According to the report of the real estate company Allsopp&Allsopp, most property buyers in Dubai in 2022 were British citizens. They made 22.1% of all the foreign real estate purchasers. This is twice as much as the Indians, who ranked second, and four times more than the French buyers, taking the third place.
No wonder the Dubai real estate market is so attractive. Lower property prices, together with better quality than in the UK, are one of the critical factors. Besides, there is almost no language barrier as many locals speak English well. In addition, the buyers enjoy a pleasant climate, affordable living, and advanced technologies.
All this is only the beginning. Read on to learn about other advantages of buying real estate in Dubai and its unique features.
Why Real Estate in Dubai is Popular with the UK Citizens
Have you ever wondered why lots of property owners in Dubai are British? Who are all these people? Are they all wealthy investors with free capital? Actually, not all. Some real estate agents claim that many British citizens sell their houses in the UK and invest in real estate in the UAE. There are several reasons why they do it.
- Cost of living. The website mylifeelsewhere.com states the UAE is 9.3% cheaper than the UK. For instance, UAE citizens spend 1.8% less on groceries, 42.7% less on restaurants, and 32.3% on transport. However, the utilities, clothes, and entertainment cost more in Dubai than in the UK.
- More employment opportunities. The UAE is interested in skilled professionals. The unemployment rate here is only 1.6%, while it is 3.2% in the United Kingdom.
- Rental yield. This is the main reason to invest in real estate. Luckily, Dubai is just the place for that. According to Zoopla, a real estate website, the average rental yield was about 3.53% in the UK in 2022. Of course, some properties are more profitable than others and vice versa. For example, investors in Liverpool or Manchester can expect to gain about 5.5% of the capital. Still, these figures are much lower than in Dubai. The data collected by Property Finder suggests that the average rental yield in Dubai was 6% for the same period. This is more than the profit you can get as a property owner in the UK.
- Market dynamics and prospects. The United Kingdom has a very stable economy but is rather conservative and not prone to change. On one hand, this may be a good point: the profit is less, but so are the risks. As for Dubai's real estate market, it is booming and promising. The local government is making a great effort to develop it. Dubai's property market may become one of the drivers of the economy, which would reduce the dependence on exporting oil. Ambitious ideas, like Dubai Urban Master Plan 2040 and the city's strategic location, significantly boost Dubai to become a global business capital. The never-ending influx of expats and tourists will keep the demand for houses and flats in Dubai high. As a result, investors are very likely to make a good profit out of it.
- Residence permit. Getting a residence permit in the UAE might be a solid argument to invest in real estate in Dubai for those Britons considering settling here or living between two countries. Fortunately, the process is not complicated. You can get a residence permit for investing at least 750,000 AED in a property (166,033 GBP). The residence permit is valid for two years and can be prolonged if you own the property. Buying real estate worth a minimum of 2 million AED (422,755 GBP) will land you a "golden visa" valid for five years and can be extended later.
- No fees. Some people often call Dubai a real-estate-tax-free city. However, this is not entirely true. There are some expenses to be paid by property buyers. For instance, the buyer and the seller usually agree to pay 50% of the fee each, equivalent to 4% of the property value, before signing the deal. Furthermore, the property owner has to pay an annual maintenance fee of 12 to 49 GBP per square metre. Owning real estate is relatively more affordable than in many other countries.
How to Choose a Property in Dubai
Before diving into Dubai's real estate market, note that foreigners can buy properties only in certain areas. Some areas even do not allow foreigners to rent properties. This law applies to the whole country, but Dubai has the most significant number of freehold areas in the UAE. There are over 70 of them here. It means that non-citizens of the UAE can own both the properties and the land they stand on in freehold areas.
You should narrow down your search to real estate in such zones. The next step is deciding which property type you want to purchase: a finished property or off-plan.
In any case, you had better do proper research to protect yourself from fraud. First of all, make sure the property belongs to the stated owner and does not have any encumbrances. You can get the necessary information from the Dubai Land Department (DLD).
If you are looking into buying off-plan, be extra careful. Do not forget to confirm both the developer and the project are registered with RERA. Find out the escrow account number. Any off-plan project must have it, as depositing money is the best way to keep your funds if the construction is stopped. In other words, depositing money to an escrow account guarantees you will either get it back or be transferred to another developer in case the project is not completed.
Another thing to check at DLD is if the developer has the rights to the land under the construction site. It can either own it or have a long-term lease on the plot. Do not hesitate to decline the offer if there is evidence of any encumbrance or a dispute about ownership rights.
Finally, ensure the potential partner can sell off-plan properties in a particular project.
DLD is the institution collecting all data about real estate in Dubai. It even provides information on the current construction stage of projects and their expected commissioning dates. We advise you to cross-check the developer and their offers via the Dubai Land Department.
Let's consider the other things you must consider before buying a property.
- A permit for developer's activities is granted by the Dubai Real Estate Regulatory Agency (RERA) of the Dubai Land Department.
- The quality of the project.
- The right to sell properties to foreign nationals in the area.
- The adequate correlation of the assigned price to other similar offers on the market.
- A loan approval, if you acquire real estate with a mortgage.
- A licensed broker, if you have one.
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