Complex Emirates. Experts spoke about the problems of buying apartments in the UAE | Prices and market | Real estate

Complex Emirates.  Experts spoke about the problems of buying apartments in the UAE |  Prices and market |  Real estate


The UAE attracts Russians not only with its beautiful beaches, but also with the opportunity to purchase real estate there. However, there are a lot of nuances in this market that few people know about. What are these problems and is it worth investing in Dubai – in the material aif.ru.

There is demand

In recent years, the UAE has become in great demand among Russians in terms of purchasing real estate, which can even be taken out as a mortgage, says real estate expert, mortgage broker Dmitry Rakuta. “From the point of view of transparency and security, the real estate market of this Middle Eastern country is very similar to the Russian one, and the risks are reduced to zero. This is a growing market with a certain profitability. The Emirates also invest a lot in infrastructure development, and they have grandiose plans for future projects. Quite a large Russian-speaking population lives in the country, which also stimulates demand,” explains the expert.

The market is overheated

“When a shoeshine boy starts getting interested in a stock, you should immediately get out of the market,” is a phrase attributed by various sources to JP Morgan, John Rockefeller and Joseph Kennedy, best characterizes the current state of affairs in the Dubai real estate market, says private investor, personal finance expert Mikhail Spektor. “Yes, indeed, Dubai has spent a lot of effort creating an attractive investment climate. They don’t stop doing this even now. However, when it comes to real estate, especially in the last three years, this quote describes the situation. The market is very overheated,” explains the expert.

They don’t talk about it

The main point that is not talked about is the costs of the transaction, warns founder of the management company Smarent Viktor Zubik. “On average, now about 2-3% of the purchase amount is spent on translation alone, then 4% tax, and another 1-2% may be expenses for the transaction, flight and other issues. That is, the buyer of an apartment immediately overpays about 7-8%. Then things get even more interesting, since apartments on the primary market are always more expensive than on the secondary market. That is, if the real estate market is not growing, then in order to sell an apartment, you need to sell it cheaper than you bought it. And then additional costs immediately arise: for a broker who will sell it, and this is at least 2%, and in order to return the money to Russia, you may need 2-3%, that is, another 5% on top,” says the expert.

Many Russians who buy real estate, in addition to not analyzing the real costs of the purchase and transaction, also choose the apartment incorrectly. Considering that this is a different country, it is necessary to understand the market, says Viktor Zubik. “Also, the difficulty of opening bank accounts in Dubai is a typical problem, and now it’s even more difficult. It is difficult to officially declare income from the resale of real estate or from rental,” says Zubik.

Also, when buying an apartment in installments, no one talks about the risks of losing real estate. If the next payment is not paid within three months, the developer will cancel the contract and the buyer will simply lose all the money paid, says Zubik. “Everyone’s profitability in Dubai is good on paper, but rarely does anyone talk about problems and losses. And there are already many situations with those who want to exit investments at a loss and get their money back,” the expert sums up.

Spector revealed what to do with real estate after acquiring it and what determines its attractiveness: “If the expectation is to sell it for more, then this will no longer work. People who bought real estate a year and a half ago today cannot give it back even for the money they bought it for. And if we are talking about leasing, then you need to have a very good understanding of the attractiveness of locations and the local rental market, which is not possible to do remotely. The Dubai train has long left. It’s stupid to try to jump into the last car that doesn’t have a platform.”

We should not forget about the limited stay of Russians in the country for 90 days, adds Dmitry Rakuta. “If the stay is longer than this period, then it is necessary to obtain a residence permit. And its registration implies an investment in real estate in the amount of 200 thousand dollars,” the expert clarifies.

There are also advantages

According to Viktor Zubik, the main advantage is buying real estate in foreign currency, in this case in dirhams, since the exchange rate to the dollar has been stable for decades. “And now there is a high rental yield – about 8-10% per annum,” Zubik clarifies.

Russians are increasingly becoming interested in real estate in Thailand. Now this country attracts not only tourists from Russia, but also those who are ready to invest their savings there. Previously, aif.ru wrote about the main reasons for the growth in demand.

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This news article has been translated from the original language to English by WorldsNewsNow.com.

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