Buying a house is never a simple choice. Our homes define the quality of our lives and are a sign of our status, based on their location, type, floorplans, and accessibility; they are probably the largest single investment the vast majority of us make in a single purchase.
This is a decision that can present even more elements to consider in a city as vibrant and ever-changing as Dubai. While Dubai remains a buyer’s market, revisions in residency visa requirements, incentives for first-time home buyers, increased post-pandemic demand from international investors, and an Expo-driven spike have made choosing the perfect property more difficult than ever.
Factors to bear in mind
While buyer preferences and capabilities differ greatly depending on whether you are an ex-pat or a citizen, a first-time house buyer or someone with past expertise, and if the planned purchase is an investment or a property to live in, here are some factors to consider:
- Does it fit your budget?
Many homeowners make the typical mistake of following their dreams too far and stretching their budget in the process. An excellent technique to determine whether or not a property is cheap for you is to make sure that your monthly housing-related spending is less than a third of your monthly income. You must also account for any maintenance and annual expenses that the property will incur, as well as any processing and regulatory fees that will be added to the purchase price.
- What will the maintenance costs for the property be?
Fortunately, the Dubai Land Department (DLD) has established very clear criteria for annual maintenance costs, which you may calculate using a Maintenance Index based on the total square footage of your property and the arrangements made by your future community. RERA Service Charges apply to properties in Dubai, and you may learn more about these maintenance and upkeep fees by visiting the DLD website.
- What down payment will you need?
One of the most important variables affecting your decision is the initial down payment required to purchase a home. The regulations of the UAE Central Bank state that:
- A personal loan cannot be used to make a down payment.
- For residences worth less than AED 5 million, ex-pats must put down a deposit of at least 25%.
- For properties worth less than AED 5 million, UAE nationals must pay a minimum 20% deposit.
- Buyers might obtain a personal loan to cover bank and agent fees, as well as the transaction’s early costs.
- What conditions must your property meet, qualify you for a residence visa?
For foreign people desiring to become long-term residents of Dubai, the property investment connected residence visa has become a popular option. Applicants who purchase a property of AED 1 million or more are eligible for either a 6-month multiple entry visa or a 2-year residency visa, while those who purchase a property worth more than AED 5 million without a mortgage are eligible for a 5-year resident visa. Check to see if you match the qualifying requirements for these property-linked visas.
- What rental yield can you expect from your investment property?
Buyers who wish to buy an investment property, or who plan to turn their house into one later in life, must consider if the estimated rental yield will be enough to cover their mortgage payments and ongoing maintenance expenditures. Inexperienced buyers may misinterpret a current rental prediction as the amount they may anticipate receiving each month for the life of their loan. Markets, on the other hand, can be fickle. In this case, it’s essential to seek professional help.