What is the role of leasehold and freehold in the UAE real estate market?

What is a leasehold?

Leasehold represents a special form of temporary transfer of property rights that is characterized by long usage periods. Essentially, it resembles a long-term lease, as such agreements are made for decades, and sometimes even for centuries. The term "leasehold" was borrowed from English law and has become relevant over time in Arab countries, where the restructuring of the legal framework has led to its application. In this type of contract, it is possible to enter into an agreement for a term of up to 999 years.

Tenant rights in the Middle East

In the Middle East, especially in the United Arab Emirates, leasehold holders are granted a number of rights. Although these rights do have their limitations, they are still broad enough for most cases. Tenants can:

• To resell your rights to the property before the contract expires,
• Use it as collateral,
• To carry out renovations and reconfigurations,
• To sublet it.

Advantages and opportunities

Leasehold ownership is popular due to the ability to obtain property rights with a limited, yet still significant, degree of control. From the perspective of local authorities, this mechanism helps protect the interests of the country's citizens. For example, citizens of the Emirates can expect:

• More favorable rates for utilities.
• Loans for construction and mortgages with reduced interest rates,
• Various subsidies from the government.

Foreign investors and leasehold

However, foreigners who are not from Arab nations are deprived of the opportunity to acquire real estate in the leasehold format, despite the apparent economic advantages of this option. Special free zones have been created for them, where they can legally acquire real estate with full ownership rights, known asfreehold.

The difference between a leasehold and a long-term rental.

When analyzing the real estate market, it is important to understand that leasehold is not just a long-term rental. It is a unique form of ownership available only to citizens of the Gulf Cooperation Council countries. Therefore, for Russian-speaking buyers, many of whom are foreigners, this format does not seem very appealing.

The future of leasehold

As for the future, it is not yet worth discussing significant changes regarding foreign investors from the authorities of the Emirates. However, there is a clear trend towards expanding opportunities for foreign investors. The current market situation shows that the interest of citizens and expats from the GCC does not cover the entire volume of offerings, while foreign buyers are focused on properties that are available for full ownership. This explains the decline in the popularity of leasehold properties, as well as the increase in the number of free zones where foreigners can make their purchases.

Trends of recent years

Over the past ten years, there has been active development of this trend in the Emirates. For example, in Sharjah, known for its modern skyscrapers and dynamic centers, one can see how these changes are manifested in practice. The increase in the variety of products available to foreign clients confirms the growing interest in full ownership rights, which in turn is shaping new conditions in the market for all its participants.

Trends in UAEreal estate

In recent years, there has been a noticeable trend in the United Arab Emirates shifting from leasehold to freehold in the real estate sector. This process is particularly evident in areas like Silicon Oasis, located in Dubai. Previously, property ownership rights in this area were limited to a leasehold scheme.

However, construction companies have begun to realize that providing real estate in the freehold format will be more beneficial for both local residents and foreign investors. This has become the main motivation for converting properties to freehold ownership. In turn, freehold ownership fosters greater trust among buyers, as they want to have full rights to their property, which allows them to pass it on to their family as an inheritance.

With each new project implemented within the framework of free economic zones, the likelihood that there will be at least one area in Dubai with leasehold conditions is becoming increasingly lower.

What is freehold?

Freehold is a form of ownership in which the owner receives full rights to their property in the UAE. By acquiring freehold, the buyer gains the ability to freely manage their property:

• use it at your discretion;
• to sell;
• to rent out
• to give as a gift;
• to pass on by inheritance.

Victoria Kochergina, a senior sales specialist at H&S Real Estate, emphasizes the key advantages of freehold properties, highlighting that properties priced above1 million dirhams(approx.272 thousand dollarsThey open up the opportunity for foreign buyers to obtain a long-term visa in Dubai. This is an important aspect of freehold ownership, as it provides a chance to become a resident of the Emirates and live in the country on a permanent basis.

The history of freehold in the UAE

In 2002, at the initiative of Sheikh Mohammed bin Rashid Al Maktoum, the possibility of acquiring real estate in full ownership was introduced for citizens from all over the world. From 2006 to 2008, important regulations were adopted that defined the list of free zones in Dubai, Umm Al-Quwain, Ras Al Khaimah, and Ajman. By 2019, the option to acquire freehold ownership also extended to Abu Dhabi.

As a result, zones were created in the country where properties with freehold processes are available for both UAE citizens and foreign nationals, including individuals from Gulf countries.

Real estate offers in the UAE

Currently, the UAE offers a wide range of real estate options for purchase. For example, one might consider the possibility of buying apartments in Dubai for a certain amount.958,044 eurosThis is a spacious apartment with an area of215 m²offered in the MBL Royal project by Mag Properties Development.

Here you can enjoy a luxurious lifestyle, unique events, and a wide range of amenities. MBL Royal is located in the picturesque area of Jumeirah Lakes Towers and offers its owners magnificent interiors and comfortable living conditions.

It is also worth paying attention to the offer in the Burj Khalifa area: apartments at the price of1,446,326 eurosarea240 m²As part of the Sterling project by Omniyat, this new residential complex is just two minutes away from downtown Dubai and the magnificent Dubai Canal, making it an excellent choice for those seeking luxury living in the heart of the metropolis.

Delight in Dubai

Not far from the famous Burj Khalifa, stunning views of Dubai's cityscape unfold. Here, in this unique corner, you can find a vast variety of residential options: from studios and one to four-bedroom apartments to lofts, luxurious penthouses, as well as townhouses and plots of land with greenery. Such a wide range of offerings provides significant flexibility in choosing and planning future housing.

Excellent Apartments from Hermes Real Estate

Excellent apartments in Dubai from the companyHermes Real Estateavailable at a price starting from 559,654 euros. These 45 m² apartments are perfect for comfortable living, offering three rooms and two bathrooms. For more detailed information, I recommend contacting a company representative.Habitawho will gladly provide the necessary clarifications.

Apartments from Habita International Estates Ltd

Also the companyHabita International Estates LtdIt presents magnificent apartments, among which there is a property priced at 321,319 euros and covering an area of 109 m². Owners of such apartments can obtain a residence visa, as well as take advantage of the online viewing service and complete the transaction remotely. Payment can be made in rubles or even using cryptocurrency, making the purchasing process as convenient as possible. These apartments are ideal for rental, providing a stable income.

Azizi Grand Project

Among such attractive projects, a complex stands out.Azizi GrandLocated in the Dubai Sports City area, this development offers fully furnished apartments with convenient kitchens. These apartments represent an excellent investment opportunity, providing a stable rental income of around $1,000 per month. The completion of the construction is expected in the fourth quarter of 2024.

The infrastructure of the complex includes:

• gym
• barbecue areas
• spa
• playgrounds
• an open pool at podium level
• football field
• delightful landscape gardens

Elite apartments in Business Bay

CompanyDDA Real EstateIt offers housing in an elite project located in the very center of Dubai, in the Business Bay area. Here, there are two stylish skyscrapers that provide stunning views of the Dubai Water Canal and the famous Burj Khalifa. Business Bay is considered one of the most attractive and unique areas of the city, drawing clients in with its atmosphere and developed infrastructure.

Apartment from Mayalanya Group

In the project fromMayalanya GroupYou can purchase an apartment for €1,001,657 with an area of 154 m². This property, located in the prestigious Downtown Dubai area, is an excellent investment with a potential resale yield of 15-20%. The 0% installment plan and the completion date set for the fourth quarter of 2026 make this purchase particularly enticing.

The complex offers a wide range of amenities, such as:

• modern gym
• event area
• spa park
• infinity pool

Luxurious apartments Como Residences

It is also important to pay attention to the new luxury apartments inComo ResidencesOn Palm Jumeirah. These elite apartments, covering an area of 1269 m², are priced at €19,179,249 and offer a high rental income starting from $2,000 per month.

Unique features of modern residential projects in the UAE

This article discusses the outstanding features of modern residential real estate in the United Arab Emirates. It focuses on their high-quality characteristics and excellent design solutions.

Spacious apartments in Dubai

For example, in one of the offered apartments, the ceilings reach a height of 4.5 meters, creating an atmosphere of space and freedom. This solution, combined with an abundance of necessary modern amenities, makes living in such properties particularly enticing.

Apartments from Mayalanya Group

One of the options presented is an apartment in Dubai offered by Mayalanya Group. The total area of these apartments is 59 square meters, and the price is366,279 eurosHere you can see a modern interior where style and functionality harmoniously blend together.

Thanks to thoughtful planning, you will have the opportunity to adapt the space to your individual needs, using only high-quality building materials and the latest equipment. Spacious bedrooms with exquisite bathrooms create an atmosphere of relaxation and comfort.

Luxury apartments in Ras Al Khaimah

An interesting alternative is the luxury apartments in Ras Al Khaimah, managed by Tradegoria Global Estate. Their area is147 square meters, and the price —1,010,310 eurosThese apartments are located by the sea, which is perfect for those who appreciate nature and ocean views.

The interiors are designed to create a harmony between elegance and coziness, while the spacious living rooms provide a place for spending time together with family and friends. The magnificent bedrooms are also complemented by luxurious bathrooms, creating the perfect conditions for relaxation.

Cove Edition project by Imtiaz

The Cove Edition by Imtiaz is an outstanding project that offers a unique lifestyle with new standards of luxury. The complex includes:

• Fully furnished apartments with modern design
• Various payment schemes: from50/50to more flexible options
• Special offers, including discounts for full prepayment

Apartments in Matrix Tower

Apartments in Matrix Tower are also interesting, offering luxurious apartments with an area of119 square metersat the price300,934 eurosThis residential complex is located in the prestigious area of Dubai Sports City, near picturesque golf courses and a canal.

Panoramic windows offer stunning views of the surroundings, creating an atmosphere of comfort and tranquility, which makes such properties ideal for living and investing.

Offers from Metropolitan Premium Properties

It is also worth noting the offer from Metropolitan Premium Properties, which includes an apartment with an area of97 square metersThis is an excellent choice for those looking for luxury housing with unique features and the opportunity to enjoy comfort and style.

The overall concept of housing in the UAE

The overall concept of all the listed projects is aimed at creating living spaces that promote not only comfortable living but also a high-quality lifestyle.

The highlight of these properties is the combination of modern technologies, design solutions, and a uniquely advantageous location, which transforms the perception of urban life in the modern world.

Introduction to Mayalanya proposals

The Mayalanya group offers residents of Dubai a wide selection of real estate. Currently, comfortable apartments with an area of 99 square meters are available for purchase. The price of this property is774,329 euros.

Other real estate options

Metropolitan Premium Properties also offers apartments with an area of 113 square meters, the price of which is higher and amounts to619,427 eurosIn addition, buyers are presented with a luxurious villa in Abu Dhabi, covering an area of 579 square meters and featuring five bedrooms. This villa is valued at2,291,902 eurosand is located in the prestigious Saadiyat Lagoons area on Saadiyat Island.

Comfortable living in Abu Dhabi

Undoubtedly, this offer will be an excellent option for a comfortable and well-deserved life. Specialists from Tradegoria encourage you not to miss the opportunity to visit this property in person and appreciate all its advantages. The villa impresses with its high-quality finishes and is in impeccable condition.

Misconceptions about land rights

It is worth noting that there is a common misconception regarding land rights when acquiring property in a free zone. Many believe that it is impossible to obtain land ownership in such areas. However, according to expert opinions, this statement is incorrect.

Legal aspects

The concept of "freehold" implies obtaining full and unquestionable ownership rights over both the real estate properties themselves and the land on which they are located. Thus, both villas and townhouses or apartments in high-rise buildings grant owners complete rights to the land beneath them. It is important to note that the laws regarding land and property rights can vary depending on the emirates, such as Dubai and Abu Dhabi.

Basic legal norms

• Article 8 of the Dubai Real Estate Regulation Law of 2010.
• Article 61 of Abu Dhabi Law No. 3 of 2015.

The high cost of freehold properties

It should be noted that potential freehold property owners often consider the high cost of such real estate. The myth that these apartments or houses are significantly more expensive than similar properties under leasehold terms is partly explained by their location, as they are usually situated in the most desirable areas and along the coast.

Real estate prices in popular areas

• The price per square meter in the area near the "Burj Khalifa" can reach9-10 thousand dollars.

Expert opinion

Senior H&S Real Estate specialist Victoria Kochergina claims that inflated prices of freehold properties are just a myth. According to her estimates, this opinion is based on the fact that today most properties in Dubai are indeed located in freehold zones, and their prices are quite in line with market conditions.

Development of freehold zones in other emirates

It is also worth noting that in other emirates, such as Fujairah and Ras Al Khaimah, new projects for foreigners are gradually being developed, which contributes to the expansion of freehold zones.

Concerns of foreign buyers

It should also be mentioned that foreignreal estate buyers in the United Arab Emirates occasionally express concerns about the safety of their investments. For example, if a property is used as a summer home, it may remain vacant for several months. Despite having insurance, owners may still worry about the security of their properties.

This desire to protect one's own property is completely justified and truly deserves attention.

Safety in the United Arab Emirates

Victoria Kochergina, a senior sales specialist at H&S Real Estate, shares her thoughts on safety in the United Arab Emirates. According to the expert, this country is renowned for its high level of protection of citizens' rights and the order in which no one can enter private property without proper permission.

Common discussions about neighbors being able to freely enter apartments for repair work without the owners' consent are nothing more than a misconception. Such actions can be considered unlawful. The only exception is situations where law enforcement has a relevant search warrant, which is also typical in many other countries.

Prospects for growth in the real estate market

Speaking about growth prospects in the real estate market in highly sought-after tourist centers like Dubai, Abu Dhabi, and Sharjah, it should be noted that the number of free zones will be increasing in the coming years. Statistics from developers indicate that they are actively working on various projects for foreign investors.

One of the key factors, according to foreign buyers, is the ability to inherit real estate acquired in the form offreehold.

Freehold and its advantages

According to information from Victoria Kochergina, currently 95% of Dubai's territory is allocated for freehold, and the trend is such that even the strict emirate of Sharjah is gradually beginning to ease its restrictions and open new areas for construction in the freehold format. Local authorities are well aware of the importance of attracting foreign capital to the country's economy.

Investment interest in Abu Dhabi

Abu Dhabi, home to the famous Sheikh Zayed Mosque, also attracts interest from potential investors. Terms such as play an important role here.musatakhandusufructthat define various forms of property rights transfer.

Musatakh

According to the UAE Civil Code, Musataha provides the opportunity for the development and use of a land plot on a temporary basis, with a maximum term of 50 years. All structures built on this plot belong to the developer. This contract can be extended, allowing the owner to manage the property at their discretion.

Usufruct

As for usufruct, it falls under the category of leasehold, but with certain caveats. Unlike leasehold, usufruct restricts the ability to alter the property, including renovations, major repairs, and any other reconstructions. The maximum term for using land or property under usufruct cannot exceed 99 years.

Conclusion

Thus, both terms are examples of limited rights to property and its use. In this context, freehold offers the owner the most favorable conditions, which becomes attractive to many foreign investors and contributes to the final formation of an optimal business environment in the UAE.

Conclusion

In concluding the discussion about leasehold and freehold, I would like to emphasize the importance of understanding the different forms of property ownership in the United Arab Emirates, as this knowledge is crucial for potential buyers and investors. Leasehold, as I have already mentioned, provides certain...advantagesFor citizens of Gulf countries, however, it is not always the right choice for foreign buyers who wish to have full control over their property, including the ability to pass it on as an inheritance.

Change in the market situation

The situation in the real estate market is changing. Over the past ten years, we have been observing a growing...interestTowards freehold, which leads to a gradual reduction of leasehold in favor of more flexible and advantageous conditions for investors. This is a natural movement towards economic optimization and an increase in internal trust among viewers. As can be seen, developers understand that priority is given to fully owned properties, allowing them to successfully adapt to market needs.

Prospects for foreign investors

I believe that in the future, the number of leaseholds in Dubai and other emirates may significantly decrease, as new projects are being developed with a focus on community.availabilityand ease in transactions.

Freehold opens new horizons for foreign investors - not only in terms of economic benefits but also in terms of the opportunity to obtain.residencyThis is a kind of ticket to a country with a high level of development and a variety of opportunities, which more and more buyers wish to take advantage of. Thanks to changes in legislation, the real estate market in the UAE is becoming increasingly accessible and attractive to foreign investors, and I am confident that this trend will only strengthen.

Key points for buyers

• Comparison of forms of ownership:Leasehold vs Freehold.
• Market changes:Increasing interest in freehold.
• Prospects for foreign investors:Possibilities of obtaining residency.
• Availability of real estate:New projects with fully owned properties.

Thus, the main focus should be on finding optimal conditions for acquiring real estate — from understanding the differences between leasehold and freehold to assessing the attractiveness of new projects on the market. The interest of foreign buyers in free zones will continue to grow, and the future of the market undoubtedly opens up new prospects for both investors and the Emirates themselves.