Legal and Financial
With the Dubai property market pretty much still in its infancy the legal and financial framework is evolving on an ongoing basis. Dubai Luxury Homes meets regularly at industry forums, our bankers and lawyers to ensure that our staff has the latest information available to them.
Legal
In many parts of the world it is usual practice to enlist the services of a lawyer when purchasing a property but this is not normally the case in Dubai. Contracts are drawn up by the developers themselves and money is usually directed straight to the developer’s own Escrow account which must be in place prior to the launch of a project or through the agents' own clients' account. If a client wishes to seek advice on their purchase, Dubai Luxury Homes can recommend a local law practice that has worked closely with our clients in the past.
Financial
Properties are paid for by a series of payments spread over the construction period. Payment schedules tend to be quite evenly spread requiring the majority of the purchase price to be paid before completion. All developments vary but typically the purchaser would be required to put down 10/ 15% booking deposit followed by 10/ 15% every 3 months or even up to 20% installments in some cases.
If you are buying a property on the Dubai market then you are likely to be required to pay a 'premium'. The premium represents the profit on the original sale price. Properties in developments such as Signature Villas on Palm Jumeirah have changed owners more than once so the premium being asked for may only represent a small profit for the previous owner. It is important not to get too hung up on 'premiums', rather you should look at the price per square meter or foot, the location and facilities.
Lending
The mortgage market in the UAE is still fairly young however with an increasing number of banks offering lending, more competitive terms are beginning to be offered to borrowers. Typically for residents of the UAE 80-90% finance is achievable with 70% for non-residents.
The private developers are generally tied to one or two lenders and offer a set percentage loan. Some private developers offer no lending at all which must be considered when investing as an end user or in the case of those looking to achieve a capital gain.
This market contiunues become more competitive (currently in excess of 20 lenders in the market including an increasing number of international banks such as Standard chartered, HSBC, Lloyds TSB and Barclays Bank) and improve as more properties come to completion and will be a contributory factor to continuing price rises.
We have built close working relationships with Banks and mortgage advisors in Dubai and the UK. We will be pleased to introduce you to these companies to assist with your purchase.