Aero

Question as above , assuming an expat is NOT here for the short term.

Has anyone gone the purchase route and if so , would it make financial sense ?

I gather expatriates from non-GCC countries can purchase properties on a 99 year lease in designated "Investment Areas" that include Al Reem, Saadiyat Island and Al Raha beach with a down-payment of 10% plus service charges securing purchase; registration fees of 2% on the sale price of the property, and 1% on leased property are to be paid. I understand that owning a property in Abu Dhabi does not entitle expatriates to a permanent residence status.

It seems to me that this is not really purchasing at all , but long term leasing. And even then you are at the mercy of service charges and , if you had financing , interest rates ; and is there any choice over who to take financing with ?

I'm starting to wonder if the overarching reality of life as an expat is that the longer you stay (typically on non-incremental salary with capped allowances) the more your capacity to save diminishes.

busybee2

i hve been here a little while but would still not buy, lots of "ifs" build quality, legal issues, delivering what is paid for, visas, service charges, etc etc as you put above.

Aero

Hmm, what to do to circumvent the greed of landlords, not a lot it seems. So-called "buying" seems to be another loaded issue. The cost of "buying" would be inconsequential for the super-rich with money to burn , but not your average expat.

The average expat is left open to exploitation.

Jimmy B

I have a friend who bought a property in Al Reef and he is more than happy because he is not exposed to any of the rent increases that the rest of us are suffering. My worry however would be jobs are not that secure here especially if like me you work for the government as there is an emiratisation drive at the moment and so you could be left with a mortgage and no job!

busybee2

yep lot of people still being let off, know of someone who was an adviser for gov and was told over xmas to go.... so yes it depends as you may be stuck with a place that you cannot afford.

mikewot

Both of the above and Sharia law in the event of my death here because my wife lives in UK, what will happen to the property.
However my biggest concern would be build quality as these places are not going to be 'improving with age' like some European properties. Sooner rather than later they will show signs of aging and without major overhaul will depreciate quickly.

Aero

One would hope such as the "Gleam of Reem" skyscrapers would be well built , there were some spontaneously cracking tempered glass windows reported of late , kind of scary.

Yes and no doubt any overhaul charges would be passed on in "service fees".

NewCaledonia

Construction quality in residential properties in the UAE/GCC is for the most part pure crap, with some notorious exceptions (i.e. Burj Khalifa). And extreme weather (humidity + heat) does not help either.

I wonder how Dubai Marina will look in 20 or 30 years from now. Much closer to those council estate towers from the 60s or 70s in the UK than to Manhattan.

DubInRiyadh

The problem as I see it in the Gulf region is the lack of proper planning strategy. Compared to say London which has a finite amount of land for development, here they just develop further out into the sand or even reclaim land from the sea. When you can always find more space to build on there is no real reason for capital appreciation on the existing properties. Poor build quality and lack of proper maintenance in this harsh environment also points to owners coughing up money in the future rather than enjoying the properties appreciating in value.

Aero

Interesting point. I wonder also what the red tape is in so far as selling such a property. Can such "bought-but-really-only-long-term-leased" properties be sold on ? Or is the reality that you are to all intents and purposes stuck with it. And even if you can , does the risk of negative equity make it cost prohibitive.

The properties that are indeed 99 year leases which I assume is all of them , ultimately the lease end will be long after the owner dies and maybe so only half way through their lease but still I imagine due to their inherent time-limited utility obviously set to decline , this becomes something of a toxic asset.