We all know that Real Estate deals with property, its ownership, sale, purchase, lease and renting. The ownership of a property covers the land, its resources, the airspace above the land (to an extent), and any type of structure build on the land. The term itself refers to ‘real’ or ‘physical’ property and all the works that come with it.
The Real Estate Industry in The UAE:
The UAE all along has acquired most of its revenue from trading in oil. However, since of late, this trend has taken a complete turn with a shift of focus to other sectors for income and revenue. Real Estate, among other major growing sectors, is one such area of interest. For decades together, Real Estate in the UAE was owned by locals and leased or rented out to businessmen, families, individuals and corporates.
The whole industry revolves around the transfer of ownership or rights to use a property under the terms agreed upon. In lay terms it revolves around buying and selling property, and with agreed rentals and leases.
The Real Estate market in the UAE is far from predictable with the large-scale and breathtaking projects that are out of this world. With changes to local law, individuals of other countries can now own property in investment areas around the UAE.
Early in 2016, The Khaleej Times addressed this change in policy in their post “Attention Expats! You can own land in the UAE”, in which they brought to light how these changes now allowed expats to buy freehold plots in the Dubai World Central. Though these changes opened new streams of foreign investment in land across the Emirates, only GCC nationals can obtain a freehold title to their property. Other expats who are not GCC nationals can buy land under two types of schemes, namely Usufruct and Musataha.
The Usufruct scheme grants expats the right to benefit from the purchase of a property belonging to a third party. However, the terms of the agreement state that the buyer does not gain the right to make any physical changes to the property. This type of ownership is the most common type of expat apartment purchase, which grants the buyer ownership of the property for 99 years.
The Musataha type of agreement allows the buyer to acquire ownership rights to the property for a period of 50 years at the time of the purchase. However, unlike the usufruct agreement, the owner is granted the right to use the land any way he seems fit. This means that the buyer is allowed to use the land for construct any structure, take a mortgage, and sublet the property in his name. This type of agreement is more common with the purchase of villas and land in investment areas. Even though the buyer is granted ownership for 50 years, after the expiry of the initial period it can be extended for another 50 years with the mutual consent of both parties.
Though most developers advertise freehold rights, conditions apply that these rights are only available to GCC nationals and not all expats.
Apart from these few areas where freehold ownership of land is allowed, most of the land in Dubai is only allowed for sale to locals. With expats on the other hand, across the most of the UAE, Real Estate mainly scales across rentals and leases for both commercial and residential purposes.
Real Estate brokers, agents, and agencies have always been the bridge between sellers and owners, and an ocean of genuine and speculative buyers. Whether sales, rentals or leases, these agents know the ins and outs of the property market. Acquiring these services don’t just make finding a place easier, but also faster and smoother. Through these agencies, you could have access to a broader database of properties, as well as a better choice of options to choose from. Moreover, the best part about acquiring these services is the possibility of getting a deal that could fall more in your favor. A real estate agent is a good at negotiating and can help both parties come to agreeable terms.
Investment Areas in Dubai:
The main investment areas open to expats and non-GCC nationals are The Pearl Jumeirah, Dubai South, and Business Bay. Expats can also purchase freehold land in secondary locations, such as Dubai Sports City, Al Furjan, and Jumeirah Village South.
Investment Areas in Abu Dhabi:
Some of the most demanded Real Estate in Abu Dhabi includes land in investment areas across the Emirate. These areas include Al Reef, Hydra Village, Reem Island, Yas Island, Saadiyat Island, Raha Beach and Hydra Village.
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