It’s now a lot easier for newcomers to the city to get a permanent foothold on the property ladder.
Due to a fall in apartment sales, the government has introduced a regulation allowing foreign residents to own property on a freehold basis, in designated investment zones. Before this, foreign investors in the UAE capital were generally limited to leasehold arrangements with 99-year leases.
If you are thinking of purchasing a property, your first port of call should be to contact a reputable real estate company, draw up a budget to stick to and seek out financial advice.
It is then vital to find out which areas are designed specifically for expatriate freehold and leasehold sales. Once you’ve found an eligible area and a suitable property, the process is relatively simple. The buyer reserves a unit and pays an initial deposit, generally ten percent, and the remaining balance is paid in stages until the completion date. Expect land registration fees of two percent also.
While a lawyer is not legally required when buying property in Abu Dhabi or throughout the UAE, we would highly recommended that you get independent legal advice to review any contract before you put pen to paper.
After a turbulent spell in the Abu Dhabi property market, rent prices have started to flatten out. One industry expert says a nervous tension was felt throughout the market due to a wave of redundancies at key firms last year. Alan Kaye, head of sales and leasing at www.districtuae.com, believes the rise and fall of rent charges is now giving way to stability.
Kaye says: “Up until September 2015, the property market was strong. There was a shortage of supply in many key areas of Abu Dhabi and rents were increasing at the time.
“Last October, a number of key companies started to announce redundancies and this had a marked effect on the market.
“Many people did not have contracts renewed and a general nervousness was, and still is, felt.”
But things started changing in 2016. “In the early part of 2016 there were only a few new people arriving and many leaving,” adds Kaye.
“It was in early spring that landlords started to offer incentives such as rent-free periods.”
Kaye says there has been a spike in demand in recent months and feels the market has now plateaued.
Room for negotiation
With the unpredictable property market currently in a state of calm, it is tough to judge who has the upper-hand between the tenant and the landlord.
Kaye insists would-be-tenants shouldn’t be put off trying to win a better deal – and not just on price.
“You should always negotiate the price, although take advice from a reputable real estate company as to what the realistic cost is of a property,” he says.
“There is no clear answer as to which party, landlord or tenant, is in a stronger position at the moment. It is dependent on many factors and will vary from property to property.”
Even if you aren’t able to lower the price of your desired rental property, it’s still worth bargaining on the benefits.
“Rental costs, while not generally increasing, have held reasonably firm, with many landlords giving incentives such as rent-free periods or allowing three or four payments rather than reducing the actual rent paid,” says Kaye.
“This is a trend that we see continuing for the foreseeable future.”
Stick or twist
Market experts believe current rental deal prices are as good as they are going to get for a while.
Kaye says: “We expect rental prices to generally plateau over the next few months, with possibly a slight downwards drift.
“There are a number of properties due to be released over the next year or so, but in many cases, landlords will hold back and keep the rent artificially high. So if you are planning to move, there is little point in waiting.”
Uncertainty in the job market is leading many people to downsize from three-bedroom apartments, but conversely there is a shortage of decent one-bedroom apartments, with the lack of choice leading to a spike in the price of some of those still up for grabs.
Newcomers looking to rent in the city might be shocked to find that the majority of Abu Dhabi landlords will not let you pay your rent on a monthly basis.
Many will ask you to meet your annual costs in just two cheques – or even stump up the whole lot at once – which can be a tough task for those who have only recently arrived in the country with limited disposable income.
Paying in three or four cheques is possible, but be warned that many landlords will increase the overall rent depending on the number of cheques you use to pay.
Understandably, you will get the best deal for paying up in a single installment.