There is a boom beginning in the UAE’s property market.
This week, Dubai doubled the registration fee charged on real estate transactions; it went from two percent to four percent in an effort to prevent excessive speculation on its property market. It’s anticipated that the increased registration fee will cool down the market there and boost the sale of property in Abu Dhabi, since the registration fee here is still only two percent.
Many people are unsure if it’s better to buy or rent property in Abu Dhabi. Renting gives people greater flexibility, particularly when they first arrive in the capital and are unsure of the best location to live in, and are focusing on job stability, etc.
Expats need to live in Abu Dhabi for a minimum of six months before they can apply for a mortgage, so it makes sense to rent initially and spend that time looking at all the different options.
Mortgages are freely available in Abu Dhabi and can be fixed for the first couple of years with an interest rate of around five percent. The mortgage needs to be repaid by the time the borrower reaches the age of 65, and the minimum amount that the buyer needs to put down is twenty percent of the property’s value.
One advantage of purchasing a property is, mortgage repayments would work out to be considerably less than the cost of rent on a similar property. And of course the property can be retained if the owner returns to their home country. If this happens the property could be used as a holiday home or let out to tenants and managed by a real estate agent, such as Cluttons.
As the market develops, this option is becoming a more popular choice, with an increasing number of expats thinking about letting out their property after they leave.
One also needs to decide if you are buying as an investment or as a home. For example some of the highest percentage appreciation has been at Al Reef; for those that bought property say a year ago, this has so far proved to be a good investment.
At the moment, non-UAE nationals have four options for buying property; they can choose between Al Reef, Al Raha Beach (excluding Al Raha Gardens), Al Reem Island and Saadiyat Island.
Reem Island and Al Raha Beach properties are primarily apartments, although Al Raha Beach’s Al Muneera have interesting townhouse options, all of which come with their own private pool.
Al Reef features two, three and four-bedroom villas and apartments.
What’s new?
Saadiyat Island has a variety of villas and apartments. Only last week the Tourism Development & Investment Company (TDIC) released 70 apartments for sale as part of Saadiyat Beach Residences’ second phase.
One, two, three and four-bedroom apartments are available to buy, with prices starting from AED 1.4 million. Residents have access to facilities including a swimming pool, outdoor barbecue facilities, tennis and basketball courts, a retail outlet and
gym. The apartments range
in size from 90 to 235 sqm
and are available in two architectural styles – arabesque and Mediterranean.
There are also villas that can be bought off-plan for completion in 2016 and plots of land on which you can have an architect design your own villa.
At the other end of Saadiyat Island the Saadiyat Development and Investment Company are developing a complex of villas, due to be completed in 2016.
The majority of these are sea facing and are of a design similar to those found in
the Caribbean.
To conclude, in the short term it is most probably sensible to rent but, for the longer term buying is an option that should be considered.
