Than apartments in Dubai surprise foreigners
What is an obsolete fund in Dubai, how private developers differ from the state, how developers attract customers, and what they try to “cheat” … Together with an expert on the UAE real estate market, we understand the details that surprise foreign buyers.
About the nuances of the real estate market in Dubai says the director of AH Capital Victoria Shabalina, who has been working in the real estate industry in the UAE since 2009.
10-year-old apartment – outdated housing stock
Since 2015, fire safety requirements have changed. Already officially banned the use of previously approved materials, as standards have increased. Entering the building built before 2010-2012, you will feel that this is a different quality. Maybe an apartment there can be bought cheaper, but in terms of maintenance and repair it is still another level. By local standards, a house built 10-15 years ago is an obsolete foundation.
Apartment in the Marina Gate building in Dubai, which is being built according to new building standards
Developers give profitable shares and installment plans
Now in the UAE market is the buyer. Many developers offer such conditions that a few years ago it was impossible to even dream of. Government developers, such as Emaar, provide interest-free installments for two to three years after entering the finished apartment for the second 50% of the cost of housing.
Developers are “cunning” with the meter to attract buyers
Discounts and promotions in the real estate market in Dubai are many, but they must be approached selectively. The latest trend – the reduction of footage. For example, the developer announces the sale of one-bedroom apartments at a price lower than that of competitors. But if you carefully consider the proposal, you will notice that the cost per square meter is the same, and the footage of the apartment is less by 10-20%. At the same time they make such layouts that you will not immediately feel the difference.
Very small developers offering lower prices cut the area even more significantly – up to 40%. It’s hard not to notice. But many people just turn a blind eye to this or don’t understand why the price in a particular project is much lower than in all others.
You need to know that any developer has a margin of error of 5% of the declared area. This means that if you were promised an apartment of 100 sq. M. m, then you have to get 95 square meters. m or more (otherwise the developer will be required to pay a penalty).
The possibility of resale apartments under construction is regulated by contract
In Dubai real estate can be invested for a short time. For example, to buy an apartment at the stage of the excavation, and when the frame will be built – to sell. The law does not prohibit this, but you must read the contract very carefully: the conditions and possible restrictions are stated there. Usually, in order to have the right to resell the object, you must pay the developer from 30 to 50% of the cost of the apartment. These restrictions were created in order to avoid large scale speculative transactions (the maximum was in 2006-2007). Now resale at the stage of building less.
Property Examples in Dubai
Apartments from private developers are cheaper, from state – more reliable
The advantage of a large state builder is that it develops sites in a comprehensive, whole area, – Emaar, for example, rebuilt half the city: Downtown, Dubai Marina, Greens, Springs, Meadows, Emirates Hills.
Private developers (and they usually build a point) you can buy an apartment cheaper. But often there is no well-developed infrastructure, parks, etc. You will have to wait until the developer “does something once”. But it is the infrastructure that influences the demand of tenants and the size of the rates.
There are also other pitfalls of buying from little-known private developers. Yes, their prices are lower (although not always). Apartments that large developers sell conditionally for $ 280 thousand, for small firms can be found for $ 120 thousand. But these developers are not tested, without reputation. Despite the regulation of the industry by the state, there is a certain amount of error, for example, in the quality of materials, building maintenance. And the risk is high to get not what you expected. We avoid such companies.
The complex will be built in any case, there is no danger. In Dubai, there are state-controlled escrow accounts of projects. This means that any buyer transfers money not to the developer, but to the account of a particular complex, which is monitored by the Land Department. But according to the law, any developer has 12 months for “force majeure” – the delay in construction. Some companies use this temporary corridor.
As in any field of activity, there are exceptions. Recently a strong player has emerged among private companies, a clear leader. The owner, Robert Booth, has been the CEO of the Emaar developer for 15 years. In 2014, he opened his own company, which builds boutique apartments of the highest quality. In the first buildings that the developer erected in residential areas, Bout personally checked all the apartments.