It has taken us months. Months of worry and months sitting in the front of the computer looking at numbers, but we have finally done it. We are back on the property ladder . . . !
When we arrived, we became acutely aware of rising prices in Dubai. Not only on the rental market, but also in the buying of properties too. Houses that we looked at six months before had shot up nearly £100,000, leaving us well and truly behind. Doing a search on real estate agencies web-sites were relatively useless, as by the time we called them about a property, it had already been sold.
We hit the phone - maybe this would be easier. Not really. We were met with "what's your budget?" we replied. "Mmm", they said, "I don't think we can help you". Crazy stuff, when an agent tells you that you are unable to buy anything with your budget - and we thought our budget was quite good . . . . but not by Dubai standards.
We soldiered on, and we happened to stumble upon a new development just around the corner from us in Dubai Sports City. There we found a town-house for within our budget (just). Out here, there is an incredible shortage of villas, driving the price up even more. Dubai is expanding both in terms of residents and building. You will all know that it is probably the building capital of the world.
Therefore, the majority of houses are sold off-plan. Basically, the developer has found the plot of land, put together a master plan and then sells the houses. They are usually sold out within days of release. This particular house has been bought and sold twice - we are the third owners (the previous two owners have each sold at an amazing profit), and I don't believe many bricks have even been laid. The original price of our house 2 years ago when the plans were released was under £100,000.
The buying system out here is terrible. In order to secure a house (built or un-built) you have to immediately part with 10% deposit. You are then given a Memorandum of Understanding (MOU) which enables you to approach a bank for a mortgage. Each house is mortgaged by a particular bank . . . . in the UK you find your house and then can apply to any bank for a mortgage on that property. Here, you are told which bank to go to. We were told where to go (bank-wise) and duly put in the application forms. It was approved and we signed all of the mortgage paperwork. We just had to take a photograph of all of the paperwork as I don't think I've ever seen so much paperwork for one transaction. In the land of no direct-debts, Tim has had to write out cheques for three years worth of mortgage payments, as well as a six-month payment cheque, a twelve month payment cheque and also a cheque for the full amount. Another 3 cheques for 3 years insurance payments and a forward payment cheque - which is the amount we are paying to the bank until the house is built.
In the UK you are not allowed to complete on a property which is not built and ready. Something unusual over here is that you have to pay for the house to be built. We have paid about 90% for the house right now and will pay the final 10% when it is built and handed over to us, which should be sometime within the next six months . . . or not.
We were then given a date by the real-estate agent for completion (2 months away).
The two months came, with us getting more and more twitchy by the day. We were getting worried because we could see prices spiralling upwards around us and a deal is not done until all of the paperwork is signed. We were eventually given a time to all pitch up at the developer's office. Off we went, and a rather old-fashioned transaction took place. Sat around the table was the seller, the buyers (us), the realtor, the representative from the bank and the representative from the builder. We all signed our documents in turn and that constituted "completion".
The real-estate agent then turned around to us and said that - if we wanted to - she could sell the house for us again at a higher price. In three months (from start to finish) our house has increased by nearly £45,000 in value . . . . . we declined! The house should theoretically increase in value a lot when it is ready for occupation. We will decide what to do then.
Here is a builder's picture of our house when it is built. It isn't big, in fact it is quite small by Dubai standards (2,250 sq ft), but the most important thing is that it's ours!