How New Residents Are Beating Rising Rents by Buying Properties in Dubai Within 2 Years of Arrival
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How New Residents Are Beating Rising Rents by Buying Properties in Dubai Within 2 Years of Arrival
Dubai, known for its luxurious lifestyle, modern infrastructure, and world-class amenities, has become a magnet for expats and foreigners looking to start a new life. However, the city’s popularity comes with a price – rising rents. In recent years, Dubai has witnessed a significant surge in rental prices, making it challenging for new residents to find affordable housing. But it seems like new residents have found a way to beat the rising rents by buying properties within 2 years of arrival. In this blog, we’ll explore this trend, its benefits, and what it means for the Dubai real estate market.
The Rising Rent Challenge
Rents in Dubai have been on the rise for the past few years, with some areas witnessing an increase of up to 20% in just 12 months. This has put a strain on the pockets of renters, especially those who are new to the city. The rising rents have made it difficult for people to find affordable housing, leading to a decrease in the quality of life. However, it seems like new residents have found a solution to this problem.
The Shift to Buying Properties in Dubai
According to a recent report, new residents in Dubai are now opting to buy properties within 2 years of arrival instead of renting. This shift in behavior is driven by several factors, including the rising rents, the desire for stability and security, and the long-term benefits of owning a property. By buying a property, new residents can avoid the hassle of dealing with rising rents and enjoy a sense of permanence in their new home.
Benefits of Buying a Property in Dubai
So, why are new residents opting to buy properties in Dubai? Here are some benefits:
- Stability and Security: Owning a property provides a sense of stability and security, which is essential for families and individuals who plan to stay in Dubai for an extended period.
- Long-term Investment: Real estate is a lucrative long-term investment option, and Dubai’s property market has shown significant growth over the years.
- Tax Benefits: Dubai offers attractive tax benefits to property owners, including no income tax and low property taxes.
- Rental Income: Property owners can earn rental income by leasing out their properties, providing a steady stream of passive income.
FAQs
- Is it easy to buy property in Dubai?
Yes, buying a property in Dubai is relatively straightforward. Foreigners can buy properties in designated freehold areas, and the process typically takes a few weeks to complete.
- Do I need to have a residence visa to buy a property in Dubai?
No, you don’t need a residence visa to buy property in Dubai. However, having a residence visa can make the process easier and provide additional benefits.
- Can I get a mortgage to buy a property in Dubai?
Yes, several banks and financial institutions in Dubai offer mortgages to foreigners and expats. The loan-to-value ratio is typically around 75%, and the interest rates are competitive.
Additional Tips for New Residents in Dubai
- Research, Research, Research: Before buying a property, research the market, the area, and the developer to ensure you’re making an informed decision.
- Seek Professional Advice: Consult with a real estate agent or a lawyer to guide you through the buying process.
- Consider Your Budget: Calculate your budget carefully, including the down payment, mortgage, and ongoing expenses like maintenance and property taxes.
By following these tips and considering the benefits of buying a property in Dubai, new residents can make a smart move and enjoy a comfortable and secure life in this beautiful city.
The Bottom Line
The trend of new residents buying properties within 2 years of arrival is a smart move, considering the rising rents and the benefits of owning a property in Dubai. While it may require a significant upfront investment, the long-term benefits of owning a property in Dubai make it an attractive option. If you’re a new resident in Dubai, it’s worth considering buying a property instead of renting. With the right guidance and support, you can find your dream home in this beautiful city.
Increase in Dubai Rents Drives Tenants to Choose 12-Month Cheques or Direct Debits
Dubai’s housing sector is experiencing dramatic shifts as tenants are dealing with ever-increasing rents on yearly leases. A growing number of mid-market residential area residents are now seeking a paradigm shift in the traditional payment arrangement due to rising costs. Tenants have recently turned to monthly direct debits, attempting to find an approach to money management that suits them best. With all these questions arising, will landlords go along with such changes and what problems will they face together?
The Rise of Monthly Direct Debits
This has made tenants ask their landlords to allow them to pay their rentals through monthly direct debits after the recent RERA Rent Index revisions resulted into a higher rise in rents. This process involves withdrawing rent straight from the tenant’s bank account, which provides for more efficient way of fulfilling payment requirements. This move is mostly felt in mid-market residential areas where residents have been hit hardest by adjustments in rental rates.
Monthly Payments: A Solution for Budget Management
To lessen the burden on struggling tenants, rent payments can be deducted monthly thus obviating the need for sufficient funds during cheque submission time. Bounced cheques are becoming more frequent and this has negatively affected relationships between the tenant and landlord as well as credit scores being downgraded sometimes. In UAE bounced cheques do not attract criminal charges, therefore tenants are looking for secure alternatives.
Direct Debit System’s Perspective
The Direct Debit System CEO Ummair Butt says that 96% of the UAE population falls under a group whose salaries are paid on a month-to-month basis hence implying that direct debit should mimic payday cycle accurately. According to Butt allowing deductions every month causes reductions in bounced payments equaling 41%, which makes it possible to maintain life amid rising costs.
Landlords’ Reluctance and Current Adoption
Although some landlords are already offering 12-cheque options or monthly debits, however their numbers remain very limited. Physical cheques issued by tenants are trusted because of old fashioned mentality surrounding landowners. According to Usman Jameel, Sales Manager at Azco Group, millennials who are more comfortable with digital payments have adopted direct debits the most. Real estate experts argue that this change may take a while because landlords are used to having physical checks as method of payment.
Challenges & Factors Affecting Adoption
Landlords face several issues to implement a direct debit system even if it has numerous advantages. These include ‘assignment of receivables’ and the need for a ‘legal alternative’ to cheques. Due to multiple bank loans against various real estate assets, Landlords may find it difficult to divert their income through different banks.
Cost Implications for Landlords
Digital alternatives may be resisted by landlords who always look into costs in their business. Additionally acquiring charges on credit cards payments is 2% while direct debits on credit cards attract a fixed fee of Dh7. Even with processing fees being paid, traditional cheques remain safe instruments for the landlord.
The Bottom Line
Dubai’s real estate market is gaining traction in its adoption of monthly direct debits as tenants seek financial flexibility amidst soaring rents. Nevertheless, while obstacles and conventional thinking persist, the possible gains to be had by both tenants and landlords may set the stage for a gradual change in payment options. It will take a few years before we can see if monthly direct debit becomes one of the widespread features in Dubai’s rental market which is changing over time.
For those seeking rental solutions or landlords considering alternative payment methods and Azco Real Estate Brokers provides tailored services to meet your needs. Contact Azco today to explore how we can help navigate Dubai’s rental market and facilitate smoother transactions, including the adoption of monthly direct debits. Start your journey to financial convenience with Azco Real Estate Brokers.
