You could be one of two things — ready or reluctant. You may have lived here for long, but just not found enough gumption to take the plunge or you may be brand new and simply don’t know how to move ahead. Whatever your position or situation, we have covered everything you need to know before you make the property purchase that is overdue.
WHAT YOU NEED TO KNOW
There is ample protection
A slew of regulations — registration and transaction processes, increases in transaction fees, caps on mortgages and rules for developers — may have a role in the real estate market slowdown, but they minimise the risk of rapid corrections. And these laws protect you and your investment.
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Abu Dhabi: Law No. 3 of 2005, Law No. 19 of 2005, and Law No. 3 of 2015 Dubai: Law No. 27 of 2007, Law No. 13 of 2008, Law No. 9 of 2009, Executive Council Resolution No. 6 of 2010, and Law No. 7 of 2013 Ajman: Emiri Decrees No. 7 and No 8 of 2008, and Local Order No. 4 of 2008 Ras Al Khaimah: Decision No. 20 of 2005, Decision No. 12 of 2007, Emiri Decree No. 15 of 2006, and Emiri Decree No. 22 of 2008
A buyer’s market
Residential property markets in Abu Dhabi and Dubai are showing signs of decline as they continue to remain unenthusiastic in the wake of falling oil prices and extensive layoffs.
However, this presents great investment and growth opportunities too. If you have a long-term view, the best time to purchase property is around the bottom of the cycle, which is now.
Things are changing
The UAE’s real estate market is being redefined in subtle and obvious ways and now accommodates relatively new facets such as ready-to-buy properties and mid-range and affordable housing with a redrawing of urban boundaries. As an illustration, a significant amount of new developments in Dubai are in secondary locations such as Mohammad Bin Rashid City and Dubai World Central and these will extend inland over the next few years .
FOLLOW THE SIGNS
According to the Dubai Land Department, 26,000 investors comprising 149 nationalities made investments worth Dh57 billion in the emirate in the first six months of 2016, making it one of the world’s best property destinations.
It will be lucrative
If you disregard the current atmosphere and adopt a mid-term view of the next four years or even longer, you will realise the UAE property market is a sound investment platform. Investors in Abu Dhabi are still being rewarded with an average yield of 5 per cent across the city despite a relative flat performance across the first half of 2016.
REAP THE YIELD
Chestertons’ Mena Q2 2016 property report says the yield for Abu Dhabi’s residential market topped out at 8.8 per cent in some areas during the first half of this year.
Bargains on offer
As demand weakens and property prices continue to fall, there is fierce competition and this will work dramatically well in your favour. Property developers are slashing deposits, offering deferred payment schemes and coming up with innovative plans that may even eliminate the need for you to seek financing.
The bonus factor is that many of these new plans require you to make much smaller upfront payments than the norm.
More choices
Unlike the sector’s early period, dating back roughly a decade ago, when choices were limited to large villas or small apartments, there is a much wider selection of homes being sold across the country. Take your pick from the epitome of luxury on Dubai’s Palm Jumeirah or an apartment on one of Abu Dhabi’s islands.
You can now choose between modest town houses in gated communities and villas, high-rises in bustling neighbourhoods or low-rises in quieter suburbs.
Negotiation works
As things stand, the real estate sector’s pricing dynamic is in favour of buyers and all sellers — whether they are individual or institutional — are expected to be more generous with prices, payment terms and other incentives to buoy demand. If discounts or attractive offers are not being presented to you, you are entitled to ask for them. Else, simply ask around with others.
WHAT YOU MUST DO
Get it pre-approved
This may sound ambitious or even needless, but you are better off getting a pre-approval for your mortgage before you start the process of purchasing a property. Initiating the mortgage pre-approval process at an early stage will save you a lot of time and, more importantly, it will help you define a budget for your new home. Visit websites of different banks, narrow down your choices, and pursue the ones that are most promising.
Investigate details
If you plan to buy directly from a developer, research the company’s credentials and reputation — search online, talk to other owners, ask around for opinions and visit the developer’s other projects or communities.
Dealing with an individual seller may not be as easy. Among the many documents you will need to see are a valid title deed, ownership of ancillary items such as parking bays and proof of up-to-date payment of service fees.
Check credentials
Almost every individual and institution associated with the property purchase process is required to be licensed, be they sub-developers, owners association managers, appraisers or surveyors. Be sure you deal with people and companies that are registered and have sound credentials.
QUICK CHECKS
Abu Dhabi: Department of Municipal Affairs
Dubai: Dubai Land Department and Real Estate Regulatory Agency
Ajman: Ajman Real Estate Regulatory Agency
Ras Al Khaimah: Ras Al Khaimah Municipality and Real Estate Regulatory Authority
Find an agent
If you plan to buy a home in the secondary market, use the services of a registered real estate agent or brokerage firm. They will save you time and trouble in dealing with all the paperwork, ensure conformity and regularity, and answer all your questions. Saving the agent’s fee can often end up costing you more than the fee itself.
Get a mortgage
If you are already pre-approved, this stage will be remarkably easy, but if you haven’t done it yet, there is no need to panic. Scout around for the best in mainstream and Sharia-complaint offerings and ensure it matches your personal requirements and capabilities in terms of the duration of the mortgage, monthly payments, fees and penalties.
Register everything
If you apply for a mortgage, it will need to be registered. Likewise, after you purchase a property, you have to register it to procure a title deed in your name. If you choose to let it out for a while before you move in yourself, the tenancy contract also has to be registered. The duration of these processes is subject to the readiness or completion of the project, necessary paperwork, and the physical presence of representatives from the bank, developer, or previous owner. It will also vary from emirate to emirate.
Pay attention
Take heed of terms such as short and long delivery dates and clauses pertaining to cancellation or delays in your contract. Do not issue cheques to brokerage firms or agents, unless they have a valid and current power of attorney, authorised by the rightful owner. Read the fine print, study the paperwork and ask for changes if you think they are necessary. Before you sign, ask a lot of questions and make sure they get answered.
