What to Consider Before Buying a Home in a New City

A new chapter begins whenever we move to a new city, there is an opportunity for deeper exploration and building life from scratch. Whether you want to relocate for work, for an investment opportunity, or simply to travel to a sunnier place, buying a home in a new city is always a big decision. It is not just about planning or financial investment, but the lifestyle and value it holds for the future. 

In this article, we will explore what the key factors are that are necessary to consider before buying a home in a new city and especially when this new city is Dubai 

Factors To Consider Before Buying A Property

If you are thinking of Dubai properties for sale, there is a lot to be considered before entering the world of property hunting.

Know Your Financial Boundaries First

Understanding your budget might seem easy, but it’s one of the most crucial steps you can take while determining Dubai property for sale. Start with the most basic, yet often overlooked, aspect of property searching: the budget. Therefore, you need to figure out what you can spend first, before getting excited about stunning villas or apartments.

You should first consider the following questions:

• Am I financially capable of making a deposit payment? 

• Do I plan on securing a loan? 

• What is the maximum amount of monthly instalments that is feasible for me to pay?

In Dubai, the stunning studios located in International City are available for potential buyers at AED 260,000-270,000. Furthermore, you can expect to pay an average of AED 300,000-350,000 for basic properties. When converted to USD, that is approximated to $100,000, which is a very surprising and economical figure for a world-renowned city.

Don’t Forget the Upfront Fees

When acquiring a property, it is necessary to take into account a long list of fees beyond the mere sticker price.

• Dubai Land Department (DLD) Fee: 4% of the property price + AED 580 admin cost.

Registration Fee:

• AED 2,000 + 5% VAT (for properties below AED 500,000).
  AED 4,000 + 5% VAT (for properties above AED 500,000).

• Real Estate Agent Fee: 2% of the selling price + 5% VAT.

• Mortgage Arrangement Fee: 1% of the loan’s value + 5% VAT.

• Mortgage Registration: 0.25% of the loan’s value + AED 290.

• Valuation Fee: AED 2,500 to 3,500 +5% VAT.

These costs, except for the deposit, which needs to be in cash, can be paid through a personal loan.

Understand the Mortgage Policies

As an expat, you will need at least a 25% deposit for homes below AED 5 million. In the case of UAE nationals, they must pay 20%. The bank also requires the borrower to be free of any rental liabilities. This essentially means having sufficient income, a stable full-time job, and a good credit score.

Always start with a pre-approval. This will assist you in determining the amount you are eligible for and also narrow the search parameters. 

Consider Ongoing Maintenance Costs

Every property has ongoing maintenance expenses, and in Dubai, these are determined by the RERA Service Capital Charge and Maintenance Index, which calculates the charge per square foot.

Make sure to ask the agent for the annual maintenance cost before you buy. These are charges associated with the Dubai Land Department and can significantly impact your long-term financial sustainability. The maintenance cost varies depending on the community — a luxury tower in Downtown Dubai will have different fees than a modest unit in Discovery Gardens.

Research the Neighbourhood

Always remember that when buying property in Dubai, the location is more than a mere dot on a map. It influences your commute, lifestyle, and even the potential for value appreciation alongside rental revenue.

Here are a few family-related questions to consider:

• Is the location appropriate for families?

• Do shopping areas such as supermarkets, schools, and parks exist in proximity?

• How much noise is typical around the area?

• Is the property next to public transport or major roads?

• What kind of trend does the area undergo in terms of popularity, growing or declining?

Check the Developer’s Reputation

In a city as dynamic as Dubai, some projects face delays or are not delivered as expected. Always look up the developer’s track record, check testimonials, and, if possible, stop by one of their finished projects.

Inquire:

• Is the project on time?

• Are additional unmarked fees present?

• How is the overall build quality?

Additionally, it is important to check if the property is ready to live in or off plan (still under construction). Both options come with distinct advantages and disadvantages. Off-plan properties will likely be cheaper, however, you will face a greater risk of waiting longer to access the property.

Think Long-Term: Rental Yields & Investment Potential

Consider your exit strategy even if you plan to live in the unit. Dubai as a city has high rental yields as compared to other cities in the UAE, particularly in mid-market communities. A reasonably priced unit that is located well can give 6 to 8 per cent rental returns each year, based on prevailing market conditions.

• Am I able to rent this out in the future?

• Will the rent be sufficient to cover my mortgage, along with maintenance costs?

• Will the area have growing value over time?

If the answer is yes, then you’re not just buying a home but making a smart investment.

Legal Review and Closing Processes

Before you commit to anything, have a legal professional or a reliable broker review your documents and check:

• Verification of property ownership

• Absence of any legal disputes or outstanding claims

• Comprehension of all clauses of the Sales and Purchase Agreement (SPA)

Final Thoughts

Purchasing a property in a different city is an adventure — exhilarating, stressful, and fulfilling all at once. Dubai offers its residents sunshine, unparalleled infrastructure, and a rich blend of cultures. However, the right decision cannot be made without thorough research, planning, and a clear mind.

No matter if you are a new buyer or an experienced buyer, it is important to remember that, contrary to popular belief, the best homes do not have to be the most costly ones. It is rather the most suitable ones aligned with your objectives.

Looking to invest in Dubai real estate? Knowing your metrics and understanding the regions is imperative. Purchase a property that extends beyond being shelter, a place that redefines your lifestyle and perspective towards life.