Watch Out for Misleading Information: Tips for Property Investors in Dubai
- Mohamed Hassan
- Jun 30
- 3 min read
Updated: Jul 1
Introduction:
Tips for Property Investors in Dubai
The property market in Dubai is very active, but sometimes there's incorrect or misleading information shared by some property agents. Because of this, the Dubai Land Department has created rules for agents and fines those who break them. This blog post aims to point out the common mistakes and false information that investors in Dubai might encounter.
Key Points to Avoid Misleading Information in the Dubai Property Market:
The Illusion of the Launch Price: Some people say the "launch price" is the cheapest you'll find, but often, the launch price for properties still being built can be more expensive than properties that are already finished.
Exaggerated Rental Income Promises: Promises of high rental income (like 10%) for properties being built might not be realistic. The current income for finished properties is between 7% and 10% in certain areas, and it's unlikely to get that much for properties that haven't been handed over yet.
Unrealistic Expectations of Price Increases: Claims that a property's value will increase a lot (like 45% in three years) can be misleading. The Dubai market is growing, but it will eventually level off.
Inaccurate Information About Metro Projects: Always check reliable sources for information about the Dubai Metro expansion plans. The next opening of 14 stations is planned for 2029, and any other information about the metro reaching certain areas before that might be wrong.
Mixing Up Business Bay and Downtown Dubai: You need to know the difference between these two areas. Downtown Dubai (around Burj Khalifa) has higher prices because there's less land available. You can't compare its prices to those in Business Bay.
The Myth of Quick Resales and Huge Profits: Developers often don't allow you to sell a property until you've paid a certain amount (like 40%). Even after that, there's no guarantee you'll find a buyer quickly or make big profits.
Incorrect Comparison Between Apartments and Townhouses: When comparing apartment and townhouse prices, remember that townhouses might offer more space and are in high demand in Dubai.
Precautions for Buyers from Outside the UAE:
Confirm the Developer's Identity: Get official confirmation via email to transfer money to an account under the project's name.
Deal with Registered Agents: Ask for their Real Estate Regulatory Agency (RERA) card and check their details using the QR code on the Dubai Land Department website. It's also a good idea to have an online video call to confirm their identity.
Important Details About Investment Costs:
Registration Fees: You need to include registration fees (4%) in your initial investment costs.
Receiving the Registration Contract: Make sure you receive the initial registration contract from the Dubai Land Department within 60 to 90 days of signing the agreement with the developer. If you don't receive it, contact the developer and threaten to file a complaint to ensure you get it.
Registration Fees When Selling: The registration fees (4%) are paid by the new buyer when you resell the property. You don't get your initial 4% back.
Be Careful of Unregistered Agents and Companies: Deal with licensed agents and property companies to avoid problems and fraud. Many unregistered agents and new, unregulated companies can spread misleading information.
Don't Think About Opening a Real Estate Office Without Experience: Being successful in real estate development requires experience in the field and strong management, not just having money.
Conclusion:
Investing in the Dubai property market is a great opportunity, but you need to be careful and check the information you receive. Investors should rely on trustworthy sources and verify the details of agents and developers to avoid falling for misleading information and ensure a safe and successful investment
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