Buying real estate in Dubai

property in Dubai
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Updated 2021-11-10 13:56

Dubai is like a drug; from the minute you step into the city as a tourist, that's where the love affair starts. Within a short period of time, Dubai has risen from the dusty banks of old saltwater to a luxury infrastructure with many amenities in it.  

Dubai's economy has been growing at a good pace. While other countries in the Middle East had oil crises, Dubai cut its dependency on oil revenue and became a champion of planning and economic growth in the MENA region. Economic growth is thus making Dubai one of the best places in the world for real estate investment.

Benefits of investing in property in Dubai

One of the benefits of buying property in Dubai is constant demographic growth. The city's population is increasing day by day with people from all over the world coming in search of better career and business opportunities. All of them need a place to stay and settle - which is why some investors bought the few properties in the early 2000s with a firm belief in the potential of this city of the future. Today, Dubai is on its way to becoming the smartest city in the world. It is already home to the world's tallest building ' Burj Khalifa', which is a luxury hotel with seven-star service.

Property options in Dubai

There are three main types of properties that you can purchase in Dubai as an expat. These are freehold properties, commonhold properties and usufruct properties.

Freehold properties

When you purchase a property on freehold, you have full ownership of that property. In essence, you have full rights over the property, and can make changes to the structure, upgrade it, and even sell, lease, or rent the property if you wish.

As this is a highly sought-after investment option by many expats, you are advised to do your research well. The designated freehold areas do not include older parts of Dubai such as Bur Dubai or Karama, but potential investors have choices over other areas such as Dubai South or Pearl Jumeirah. Prices, of course, vary depending on many factors such as the size of the property or land and the location.

If you intend to rent out your property, make sure to research whether this is allowed and can be done easily. While it might seem lucrative to invest in luxury villas, demand will need to match accordingly. With other expats coming into Dubai to work and seeking rentals, you will need to evaluate whether they are looking for property to accommodate an entire family or if it's only for a sole tenant.

Commonhold properties

Commonhold properties generally include condominiums, apartments and non-residential units.

When you purchase this type of property, you will get the right to sell it or rent it out. It's quite similar to a freehold property. However, as most commonhold properties are apartments in apartment buildings and condominiums, you will need to make regular payments for property maintenance.

Usufruct properties

Usufruct properties are properties that are leased (rather than sold) for long-term investments. The occupant of the property will not be able to make any changes to it — but will have the right to rent it out. Usufruct properties can be leased for as long as 100 years.

Property prices in Dubai

The most popular areas for buying an apartment are the Dubai Marina (studio prices as from $ 228,000), Downtown Dubai (studio prices as from $ 333,505), Jumeirah Village Circle (studio prices as from $ 125,234), Jumeirah Lake Towers (studio prices from $ 190,574) and Palm Jumeirah (studio prices from $ 323,977). The most expensive is Downtown Dubai, being home to the tallest building in the world, Burj Khalifa and the biggest mall, Dubai Mall. The area with the lowest price is Jumeirah Village Circle, a family-oriented community consisting of villas and apartments. It is a quiet area that is easy to get in and out of. There are no major shopping centres there, but many properties have direct access to grocery stores.

Good to know:

Following the COVID-19 pandemic, property prices in Dubai have fallen — with the property consulting company ValuStrat reporting a decrease in the price of residential property of as much as 12.3%. This makes 2021 and the following years a particularly good time for property investments in the region.

Note that in addition to the price of the property you are buying, you will need to pay additional fees. Typically, these include:

  • NOC (No Objection Certificate) fees: these range from AED 500 to AED 5000.
  • Registration fees: typically, about 4% of the total property purchase price.
  • Real estate agency fees: about 2% of the total property purchase price.

Depending on the type of property you are buying, there may also be additional charges: for instance, property maintenance fees.

Apart from the potential costs, there could also be extra charges. They could be applied to the office of the property developer as well as the DLD. You may also have to pay fees for a community/building to the real estate developer.

If you want to take out a mortgage on your property purchase, make sure to check with your bank about the conditions of the mortgage loans given out to foreign residents. For instance, if you are investing in a real estate property valued at close to AED 5 million, you will be able to ask for a loan of as much as 75% of the total property value.

Good to know:

Note that purchasing property in the UAE for over AED 5 million qualifies you for the Golden Visa Program. In this case, you will be able to receive a 5-year residence in the UAE.

Useful links:

Dubai Land Department

Dubizzle

Property Finder

Khaleej Times

Bayut

We do our best to provide accurate and up to date information. However, if you have noticed any inaccuracies in this article, please let us know in the comments section below.