Buying a house for the first time is a complex process. But if you understand the essentials, you are less likely to face hurdles and undoubtedly find the experience more enjoyable.
Our first-time home buyer guide tells the fundamental steps to homeownership in Dubai, whether you are a Qatari national, a resident expat or an overseas real estate investor.
Is now is a great time to buy a house for the first time?
Investment and lifestyle-speaking – definitely. Dubai’s real estate has long been considered one of the most luxurious. And after the successful vaccination drive and implementation of a residency program for foreign investors in 2021, Dubai’s real estate market is experiencing a time of robust demand and price growth.
Choosing the right community
First, choose a community that meets your needs and tastes. When it comes to the environment, you can choose between a vibrant city community, such as Downtown Dubai, a tranquil sea vibe on Dubai Marina, or for a suburban feel, areas such as Discovery Gardens. Dining spots, parks and entertainment are never far. It is also easy to zoom to business premises on sophisticated public transport or by car.
What types of properties are available?
Second, choosing the perfect property. There is a wide choice for both luxury and affordability. From contemporary apartments to villas and luxury townhouses. The most popular are off-plan apartments in complexes with leisure facilities, which are often agreed on a flexible payment plan.
Choosing a mortgage
If you take out a house loan, you can obtain a mortgage in principle that tells how much you can spend to stay within budget. Fixed or variable rates are available, with fixed plans the most prevalent due to the security of knowing that monthly payments remain the same. In 2022, rates are at a record low. Mortgage Finder, for example, offers 2.69% fixed deals with options for expats to borrow up to 85%, and UAE nationals 90% LTV. The average down payment is 25% for expats and 20% for locals. For buy-to-let investors, the down payment is larger and will secure a place in Dubai’s booming rental market.
Identifying a trustworthy real estate agent
Next is to choose a trustworthy and reliable local agent who will help greatly with your purchase. Reading online reviews and asking around are effective ways to identify the best agent for you. You are welcome to ask our experienced agents, who guide first-time home buyers from start to finish, any questions about our services.
Associated and sometimes unexpected fees will not catch you by surprise if you plan for them.
- Mortgage registration fee of 0.25% of total loan amount.
- A Oqood Certificate for AED 5,250, issued by RERA to register you as the owner of the property.
- Conveyancing cost of about AED 8,000.
- Life insurance is required for all bank loans at a rate of 0.6% of total loan amount per year.
- Real estate agent fee of around 2% of property price.
Fees can vary according to developer and bank.
Then there are the crucial legal steps, managed by your real estate agent or conveyancer. We will use an off-plan property purchase as an example: To start, the purchase contract is drawn up and negotiated if needed. Secondly, the signing of the contract (MOU or Form F) in front of a witness.
After that, a meeting is scheduled between you, the seller and the developer. A letter of permission to transfer ownership will be applied for, and the developer will also issue a No Objection Certificate (NOC).
Finally, DLD registration is completed for 4% of your purchase price. In addition to an AED 580 admin fee if you buy an apartment or AED 40 for off-plan. This final step also requires proof of identity, MOU and purchase.
Spirits are high and the keys are yours!
We hope our advice has cleared up any doubts or questions you have about the basics of buying a house in Dubai for the first time. For bespoke advice, please contact the Mayfair Property team in Dubai today.