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Five Things To Consider When Buying A Home In The UAE

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ADCB, the Abu Dhabi-based bank, offers five top tips to think about when looking to buy a home in the UAE.

If you’ve been following the news, you’ll know that the UAE’s property market is pretty renter-friendly at the moment.

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In fact, rental prices have come down a lot over the last couple of years, with tenants now able to either negotiate lower rates with their existing landlords, or easily find better deals elsewhere.

All of that said, the UAE’s market isn’t bad for property buyers, either. Again, prices have come down quite a bit, meaning that, for many UAE residents, the prospect of owning a property isn’t actually that far-fetched.

Indeed, a recent study by Knight Frank showed that prime residential properties in Dubai, for example, are more economical than in other major urban destinations including New York, London, Hong Kong, Paris, Geneva, Tokyo and Mumbai. The report said that $1 million can buy 138 square meters of prime residential property in Dubai, compared to a fifth of that space in those other cities.

Plus, the UAE is becoming less of a transient lifestyle destination and more a place where people are looking to put down long-term roots.

As a result, of all this, you could be forgiven for considering the idea of purchasing property in the UAE. But if you are, there are a few things you should consider. Here, ADCB, the Abu Dhabi-based bank, offers five top tips to think about when looking to buy a home in the UAE.

Investment Objective

If you have decided to invest, you need to first ask yourself if you are buying to live in or to rent out. If you are buying for investment, then it’ worth considering a property that will bring you high returns.

Pick a property that fits your budget

In the UAE, most expats can finance up to 75% of the property’s value, but you’ll need to provide a downpayment for the rest. Think about how much you can realistically save up, and how much you’d be willing to put down in one chunk. Then you’ve got to think about the monthly mortgage repayments once you’ve bought the place. Work out how much you can afford to pay per month, and work backwords from there.

Location and Size of the Property

Whether you are buying to live or to rent, your return on investment (ROI) will be dependent on the location and size of the property. Every property has its own pros and cons, and can be termed as a good investment. As per a recent survey by bayut.com, in Abu Dhabi, Maryah Island is the current favorite location for investment, followed by Al Raha Beach, Al Reem Island, Saadiyat Island and finally Yas Island. In Dubai, Dubai Marina tops the list of the most popular areas to invest followed by Palm Jumeirah, Arabian Ranches, Jumeirah Village Circle and Dubai Land. Obviously, though, the most popular areas tend to feature more expensive properties to buy, so work out how much you’ll actually get back from the property if you’re willing to splurge.

SEE ALSO: Dubai rents continue to fall, according to a new report

Find a good developer or real estate agent

A real estate agent should be more than a broker; they should be able to understand your requirements. Make sure you have ticked the following boxes when selecting a developer or real estate agent:

  • Have you done a quick internet search on them to check for reviews?
  • Ask family and friends if they know the agent or have heard of the developer.
  • When you meet the agent, treat it as an interview where you enquire about their experience, sales history, licensing number and ask for references.
  • Be sure to visit the developer or real estate agent’s physical office.
  • Check if your selected agent has good relations with other agents and can show you a range of different properties.

Prepare for upfront costs

Once you have decided on the property you’re buying, budget for the following up-front costs:

  • Down payment – deposits as per the agreement of sale between buyer and seller.
  • Land department transfer and admin fees.
  • Connection fees for electricity and water authorities.
  • Property maintenance charges.
  • Mortgage application fees, if required.
  • Commission for the broker.

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