This cannot be narrowed down to one particular factor. A plethora of factors exist namely:
a) The liberalization of the real estate sector – ex-pats can now own property
b) High tax-free yields on freehold property rental
c) Globalization and its effects on property prices in metropolitan cities worldwide
d) Favorable interest rate environment
e) Mortgages & homeowner finance available
f) Granting of “permanent” residency upon purchase of freehold properties
g) Great Value – Real estate land & apartment valuations are cheap compared to international prices
h) Conducive lifestyle: safe, tax haven, secondary and tertiary home for international buyers
i) Dubai’s robust economic growth p.a.(GDP)
j) Dubai’s robust population growth p.a.
k) Large mid-income population bracket with high disposable income
l) Dubai is the regional entrepôt & tourism center
m) UAE is an open, welcoming & tolerant state with investor-friendly business policies
a) Is the homeowner (mortgaging) financing available on freehold properties?
Home financing is available from the following sources:
All Nakheel real estate projects from Nakheel’s home finance subsidiary
Emaar projects from Emaar’s home finance subsidiary, Amlak.
Mortgages are offered by the following sources:
RAKBANK -offers mortgages only once the project is completed.
A range of other banks and financial institutions are starting to offer mortgages as well, with varying criteria. No financing institution is offering mortgages on freehold developments of any private developers as yet.
b) How do I get finance?
A checklist of loan criteria exists with each loan providing entity. The loan criteria need to be fulfilled and the purchaser is mandated to provide the necessary documentation which includes but is not limited to: Copy of passport(s) for property purchaser(s), Bank Statement(s) of property purchaser(s) for 1 year, Credit History – Credit Bureau report (EQUIFAX, D&B, etc.), bankers reference, credit card report.
c) When does the financial institution start charging interest?
This depends on the bank. In most cases, interest is accrued during the construction period. The purchaser would have to pay/clear this amount on handover. The purchaser will have to repay principal and interest installments for the tenure of the loan.
d) What will be the APR or Interest Rate? What is the compounding method?
This varies from bank to bank between 5.5% to 6.5% p.a. payable on a declining principal balance. It may be monthly or quarterly.
e) What are the mortgage tenures?
Between 5 to 15 years depending on the financial institution.
f) Do banks or financial institutions send the statement every period to our overseas address?
Yes, which could be monthly or quarterly.
g) Who should we make the payment out to?
Payments should be made out:
To the property seller for down-payment amounts OR
To the financial institution for loan repayments.
h) Is a mortgage registered at the Govt. of Dubai Lands Dept.?
Yes, when the purchaser’s financing becomes a realty mortgage, it gets registered on a per property basis at the Govt. of Dubai Lands Dept. Mortgage Section