The property sector in Dubai is a very dynamic one. In particular, since 2022, the property market in this emirate has been experiencing strong growth, with record figures for the number of transactions in certain months.
So, if you’re planning to invest in a property with friends, colleagues, family members, etc., you should get started now to maximise your chances of capital gains or rental returns.
To help you, we’ve put together the key things you need to know about investing in property in Dubai as part of a group.
Is it possible to buy a property in Dubai as joint owners?
As you might expect, the answer is yes. In fact, contrary to what one might think, many properties built in Dubai are jointly owned by several owners. So it is indeed possible.
Under Dubai’s legislation on co-ownership of property, it is possible for two, three or four people to legally own a single property.
If there are more than four owners, the law requires the creation of a trust. The owners, whose number may then be unlimited, may subsequently be named as beneficiaries of the trust. They therefore own the property through the trust.
Naturally, each investor’s share of the property must be clearly stated on the title deed issued by the Land Department upon completion of the transfer of ownership.
Generally speaking, the percentage of ownership indicates the personal financial contribution made by each investor. Revenue is therefore shared amongst the investors on the basis of this percentage.
For example, in the case of married couples who purchase a property jointly, the ownership percentage is often 50% for each party.
Why invest in property in Dubai as a group?
The exorbitant cost of property in Dubai is a major obstacle to home ownership in this city of colossal development projects.
Over time, these prices have continued to rise, making it increasingly difficult for more people to invest in property in this emirate.
To cope with this rise in property prices in the emirate, it is not uncommon to see married couples, parents and their children, siblings, friends and so on pooling their resources to purchase property jointly.
Authorised and regulated by the law on joint ownership currently in force in Dubai, joint ownership has become a more viable option for becoming a landlord in Dubai.
The main advantage of this option is that the more owners a property has, the easier it is for them to secure loans from banks, particularly during economic downturns when banks tighten their lending criteria.
In a co-ownership arrangement, the title deed will therefore be in the names of all the co-owners. Consequently, all co-owners must give their consent if one of the investors decides to sell or let their share to a third party. Ideally, it is advisable to draw up an agreement clearly setting out the terms of the co-ownership.
What do you need to know about investing in a property in Dubai as a group?
If you are considering buying a residential or investment property in Dubai to capitalise on the ongoing rise in property prices in the market, you should contact the Dubai Land Department.
The main document you need to provide is still a copy of your passport, not your residence permit.
You will need to open a bank account in Dubai in order to transfer the funds required for the transaction. Opening an account is very straightforward and usually takes just an hour.
All you need to do is provide the original and certified copies of your last six bank statements.
If you need to secure a mortgage to complete the purchase, even as an expatriate or foreign investor.
If you meet all the criteria regarding income stability and minimum monthly salary, you can receive an in-principle approval within 4 days.
Please note, however, that if you are an expatriate, you will only be granted a mortgage on condition that you pay a deposit of between 20% and 35%, depending on the value of the property.
It is therefore not possible for the mortgage to be the sole source of funding for your property investment in Dubai. However, the mortgage may cover up to 80% of the property’s value.
Furthermore, as is the case in France, the transaction is finalised at the notary’s office. Your estate agent will help you arrange an appointment with the Department of Land.
To ensure the process runs smoothly, please make sure that your estate agent is registered with the Real Estate Regulatory Agency.
The agent will advise you on your property development and will help you find a villa, a flat, a duplex, a loft, a penthouse, an aparthotel, etc., depending on your plans. There is a very wide range of residential and rental properties to choose from.
Your estate agent will also help you with negotiations with the seller, verify the authenticity of their title deed and draw up the preliminary sale agreement.
As soon as all the documents required for the transaction are ready, he will take you and the seller to the Dubai Land Department, the government body responsible for property transactions in Dubai, to finalise the transaction. In total, the transaction will take between 4 and 15 days, depending on the circumstances.
