Introduction to Dubai Real Estate

Property investment increased steadily and was enjoyed by UAE nationals until 2002, when, by royal decree, foreign expats became eligible to own property in Dubai. Over the next five years, the city suddenly experienced a construction boom when overseas investors poured money into Dubai's property market.

After the 2007 correction, the Real Estate Regulatory Agency (RERA) was founded in the same year by His Highness Sheikh Mohammed Bin Rashed Al Maktoum, the UAE's vice president, prime minister, and ruler.

RERA's founding was to enhance the transparency and effectiveness of Dubai's real estate sector legal framework in order to increase foreign investments.

Since then, the Dubai government has also implemented a number of new laws and updated current legislations to help facilitate overseas investors using free trade zones and freehold estate laws, which in turn encouraged their mindset to consider living in Dubai as a long-term move as opposed to considering it a transient market as was the case in the early years of this century. This was reflected in the Emirate's strong bounce back from the global financial crisis.

Dubai's inclusion of its entire population demography is also evident through its many legal motions. An example is the advent of a Wills and Probate Registry that was set up for non-Muslims. This is to cover the devolution of assets held in Dubai, providing an assurance that Sharia Law will not govern the distribution of those assets.

Dubai's population has been increasing rapidly.While restrictions such as taxation are on the increase globally, contributing to the brain drain in these countries, the preferred income tax-free and lifestyle-focused environment of the UAE has seen the population increase exponentially from 2005, when it was just above 4 million, to 2014, when it reached around 9.5 million. 

Of the 9.5 million, Abu Dhabi, an emirate of 67,340 square kilometres, had a population of 2.5 million, while Dubai stood at 2.35 million.

In real estate terms, this translates to one thing: Everybody needs somewhere to live. 

Since Engel & Völkers Dubai entered this market in 2014, we have provided many different properties all over the city. Whether it be for tenants, first-time buyers, home movers or investors - our inventory of over 2,000 properties at any one time caters to fulfil your specific requirements. 

The general rule of thumb is that if one is living here for more than three to five years, that person is likely to be around for the long haul, so it is advisable to look at the possibilities of owning a home around that time.

Buying Real Estate in Dubai

Whether you are a seasoned Dubai tenant taking your first step to owning property or a seasoned investor looking to increase his/her current portfolio, risk management plays a large role in your property investment and some of the factors to consider when buying property(s) are as follows:

Type:

• Land

• Apartment

• Townhouse

• Villa

• Building (Residential/Commercial/Hotel or a mix)

Location:

Various communities across Dubai of which some examples are:

• Coastal skyscrapers (Dubai Marina/JBR)

• City living (JLT)

• Suburbia (Springs/Meadows)

• City centre (Downtown Dubai)

• Eclectic mix (Jumeirah Village Circle)

• Value-based properties (International City)

• Strategy-based locations (Al Furjan/Discovery Gardens, where the planned metro extension connecting Sheikh Zayed Road to Al Maktoum Airport goes directly through both locations)

Amenities:

A large deciding factor in buying real estate is the comfort element involved for the occupier of the property. Whether it's within the community or near a neighbouring community, some commonly required amenities include:

• Shops

• Malls

• Schools

• Restaurants

• Community centres

• Access

• Security

• Parking facilities

• Commuting routes

Age:

• 2000 - 2004 (Pre-RERA construction)

• 2004 - 2007 (Construction boom)

• 2007 - 2010 (RERA formation and real estate industry restructuring)

• 2010 - 2023 (Post-RERA construction)

Developer:

• The big four (Nakheel, Emaar, Dubai Properties or Damac)

• Other members of Dubai's League of Extraordinary Developers.

Demography:

A deciding factor is that some property occupiers may have a like-for-like prerequisite; one of many examples would be families who would rather be in a family-friendly environment instead of a bachelor dominated building.

Considerations include:

• Proximity to facilities that cater specifically to the needs of ex-pats

• Cultural prerequisites

• Religious prerequisites

• Families, couples or single environment

• GCC premises or open to everyone

Profile:

Representing the user profile to which a developer has strategised its construction project to be marketed. For example:

• Value properties (Tenant: Service & administrative staff / Owner: Mid management first-time buyer)

• Standard properties (Tenant: Junior and mid-management / Owner: Upper management first-time buyer)

• Quality properties (Tenant: Upper management / Owner: Senior management home mover)

• High-quality properties (Tenant: C-suite executive / Owner: Anywhere from senior management home mover to high net worth individuals).

As an investor, there are a number of strategies to consider, such as purchasing a range of value properties to rent or purchasing one or two quality properties to flip shortly after, etc.

Dubai's Developers

If you've been to Dubai, chances are you have heard of and seen the names of developers lit up on top of skyscrapers, buildings, and billboards around the city. You may have seen a commercial for one of Dubai's developers during your flight. A registered developer has built All property types you have seen, visited a friend in, or stayed in yourself.

In the pre-RERA years, developers steadily constructed around Dubai until the 2004 - 2007 boom years, when the investment frenzy and insufficient regulatory control contributed to a fast-expanding real estate bubble that eventually burst in 2007.

From 2007 to 2010, we witnessed the initiation of RERA and the mammoth task of managing the stalled and cancelled projects around the city.

Over the years, RERA has reached a high-efficiency stage, and developers have become heavily regulated, recapturing investors' trust in Dubai's real estate market again, as witnessed by the industry's recovery.

After careful planning and research, the majority of developers require bank loans to fund their projects. Nowadays, the bank's strict requirement is proof that a minimum percentage of the development is pre-sold before lending the money to get the project off the ground.

Even though the industry is highly regulated, it is still advisable to read through the history of a developer and peruse over past projects in order to have enough knowledge before discussing any opportunity with your Engel & Völkers real estate professional so that you can make an informed purchasing decision on a property.

Property can be purchased in one of two stages, either existing or off-plan (under construction). 

Stay up-to-date with the latest news and updates from Engel & Völkers Dubai. Get in touch with us at dubai@engelvoelkers.com or call us on 800 355.