The long awaited Dubai property law has been finalised and reviewed in draft form; it is now ready for ratification. Foreign buyers once hesitant to commit to a marketplace where an element of doubt remained about their legal right to own freehold real estate are fuelling a resurgence of interest in property in Dubai. As hoped, the finalised property law will allow foreign buyers to have the right to own freehold title to real estate in Dubai.

The Dubai draft property law, which consists of forty detailed articles, brings good news for property investors who have already committed to the Dubai real estate market, and it brings encouraging and exciting news for the future of the entire property sector in Dubai.

Furthermore both international and local mortgage lenders are making it easier to borrow to finance a property purchase in the UAE and all in all Dubai is at least as attractive as it ever was for foreign property investors.  This means that it’s high time to draw up a list of the dos and don’ts of buying property in Dubai to prevent false assumptions, poor decisions and costly mistakes being made.

The new real estate law was expected to allow foreigners the right to own property in Dubai in certain designated areas; those who have reviewed the new draft law state that it will indeed allow foreign investors the right to own freehold title to real estate and also to the land on which the property has been built.

There was concern among the international investment community that the Dubai government was dragging its heels over the creation and passing of the new property law because they were planning on backing out of their commitment to allow foreigners the freehold right of ownership of land in Dubai and preparing to change foreigner’s rights to leasehold ownership of land instead.  This would have meant that those who had bought apartments in Dubai would not have been affected but those who had bought villas and townhouses would not have owned the land on which their property was built.

Fortunately these concerns have been eradicated by the new draft property law that clearly states that foreign buyers in Dubai will be permitted to own property and land freehold in certain designated areas throughout the emirate.  In an interesting addition to the property law there is a sub-clause that states that foreigners can also apply for ‘the Ruler’s consent’ for property purchases that fall outside of the remit of the draft law. 

The passing of the law should reignite the flames of the Dubai investment property market that were beginning to fade in intensity.  It is expected that the Dubai mortgage market will now become far more competitive with many international financial institutions committing to the arena now that they know they can hold the title deeds to any real estate that they lend on.  This will allow more investors and home buyers the chance to afford property in Dubai and will increase demand for new and resale homes in the emirate.

Employees of the Dubai Land Department are gearing up for an incredibly busy year during which time they will have to prepare and register the title deeds for all the properties that have already been purchased by overseas individuals in Dubai, and during which time it is expected there will be a resurgence of interest in properties for sale in Dubai.

The rental yield on a property in the UAE is still high by international standards. For example, a typical rental yield on a Dubai villa is 7.5-8%; in London or New York 3.5-4% would be quite acceptable.

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