Buying Property in Dubai – The Process
Buying direct with our help and support means you will be paying the property developers directly with the security of an Escrow account. Leaving you safely in control of releasing the funds at the right time and protected with the security of the Government backed new laws passed recently.
We work with a team of UK based Independent Mortgage Advisers who can help you raise low cost funding.
With a good majority of our clients raising funds from individual investments not performing well, they also raise funding on re-mortgaging or obtaining an inheritance.
Commercial purchasing also can be arranged and some companies are going in and buying whole projects! With the sole intention of selling off the project at a later date piece by piece.
Working with the Property Developers directly we have no concerns of double deposits as we are updated on a daily basis, however Property is sold on a first come first served basis. Immediately a Property is booked and deposit paid, a telephone call is placed to the respective Property Developer and the selected Property of your choice is then taken off the available market and reserved for you. Once the deposit is received by the respective Property Developer and receipt of the Contract signed by the Clients whether in the UK, Russia or wherever the home country may reside, then you can rest assured and look forward to receiving updates regards your new Property purchased.
Reservation procedures:
- We will need some Personal Details from you (listed below).
- We will then log these with developer and have the apartment allocated to your name.
- The Reservation / Sales Agreement will be either sent out to you or ideally a representative will visit your home or workplace.
- There will be comprehensive Instruction Sheet that will be included explaining exactly what to do and how the purchase process works.
- You need to print out and sign the documents (or we can post these to you) and post these back immediately together with copies of your passport photo pages.
- Make the first payment (The instruction sheet will explain how to do this). The first payment can be made with the help of your bank. We can ask Global Currency Exchange Network (affiliated with HSBC) to provide better exchange rates for you should you wish and handle the payments for you in the future to make it easier. You need to fax or email to us, the proof of payment which you will get from the bank (or GCEN).
- Once these are received we forward your documents and proof of payment to the developer.
- The Developer signs contract documents and issues a receipt. We will send you the developers signed documents & receipt (takes approximately four weeks).
- We will keep in touch and provide any help as and when needed.
- Please feel free to discuss this method of payment with one of our representatives or have them visit your home, where they will gladly run the process by you for your comfort.
Although you have a direct relationship with the developer, we keep in touch with you to keep you updated on the development and also near the time of the completion of your property will offer our services to re-sell or rent-out (if required).
Details Needed For Agreement:
Each Agreement is discussed with clients without any pressure and so as the client has a good and clear understanding of the contract.
- Full names of buyers (e.g. you and your partner if both buying, partners or even the family if necessary).
- Nationality
- Passport Number
- Home telephone number
- mobile phone number
- Email Address to go on agreement
- Full Postal Address (agreements will be sent here)
- Physical Address (if different from above)
Customers do not need to visit UAE or the UK as we handle all the admin processes online and will deliver the developers agreements to customers in their home country. Please contact us for specific information.
Key Risk Factors
Delays
Buyers worry about property construction not starting, thus resulting in delays. Our survey of developers in Early February 2009 showed that they all intend to complete projects that have been launched and in fact want to construct sooner than planned as current construction costs are lowest (steel has halved in price) and these may rise again by next year. However, projects that have already started construction are the least risky with regards to this issue. Projects that have not started construction or where no definite timeline is given for start and completion would carry a higher delay risk. Damac announced $2.9 billion of investment in May 2009 on seven new projects!
Currency Exchange Rates
Property is always priced in Dirham (AED) which is priced against the USA Dollar. The recent strengthening of the UK pound means that property prices are improving for the UK. However, this also means that rents are higher and when customers sell their property the return and profit in UK £s is also higher. On average, the exchange rate affects the cash flow, but not the overall profitability as things balance out unless you happen to be unlucky. It is best to buy property under your budget, to allow for exchange rate effects on cash flow. However, please feel free to speak to one of our advisers.
Money Security
This is has always been a concern for buyers. However, UAE remains amongst the safest places in the World to buy overseas property. Dubai & Ajman markets are regulated reasonably well, Escrow accounts and new rules are being introduced to protect investors with new development launches. Customers can also reduce their risk and increase their influence by using ‘Client Account’ facilities where funds legally belong to the customer.
Rent & Growth
Will my property grow well and will I be able to rent it easily? Rents remain very high and the availability of ready property remains tight compared to demand. With the cancellation of future launches this is likely to remain so. Ready property is easy to rent in UAE. Growth rates are likely to be best for property which is lower priced. Growth is expected to be slow from now until the end of this year, but high over next few years as properties will be in short supply.
GENERAL ADVICE – COMING OUT OF THE CREDIT-CRUNCH
Buy Under Construction
This reduces the risks of delay, and means you have use of property or rent sooner. Select property that is under construction or will be ready within about 2 years. Property that is already constructed is also good but means that you have to pay for all the money up-front and this may not be the best form of investment. You will also be paying a Prime Price as the original owner will want a return on their initial investment.
Buy with Long Payment Plan
This reduces your financial risk, currency risk (averages out over long period), and makes a larger property more affordable. It also makes the property easy to sell after completion. If you are an investor you can use rental income to pay for part of the property. It can be tempting to buy from sellers in the resale market but you will need to pay a larger amount or the whole amount upfront. However the overall price can be better and we also have access to such property. Buy to let mortgages may be available in the future and will enable investors to easily release part of their equity.
Buy Lower Cost Property
This is likely to grow better and is less risky than a “prime” more expensive property on the seaside/palm islands. In a downturn, lower cost property will be less affected. However, if you are buying for yourself and need a particular location, then you may have no option but to buy in that area.
Buy with Friends or Family
This is more frequently happening as we are seeing people, family’s and friends purchasing a better property between them selves, thus owning a share in the property and also benefitting from a greater investment.
Buy for Long term – not short term.
Long term growth is likely to be good due to forecast shortages in a few years. Buying to sell after a few months (as speculators used to do) is highly risky. Most current customers plan to keep their properties and either rent out or use themselves. They should do very well. Some of the deals we can offer from the Developers have a rental scheme in place managed by some of the world’s leading Property Management teams. See further for details:
Have Sufficient Funding
Do not overstretch yourself. Buy a smaller property or do not buy if you are not sure about your funding. Make sure you have enough to see your property to completion.
IS NOW A GOOD TIME TO BUY? – Certainly YES!
A Finishing Buyers Market
You can get good deals with developers right now. Yet the deals are running out as the projects are being sold. Yet there are a small percentage of customers who purchased last year and who want to sell their property because change of personal circumstances (mainly due to bitten recession effects). Thus, providing you have funds available, you can purchase at a good price and get a bargain. Get in touch and we will contact our database and help where we can.
Buying Activity – recently increased
This means that the best deals are being mopped up now and within the next few months. At some point it will be a seller’s market. This is likely to be sooner than people expect as there are very few new launches. Damac in May 2009 have informed us and the worlds market place that they are spending 2.9 billion on seven new projects in 2009.
Shortage of Property Risks.
Developers are more cautious about launching new properties. The property build cycle is 3 years. Many analysts now forecast a severe shortage in a few years time.
The main risk of not buying sooner rather than later is that when the market starts going up in price, it may be a sudden jump, just like it was a sudden drop in October last year. Also, the properties that are under construction are likely to be sold by then, and once again the properties that are available with good payment plans will only be the ones with longer build timelines of 3 years or more. Don’t forget, people from all around the world are buying here, Russia, Nigeria, America, UK, Ireland, Germany and Australia are just some and it still is one of the safest and also soon to be one of the leading and most prestigious places to have property in the world.
