THE COST OF BUYING A HOUSE IN DUBAI
Many people’s ideal life scenario involves being homeowners. But imagine you can live in Dubai, the “golden city,” widely regarded as one of the top global destinations. Not; it’s the truth. The city’s housing market is open to everyone, including foreigners. In 2002, the country’s government relaxed restrictions on foreign real estate ownership. When compared to other wealthy metropolises, the price of a home in Dubai is quite affordable.
Still, given all of this, why is it a good idea to invest in real estate in Dubai? Positive rental income. Even if you already have a home in the city and have no plans to use your new apartment as your primary residence. Renting it out can bring in a nice profit. For this reason, it is prudent to consider purchasing real estate in Dubai despite its high cost.
Why Should You Own A Property In Dubai?
Every facet of life in Dubai is excellent, including the housing market. You may rest assured that any piece of real estate you purchase in the city will be in excellent shape regardless of its neighbourhood.
Dubai’s high-end properties and low living costs make it a popular destination. Even lavish apartments in Dubai are affordable. The price is reasonable compared to similarly luxurious options in other global hubs.
Dubai’s low cost of living is one reason to buy a home there. The variety of homes and real estate listings in the city is a plus. Dubai has beachfront mansions, villas, and builder floors.
The city has a wide variety of services and amenities, making it one of the most exciting locations to live in globally. The most important reasons why investors may find it worthwhile to buy a home in Dubai are:
- The World Expo, held in Dubai, is at the very top. About 25 million people from about 180 different nations show here every year to see the event, making it one of the year’s biggest draws. For the owner of a rental property in Dubai, this means a great opportunity.
- Currently, the UAE’s tourist sector is seeing unprecedented growth. If you buy a home in Dubai, you might expect higher returns than in other cities because of the city’s growing popularity among tourists. Tourists flock to the city since it is home to some of the best attractions in the country. The city’s burgeoning hotel supply proves that the tourism industry is thriving.
- Don’t you wish that your investments provided you with good returns? In Dubai, you can buy a home for a reasonable price. Concurrently, the real estate market has been thriving thanks to rising population levels. There will be no shortage of renters for this building because it can keep up with the expanding population.
- Dubai features some of the world’s best connections between its various modes of transportation, and its roads are among the best. Government officials know that improved business and real estate prospects can result from investing in world-class transportation and infrastructure.
- The annual property tax is not required in Dubai. This proves that the expense of purchasing a home in Dubai is well justified. The annual policy of no tax applies to both commercial and residential properties. Consequently, you won’t have to fork out any cash for property taxes after making a purchase.
The price of a home in Dubai includes several extra expenses. Detailed below is a breakdown of these various fees:
⮚ Upfront Fees For Buying A Property
Both buyers and sellers can feel secure in Dubai, thanks to the city’s well-established regulatory framework. Some mandatory up-front payments are required by law when buying Property in Dubai. These costs are in addition to the purchase price of a home in Dubai and must be paid in full at the time of purchase. There is no set rate for the initial costs. This cost is variable and is determined by variables, including the kind of property being purchased and the selling agent.
⮚ Initial Deposit
Both completed and unfinished properties in Dubai need buyers to pay the mortgage. Making this initial payment guarantees the buyer’s position as the legal owner of the property. Deposits for ready-to-move-into homes average roughly 10% of the total price. These funds are to be sent as checks to the seller. This payment will be held by a broker registered with the RERA until the property is transferred to the buyer.
⮚ Mortgage Fees
Those who plan to use a mortgage or home loan in Dubai to finance real estate purchases will have to pay the relevant mortgage charge to the lending institution. As part of the first mortgage closing expenses, this is a fee that some Dubai banks offer. This reduces the buyer’s out-of-pocket expense initially.
When purchasing real estate from a seller who holds a mortgage, the buyer must first satisfy the seller’s mortgage before making any other payments on the property. A No Objection Certificate will be issued to the purchaser upon settlement (NOC). The DLD rights transfer cannot proceed without the NOC.
The seller has no objection to transferring rights to the buyer and has paid all payments, including the service charge, as stated in the NOC.
⮚ Service Fees
Following the completion of a transaction and the transfer of rights, extra expenses in service charges may be incurred. To keep their new home in good condition year after year, buyers must fork over a fee determined by the DLD and included in the RERA Service Charge and Maintenance Index.
Costs for maintenance and upkeep are calculated using the RERA Index, which considers a home’s square footage and neighbourhood. DLD’s homepage offers the most recent pricing info available.
In addition to the price of a home in Dubai, buyers must also pay service fees to cover the costs of maintaining the building’s shared amenities such the elevators, swimming pools, parks, security, water, etc.
⮚ Insurance Fees
In Dubai, home insurance is not viewed as a need. Investors and homebuyers alike should still do so. Home insurance protects you financially in a disaster, fire, burglary, or another covered event.
However, if the purchase is financed, the buyers must take out mortgage life insurance. Mortgaged homeowners in Dubai should include the cost of life insurance premiums in their overall housing budget. As a rule, banks will assess this monthly fee and the loan principal. Banks typically charge between 0.4% and 0.8% based on the amortizing mortgage balance. Young house buyers might save money by purchasing life insurance from a company other than their bank.