Dubai has slowly but steadily recovered from the effects of the Covid-19 pandemic and is now realizing Vision 2021. With barely a few days for Expo 2020 to begin, the emirate’s real estate sector is entering an exciting phase. A recent survey by Reuters pointed out that Dubai’s residential property market will see a modest rise in the prices over the next couple of years, remaining affordable for many buyers in the meantime. At the same time, Dubai Land Department records report that the better economic situation following the successful vaccination drive in the emirate will lead to a continued increase in property sales.
It is interesting to note that, during this period, residential properties are seeing most of the sales. Properties, especially apartments on sale, are attracting a large number of potential buyers to Dubai. With the new and relaxed visa rules and increased emphasis on FDI, expats and foreigners are more interested than ever to invest in real estate properties in the city-state. Industry analysts say that expats who have been in the country at least for the past three years have noticed the favorable market situation and are ready to buy villas and apartments on sale as a safe real estate investment that promises good returns.
With that said, expats and foreigners who are looking to buy properties in Dubai must have a clear understanding of where they can buy properties. Before long, investors used to hold Freezone land by setting up their offshore business enterprises in Dubai. All Freezone companies in the emirate were permitted to own property in certain designated areas. The free zones such as DMCC, Dubai Internet City, Dubai Healthcare City, Dubai South, and many others have companies with 100% foreign ownership. However, business enterprises were not allowed to own land in the Dubai mainland.
However, with residential properties on sale available to expats and foreigners, investors can buy real estate on the mainland. But there is a catch. In Dubai, foreign ownership is allowed in assigned regions called freehold. Expatriate residents and foreigners can acquire freehold ownership rights or a leasehold right for up to 99 years, without an age limit.
So what are freehold and leasehold properties? How do you know if a property you liked is freehold/leasehold? Let us dive into the particulars-
Understanding freehold and leasehold
From a non-national perspective, freehold properties are located in designated areas within the city-state where anyone can buy real estate. These regions are defined by the government and refer to any real estate which is “free from hold” of any entity besides the owner. The owner of a freehold property can enjoy free ownership of the estate and can use it for any purpose per local laws and regulations. By having absolute interest over a piece of property, real estate owners can live in, modify or sell the unit without consent from the state.
Currently, there are over 60 freehold areas in Dubai, including the ones that are under development. Some of them are-
- The Palm Jumeirah
- The World Islands
- Burj Khalifa
- Downtown Dubai
- Dubai Marina
- Jumeirah Lakes Towers
- Jumeirah Beach Residence (JBR)
- Emirates Hills
- Discovery Gardens
- Al Furjan
- Arabian Ranches
- Midriff (specified plots)
- Old Town
- Business Bay
- Dubai Investment Park
- Falcon City
- Dubai Sports City
- Dubai Motor City
- International City
- Jumeirah Islands & Jumeirah Village
- Nshama Townsquare
- La Mer
Expat and foreign investors can look for real estate units such as apartments, villas, and townhouses in these areas and can buy them directly from developers or with the help of top real estate brokers in Dubai.
Now, leasehold properties are different. These properties are available on a lease from a local landlord for a period of more than 10 years, up to 99 years. However, the leasehold property ownership can be renewed at the end of the 99-year term, allowing the buyer and their family to live in the property for longer. The leasehold areas include-
- Jumeirah 1,2 and 3
- Al Safa
- Al Wasl
- Umm Suqeim
- Al Manara
- Mirdiff (Certain areas)
Finding your ideal property
Generally speaking, there are many advantages to owning a freehold property. Investors can enjoy full ownership and control over their property in case of a freehold estate. As landlords, you can make minor or significant structural changes to their apartments or villas and also have the freedom to lease or sell their property as per the regulations of the emirate. Additionally, if you own a freehold property over the value of AED 1 million, you and your family are entitled to a 2-year renewable UAE residency visa.
In the run-up to Expo 2020, the property market in Dubai is opening up with more freehold launches planned, where investors will be able to access areas like Port la Mer, as Jumeirah was previously available to GCC residents only. Similar initiatives are taking place in Abu Dhabi, where 17 communities were converted to freeholds last month. These decisions by the government encourage foreign investors to turn their attention to the UAE, as well as promote long-term investment opportunities, which will ultimately strengthen the economy.
On the other hand, leasehold properties are not limited to designated areas. However, the investors have limited liability to make modifications to the property as it is the landlord’s responsibility to take care of repairs most of the time.
Ultimately, it is the buyer’s discretion as to where they want to invest in Dubai depending upon the type of control and responsibility they want over the property.
While real estate investors can do business directly with the developers, expats, and foreigners who have little to no knowledge of the local rules, regulations, and governing bodies find it hard to navigate the process of buying a property in Dubai. This is where we come in. As one of the real estate companies in Dubai, we can take care of your property sales progression from identifying a suitable unit to getting its title deed. Our experienced real estate brokers will help you navigate every step of the process, providing guidance and support necessary for you to acquire your dream property in Dubai with zero hassle. To know more, contact us today!