Free Resource - A guide to the Middle Eastern Property Markets

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totallyproperty

Administrator
Staff member
Middle East property

The Middle East has long been a conundrum for investors and business owners due in the main to a very different political and regulatory environment. There are obvious differences between the Middle East property markets and European markets but there is no doubt there are opportunities for lucrative investments across the Middle East region.

Dependent upon oil

Oil has been a major component of the Middle East economy for many years now and will continue to be so long into the future. If you dig a little deeper you will be surprised to learn that not all countries are as dependent upon oil as you might think. We have seen a significant increase in the services sector across the region not to mention property investment. So, while it is obviously very useful to keep a close eye on the oil price this is not the be all and end all of the region.

Political uncertainty

There is a very different type of politics across the Middle East and while from time to time we will hear of new political trends and movements, more often than not they come to nothing. There are some very powerful figures in the Middle East and while there have had to dilute their influence somewhat to attract overseas investment it is a very different environment to that in Europe and the US for example.

The economy

As we touched on above, the economy is heavily dependent upon the price of oil but there are also other prosperous areas such as property investment. This particular area of the market obviously depends upon a strong economy and the creation of new employment opportunities. The expat community has a significant influence on real estate investment in the Middle East although unfortunately expat workers are often the first to lose their jobs in challenging economic times.

Property regulations

As we saw with the rise and fall of the Dubai real estate market, property regulations in some of the Middle East markets do not compare favourably to the likes of Europe. Investor confidence plays a major role in any property market and therefore the ongoing improvement in regulations will help to increase activity in the longer term. It is all good and well having the best prospects in the worldwide property market but unless there are regulations to protect investors and developers there will be issues.

The future

Many experts believe that the Middle East real estate market is something of an untapped treasure which is now being reflected in rising property prices. The key to overseas investment in the Middle East will revolve around tighter regulations to protect investors as well as the removal of restrictions on overseas investment. In many ways it is the stigma of years gone by which continues to impact the impression which many property investors have of the area. As this stigma fades we will see an ongoing increase in overseas real estate investment which bodes well for all involved.



However, bear in mind that regulations are different across the Middle East and you need to know your market if you are investing in real estate.
 
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bin_3loush

New Member
I wish you wrote a book explaining more about these topics, such as the differences in ME and europe real estate.


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Ishan

New Member
Thank you for the relevant information. I would also like to mention the concept of freehold and leasehold properties in Dubai.
What is freehold?
If you own the building and the land both till perpetuity and it is registered in your name then it is essentially a freehold property. It is pretty much always preferred over leasehold. In addition to this freehold property owners and their families get renewable residence visas. You can buy such properties only from govt. approved real estate agents or developers.

Advantages

· Complete ownership and owners can make changes to the structure of their homes.

· Held till perpetuity and transferred through generations.

· Authority over buying and selling

· Renewable residence visas for families.

Disadvantages

· Responsibility of maintenance.

· Availability is designated areas only.

What is leasehold?

It means that you lease the land from a freeholder to use the land /home for a limited no. of years. The max no. of years you can lease a home for is usually 99 years after which you lose the lease and control is transferred over to the property owner. In leasehold the buyer is granted the rights to the unit only and not of the land on which it is built on.

Advantages

· More buying options as leasehold is available in a number of areas.

· It can be renewed at the end of the term, thus can continue to live on the property.

· Mostly the landowner is responsible for maintenance of the property.

Disadvantage

· To make changes to the unit such as renovation, remodeling or alteration you have to make permission from the landowner.

Which one should you buy?

Practically speaking freehold property gives you more control as compared to freehold. But 99 years in also a long time and it all depends on how far down the future you are thinking. If you plan to live in the country for a long time then the best option would be to freehold a home that you and your family loves and would want to keep it in the family. However, if you’re a seasoned investor and have short term goals then leasehold is the right option for you. No matter which option you choose it is important to understand the responsibilities and legal rights of each type of ownership.
 
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diyhelp

Active Member
On the subject of Dubai I see that Warren Buffett is doubling up on his exposure to the area - expanding his office and bringing in more advisors. Is the down turn which began in 2014 about to end?
 
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Sonalia

New Member
Agreed! It is extremely important to do your research before any investment.
 
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LegalHelper

New Member
My advice would be to diversify your risk, which is an obvious one that many investors miss. A portfolio with a mixture of flats & houses, spread across different areas and with different reputable developers, , even different Emirates, should be the ultimate aim of any property investor who wants long-term security in the UAE.

The UAE could potentially be a very profitable market for anyone,but like any place, there are always risks involved with investment, and that risk is doubled if you put all your eggs in one basket.
 
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Kmazher1

New Member
In December 2018, Damac sale & marking peson contacted me and offers me to buy offplan: houses, apartment & plot. I agreed to buy a plot and transferred booking fees to their bank account and then traveled to Dubai in Jan 2017. I visited the Damac office and selling drive me to view the project, but after one year, I acknowledged he took me to view Damac hill rather then Akoya Oxygen.
Anyway, I signed agreements 28th Jan 2017 tha didn't includes about any other charges exception of Total sale price & 4%DLD registrations fees. I have paid all the payments by Nov 2018. Damac then emailed me another bill in Feb 2019 consists additional charges.
total amount: 76819 AED

Damac revied and slightly reduced their charges invoice 28 Jan 2020
To get Title Deed:

Affection plan charges: 1,020.00 AED Provisional Master community charges: 5250.00 AED

Title Deed Delivery Charges: 210.00 AED Plot upload fee: 390.00 AED
Survey Fee: 1,000.00 AED
Title Deed Fee: 787.50 AED
DSR fees: 1,056.00 AED
Total: 9,703.90 AED

Beside Other charges requires to pay for to build house on the plot:
DEWA NOC Fee: 1000 AED
Demarcation NCC Fee: 2000 AED
Building Permit NOC Fee: 2000 AED Commencement of work NOC: 2000 AED
Deposit: 50000 AED
Plus 5% V.A.T

Beside have introduces a lot of
Violation & Penalties during construction.

Working without permits: 2000 AED

Working Without the Authorized Approvals: 10000 AED

Closing Road without Approval: 5000 AED Causing Damages in Commons Area: Depends on the damages.

Using space out of the plot limit as storage: 5000 AED

Working outside of the community timing: 2000 AED

Working out of the property installed fence: 2000 AED

Improper rules of safety rules and regulations during work: 5000 AED

Vehicles not following speed limits: 2000 AED.
Dubai RERA development report of community Hawtorn March 2020: 2%
Beside Damac properties selling Hawtorn plots for 40% less in 2020 then in 2017

I would like anyone's review all the detalis and advice me, if they have got knowledge to deals such kind of issues.
 
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lookinginvest

Member
Is the Middle East a viable alternative to Europe which has had some serious ups and downs last decade or so? I keep hearing that the Middle East is starting to switch from oil to renewable energy sources, surely this won’t be straightforward?
 
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Hazel Ryan

New Member
It’s absurd to say you can’t invest in the real estate market in the UAE or that it’s any less lucrative than any other markets across the globe. Let’s take a look at the UAE’s regulations and restrictions. A lot of people think that just because there isn’t complete ownership in leasehold zones don’t really factor in the freehold zones that are available. Not to mention that leasehold ownership is of 99 years which is a significant period of time for just about anyone. In Abu Dhabi, the freehold zones are:
• Yas Island
• Saadiyat
• Reem
• Mariya
• Lulu
• Al Raha Beach
• Sayh Al Sedairah
• Al Reef
• Masdar City.
 
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