After you have decided to move to Dubai, the next logical question is if you should buy a property or stay in a rented apartment. That’s a basic question related to moving itself, because if you end up paying a huge amount of your proposed income in the new country of your move towards rent then moving away from home might not be such a great idea, after all. That brings us back to our original question again – buy or rent?
In this piece, we will examine whether buying or renting makes more sense in Dubai.
It all started when the crown prince of Dubai decided to make life easier for the expats and issued the Formal decree allowing foreign nationals to buy property, sell property as well as lease or rent property at will. This changed the game for the Dubai real estate market itself.
How? With a long and violent political history of the Middle East in the background, foreigners had always been a little sceptical of buying property. Though Dubai had always been exempt from such problems and traditionally had a stable political regime, yet with the change in the real estate rules with this decree from the crown prince, foreigners were encouraged to think of investment and buying a second home in Dubai.
This decree also put Dubai on the property world map and increased the investment from abroad. With no hidden costs or red tape associated with buying property, Dubai became an investment hotspot – attracting both investors and buyers.
Buying vs Renting…
With eased up rules and a healthy property market, Dubai has become a real-estate investment haven. Expats coming to stay in Dubai, will rent out a place to stay initially. Let’s see, if buying makes more sense than renting in the long-term.
The first question to ask in this regard is – how long do you have to stay? The next is about intention – first decide on the reason for buying property (investment or staying in) – that would help you decide if buying or renting is a better option.
If you are staying for a longish period then buying is more feasible. That ways, you won’t end up burning a huge hole in your pocket and blow up an astronomical amount of your proposed income in the new country.
The property market in Dubai is extremely healthy so an investment makes sense. The property that you buy will definitely increase in value after a few years and you would end up making a handsome profit on the original investment.
On the other hand if you are renting the accommodation then that’s only expenditure/spending for you. A large portion of your proposed income in the country of your move would go towards the rent. When you move out, there’s nothing to show for it. While if you have made a smart investment, when you move out, you sell out and take home the profits.
The rental yields in Dubai is also quite high so if you decide to put it on the market till the time it sells out at the right price, is also an extremely attractive option. You can also keep Dubai as the second home since the property investment returns are huge. It’s also safe to keep the property since the real estate market in Dubai/UAE is extremely organized and a smart option as seen by the investment in property by Hollywood celebrities such as David and Victoria Beckham, Tiger Woods, Giorgio Armani, Jamie Oliver, Hilary Swank, etc.
As far as the financing of the proposed house investment is concerned, the process is fairly simple. Expats have to submit lenders with passport and copies, proof of residence, proof of address, salary certificates or proof for regular income, bank account statements for three to six months, etc. It is also possible to get mortgage from abroad. Since the financial global market crash of 2008, the rules are a little tightened but if you have the intention and ability to pay then it’s smarter to invest in a property in the region.
So, what are you waiting for? If you have that big ticket job to Dubai or have opened up a branch in Dubai/UAE then now’s the time to invest and stay.