Thousands of investors took a hit when Dubai's property market crumbled and the off-plan frenzy came to an end. No longer attractive to short-term investors, we wondered why anyone would buy there now. So, for an update on this unique destination, we spoke to Jonathan Fothergill, director of UAE Valuations at Cluttons UAE.
Given new stock is still coming to market in Dubai (Jones Lang LaSalle recently forecast another 25,000 units in 2011 alone, be they for the large part on projects started previously), is now a good time to buy there. Is it worth waiting for prices to come down?
Will property in Dubai ever attract the kind of short-term investors, those who perfected the art of flipping, as it did before the crash in 2008?
How much have rental values been affected by the saturated market? If you're thinking of moving to Dubai and intend to rent a home, can you get a good deal on the rent you pay?
In which areas would you recommend buying a lettable key-ready holiday apartment in a completed development? What are typical price points there?
For sale in Dubai
Where: Arabian Ranches Price: AED4.1million (£686K)
Where: Park Island, Dubai Marina Price: AED4.2million (£703K)
ESSENTIALS - BUYING ADVICE Claire McCarthy, a solicitor at Dubai law firm James Berry & Associates, outlines the key things to be aware of when buying a completed property in Dubai.
Title - Request evidence that your seller actually owns the property, by asking to see the title deed.
Fees - Aside from the purchase price, the two main fees payable will be the Land Department's transfer fee and the broker's fees. The Land Department's transfer fee is two per cent of the purchase price. Sellers would prefer that the buyer pays the full two per cent but there is no reason why that should be the case. A fair compromise would be that it is shared 50/50. Likewise in relation to the broker's fee. If there is a real dearth of buyers and the broker is keen for the sale to go through, he may even be prepared to negotiate on his fee.
Tenants - If the property is let, ensure that the tenant will actually vacate the property if you want vacant possession on completion. Tenants have extensive rights pursuant to Dubai law. Even if the landlord wants to sell the property, then in the absence of any default on the part of the tenant, the landlord would need to give the tenant at least 12 months notice prior to the determined date of eviction.
Service charge - Request detailed information on the current service charge budget, and in particular the amount payable to the owner of the common parts of the building and also to the master developer in connection with the master community.
Inheritance - In order to minimise legal hassles on death, it is important to ensure that a valid will is put in place, which covers your property in Dubai. In the UAE, succession of real estate is a grey area and the court with jurisdiction to deal with inheritance issues is the Sharia Court. Matters are dealt with case by case. This wide discretion, coupled with uncertainty of the law itself, can leave expatriates with an unfavourable succession solution if no advice is obtained.
Visas - You can apply for a visit visa by virtue of your ownership of a property in Dubai, subject to certain conditions being met, including the property being worth at least AED1million, and the owner proving a personal income of at least AED10,000 per month. If your application is successful, you would be granted a six-month multiple entry visit visa. Alternatively, if you are employed in the UAE or have invested in a business here, you can explore the option of being sponsored by your employer or having an investor visa.