortgages, are available to international investors, making property purchases more affordable.

Finally, with a growing population and new real estate developments, Dubai presents ongoing investment opportunities, promising future growth for investors. What's more, investors purchasing property in Dubai can benefit from a residency visa, offering an additional opportunity to live and work in the UAE.

Before you set out to buy a property in Dubai, it's important to define your criteria. Ask yourself the following questions:

• What's your budget?
• What is the surface area of the property you are looking for?
• Do you prefer a villa or an apartment?
• What type of neighborhood would you like to live in?

Once you've identified your criteria, it's time to define your purchasing project:

1. Determine your budget: This will enable you to target properties that match your financial means.
2. Property search: Search for properties for sale in Dubai using online real estate platforms or by consulting local real estate agents.
3. Visit properties: Take the time to visit several properties to make sure you make the right choice.
4. Administrative and legal formalities: Find out what you need to do to buy property in Dubai. In particular, you'll need to consult a notary to draw up the deed of sale.
5. Financing: If you need a mortgage to finance your purchase, check with local banks and compare offers.

Down payments and payment plans

To buy a property in Dubai, you'll usually need to pay a deposit of 15% to 20% of the sale price. Payment terms vary from developer to developer, but it's common to pay 35% of the price during construction and 50% when the keys are handed over.

Here are a few tips to help you make the most of your purchase:

• Call on an Onyx Real Estate expert: Our real estate agents are familiar with the Dubai market and can advise you on your search and help you find the ideal property.
• Don't hesitate to negotiate: If you find a property you like, try to negotiate the price with the seller.
• Check the condition of the property: Make sure there are no major defects and that it complies with local building standards.
• Make sure you understand the terms of the financing plan: Take the time to read and understand the terms of the financing contract before you sign.

In conclusion, buying property in Dubai can be an excellent investment opportunity, or a chance to live in a dynamic, cosmopolitan city. If you are well informed about the local real estate market, and take into account the advice in this guide, you'll be able to complete your purchase project with complete peace of mind.