The A to Z of buying property in Abu Dhabi (page 1 of 3)

These have certainly helped but the process of buying a property remains complicated, especially to those uninitiated in the bureaucratic practices of the UAE.

There are many variations in the procedure as, in the absence of a central authority, each developer and agent practices their own system.

This looks set to improve in the future as land registration bodies are set up and implementation guidelines introduced, however in the meantime, this guide should help you to navigate the system as simply as possible.

The Rules

Only UAE nationals have the right to buy freehold property anywhere in Abu Dhabi. GCC nationals, by turn, have the right to buy freehold property but only in the designated 'investment zones' of Al Reem Island, Al Raha Beach and Al Reef Villas.

Foreign nationals can only purchase leasehold contracts within the investment zones; they are not allowed to own freehold properties under current laws.

You do not have to be resident in the UAE to purchase property as a foreign national, but Andrew Covill, head of sales for LLJ Property cautions that, 'you may be more limited in your local mortgage options if you are living overseas.'

Contrary to the claims of some developers, no property purchase can guarantee buyers a visa. This remains at the discretion of the UAE authorities. The most a developer can promise is assistance in applying for a visa based on the property purchase.

One of the more confusing laws that currently exists concerns 'surface rights' that foreign nationals can acquire. These rights give the purchaser entitlements to the 'air space' but not the underlying land.

One expert notices that some developers are advertising freehold rights but this can only mean the freehold rights to the property, not to the land itself.

Dubai has recently introduced a Real Estate Regulatory Agency (RERA) and escrow law to officially licence and regulate the industry for investors.

Although no such legislation exists in Abu Dhabi at the moment, the transparency and security the legislation brings to the sector is likely to see the emirate follow suit in the future.

'You don't have the same legal framework for protection as in a developed market yet, but a framework is coming in,' adds Chris Dommett of mortgage broker, John Charcol Dubai.

Where to start

Tempting though it may be to browse the housing market for your dream home before arranging the financial backing, professionals advise the opposite.

'As prices are increasing relatively quickly it is important to know how much you can afford or are prepared to invest in the property. This can be affected by the product's payment terms, but before you begin your search, calculate the absolute maximum that you are comfortable with,' advises Covill.

'Hidden' charges can include: Lenders fees, developers fees, real estate broker fees which can add up to 5% to the purchase price. Allow yourself some flex in your budget to accommodate these charges.

'Mortgage approval is unpredictable and can take a long time,' says Dommett, contrasting starkly to the often swift property purchase procedure.

Hasty buyers who fail to arrange a mortgage approval in advance may find themselves paying a deposit for a property then racing the clock to get the necessary funds before the completion date on the contract expires: failure to meet the deadline can result in the loss of both the deposit and the property itself.