Posted on: 08-12-2015 in Mortgage & Property
For many expats, the common sense is to rent rather than buy when living in a foreign country, where you might not stay indefinitely. Nevertheless, in Dubai, many expats find the renting market quite difficult, restrictive and still a bit risky (with the 12 months of rent paid upfront) while buying a home is not that much harder. Foreigners are allowed and welcome to own property in Dubai however can only buy property in certain areas.
The amount is, of course, greater when buying, but given the attractiveness of Dubai’s property market, buying can not only provide a more pleasant place to live but also be a smart investment for those who can afford it (and at least you will have something to show for your hard work in Dubai, rather than waste your tax-free income on rent).
Property prices took a hit in the financial crisis, but in the recent years the market has recovered and both prices and rents have been rising again, by double-digit percentages per year in many locations (the upcoming Expo 2020 is often being mentioned as a reason, but that is only a small part of the story).
Having decided to buy, the greatest challenge for most people is the mortgage. There are several reasons why being an expat might put you into a more difficult position when trying to get a good mortgage deal:
Most UK, Dubai and global banks have expat sections and some even actively market expat mortgages, therefore they will understand your needs and be able to help. That said, there is still a high probability that you will be offered a less than favourable rate, or be outright rejected. Expats can often get much better deals from lenders who are either less known than the high street banks or who don’t openly advertise expat mortgages but are willing to make a quote once you approach them. It is best to contact a specialized expat mortgage broker or advisor, who will be able to provide you with access to a high number of these lenders and save you a lot of time.
Note that if you have an existing property in the UK, you might be able to remortgage and release some equity, in order to help finance your new home or living expenses in the first months in Dubai. This is easiest to do while you are still living in the UK and able to prove a UK income. If you have already left your British job and moved overseas, getting a UK mortgage may be more difficult or you may not have access to the best deals. In such a situation it is again best to speak with an expat mortgage specialist.