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Hi Martin,
Good luck with your business, just thought i should post this for everyone who is not here in the UAE and may not be aware what is going on right now:
http://www.reuters.com/article/marketsNews/idUSLD36506920081113You would have to get a lender here in Dubai, which is possible – you don’t need to be a resident here to get a home loan with a local lender (for some you do- just depends on lender). But you need to check which lenders will lend for the development you are looking at.
For a start, only certain areas in Dubai are designed for foreign (non-local) ownership. And then within these areas, each bank has a list of developments or developers which they wil lend for – which is not standard – varies from bank to bank. The banks all list the developments they will lend for on their websites.
Generally you won’t find a loan for more than 80% LVR, and usually 70% for units. The loan terms are often limited too – 15 years for units and 20 years for villas. But this is open to negotiation. They will not lend such that the loan term brings you past your 65th birthday either (for some lenders it is 60 years age – this is because the enforced retirement age is currenty 60, but they are changing it to 65, and they don’t want you out of work and not able to repay).
I would be careful choosing property here. Things are necessarily as good as they might look when advertised. I agree with the comments made by rach001. You can make a good buy here, but you can also spend way too much on a poor quality development. i have seen 2-bed apartments in Jumeirah Beach Residences advertised for between 3 and 5 million AED. And all you get is a tiny, poor quality (Mertion-style) unit, in a development of 7000 units- hardly gives you the scaricity value you are after. And above all else, the price you are paying is way above market compared to what else you can buy in Dubai right now. There are places you can get good 3 and 4 bedroom villas for that sort of money.
Anyway, just my opinion.Here are some websites for finance to look at:
http://www.tamweel.ae
http://www.lloydstsb.ae
http://www.hsbc.aeSarah
Frank,
I have to agree with the general sentiment of comments posted by Jason. I am originally from Sydney, but have been living in Dubai for nearly a year now. On paper it looks like a no-brainer – with rental yeilds at around 10-12%, it looks like an easy decision to invest here. However the amount of projects in the pipeline is just phenomenal, and it’s such a new market here, it doesn’t have the history that the property market has in Australia (eg. in Australia you can be pretty confident that if you buy the right property you can get at least your average 7%p.a. growth on average). Whereas in Dubai, everything has been built in the last ten years.
And another important aspect of the market here is that there doesn’t seem to be the rigour that there is in Australia regarding project feasibility – developments are built for reasons other than economic – eg. for status, money laundering, etc. That means you get a market that may be artificially inflated – it is not driven by market forces only.
The market here is not very transparent either. To get a good deal, it’s all about who you know.
And one more thing, it’s a very fragile market here. You never know what will happen in this crazy world. In the Middle East, Dubai is regarded as one of the most politically stable countries, however look at Lebanon, it was the “Paris of the Middle East’, regarded quite safe – no one predicted what is happening now. If a terrorist attack or something happened in Dubai, I don’t think it could recover.Dubai is an awesome place, but to invest here would certainly be a gamble.
Sarah
