Is It Worthwhile to Buy Property in Dubai?
Dubai ranked fifth in the “100 Best Cities in the World 2023” by Resonance based on factors like weather, attractions, education, GDP per capita, culture and nightlife.
With expats making up 85% of the city’s population and more foreigners relocating, there has been a strong appetite for property investments in Dubai.
In fact, a recent report forecasts Dubai real estate to experience a 46% market growth in another strong bull run this year.
Investing in the Dubai real estate market means more than just owning property in one of the best cities in the world.
You also get benefits like zero property taxes, lower property prices, a variety of property options, a residence visa and high rental yields.
So, if you’re still wondering whether it’s worthwhile to buy property in Dubai or not, read on to find out.
Dubai Has no Annual Property Tax
One of the biggest benefits of buying property in Dubai is its zero property tax policy. Since the city has a strong economy, it doesn’t rely on tax for its income.
However, you still need to pay some fees as part of purchasing a property in Dubai, This includes:
|Dubai Land Department (DLD) Fees||Property Registration Fee||Dubai Land Department (DLD) Mortgage Registration Fees|
|4% of the purchase price (Property transfer fee)||$545 + 5% VAT (Properties valued below $137,000)||0.25% of the loan amount + $78.95|
|$157.91 Admin Fee for apartments and offices||$1,090 + 5% VAT (Properties valued above $137,000)|
|$117.07 Admin Fee for land|
|$10.89 Admin Fee for off-plan|
Ideally, the 4% DLD fee should be divided between the buyer and seller. But in reality, you need to pay the entire amount along with the property registration fee as the buyer.
You also need to pay $68 for the new ownership certificate after the sale is finalized.
While there’s no annual property tax in Dubai, you need to pay an annual property maintenance fee that’s established by the developer and would cost between $15 and $60 per square meter.
This fee will be used to maintain common areas, sports facilities and children’s playgrounds, and for capital repairs around the property.
There’s also a 5% municipal rental tax,which will be paid by the tenant if you choose to rent out your property.
Here are some other fees that you should expect when buying property in Dubai:
|Real Estate Agency Fees||Mortgage Fees||Insurance Fees|
|Real Estate Agent Fees|
(2% of the total sale price + 5% VAT)
|Bank Mortgage Arrangement Fee|
(1% of the loan amount + 5% VAT)
|Home and Contents Insurance|
($1,634 to $2,723)
|Property Valuation Fee|
($681 to $953 + 5% VAT)
(0.4-0.8% per annum on the decreasing loan balance
Properties in Dubai Cost Lower than Other Major Cities
Dubai may be one of the best cities in the world to live in, but it’s not the most expensive.
In fact, buying a property in Dubai costs up to 70% less than you would pay for a similar property in New York, London and other major cities in the world.
In this table, we compare apartment prices per square meter in Dubai versus other cities:
|City||Apartment Price per Square Meter|
Here, you’ll see that Dubai has the lowest price per square meter among all these major cities and you also don’t need to pay for taxes, which makes the acquisition cost lower.
Dubai Has Some of the Best Property Options
Dubai is a city like no other in terms of its landscape. From a manmade island to the tallest block in the world, the city offers a wide variety of options when it comes to properties.
The prices of properties in Dubai will depend on factors like location, neighborhood, amenities and accessibility to the city center.
Depending on your needs and lifestyle, you can choose from these types of properties in Dubai:
In a recent estimate from Statista, Dubai had over 743,000 residential units and 45,000 new apartments are set to be added in the next few years.
Since Dubai is a highly urbanized city, you’ll see that most of its residents prefer to live in apartments located within the city.
Apartments can vary from studios, 1-bedroom, 2-bedroom and 3-bedroom units and prices will also depend on where you’re buying in the city.
You also have duplexes, lofts, hotel apartments and penthouses to choose from.
|Type of Apartment||Average Sale Price|
Top Areas to Buy an Apartment in Dubai
There are many locations in Dubai that offer apartments in low-, mid- and high-rise buildings, but these areas are the top communities in the city to invest in an apartment:
|Residential Community||Average Sale Price per Square Foot||Return of Investment (ROI)|
|Jumeirah Village Circle (JVC)||$245||6.84%|
|Jumeirah Lake Towers (JLT)||$269||7.49%|
If you don’t want to live in an apartment, you have the option to invest in a villa, which has more living space and usually comes with a garden and garage.
Villas can range from three- to seven-bedroom units and they can also be attached, detached and semi-detached.
The average sale price of a villa in Dubai is $462,825 and the best areas in the city to buy a villa include:
|Residential Community||Average Sale Price||Return of Investment (ROI)|
|DAMAC Hills 2 (Akoya by DAMAC)||$299,475||6.40%|
|Dubai Hills Estate||$1,061,774||6.22%|
|Jumeirah Village Circle (JVC)||$544,500||7.60%|
If you want to live in a separate residence but a villa is out of your budget, you have the option to go for a townhouse.
Dubai has a lot of communities offering attached and semi-attached townhouses with an average sale price of $272,250:
|Residential Community||Average Sale Price||Return of Investment (ROI)|
|Jumeirah Village Circle (JVC)||$462,825||6.20%|
|DAMAC Hills 2 (Akoya by DAMAC)||$272,250||5.75%|
Dubai Offers a Residence Visa for Property Investors
Another huge benefit to buying property in Dubai is the opportunity to be a resident of the United Arab Emirates (UAE) where the city is an emirate.
The Dubai government now offers a Dubai investor visa for foreigners who invest in property in the city.
You can be eligible for a three-, five- or ten-year residence visa depending on a set of criteria that you need to meet.
|Three-Year Residence Visa||Five-Year Residence Visa||Ten-Year Residence Visa|
|Property must be worth at least $204,188||Property must be worth at least $544,500||Property must be worth at least $2,722,496|
|Spouses can share a single property investment as long as its valued for at least $272,250||If the property is mortgaged, 50% of the property value should be paid to the bank||If the property is mortgaged, 50% of the property value should be paid to the bank|
|If the property is mortgaged, 50% of the property value should be paid to the bank||The investor must keep the property for at least 3 years|
|Investor can’t spend more than 6 consecutive months outside the UAE|
If you qualify for a ten-year residence visa, you also get the privilege to apply for a visa for your spouse, children, one executive director and one advisor without any additional conditions.
Benefits of a Residence Visa
Being issued a residence visa in the UAE will allow you to enjoy benefits such as:
- Being in a safe and secured city that puts a huge value to its residents
- Working or doing business in a city where there’s no income, net worth, withholding and capital tax
- Being in a member state of the Arab League, Gulf Cooperation Council (GCC) and United Nations
- Residing in a city with some of the best amenities and attractions in the world
Dubai Properties Have a Very High Rental Yield
Being a highly urbanized and modern city, Dubai attracts a lot of foreigners who want to work, do business or just enjoy what the city has to offer.
This is why there’s a constant demand for apartments, villas and townhouses for rent, especially in ideal locations around the city.
In fact, you can expect a gross rental yield of 5 to 9% as an investor depending on where your property is in Dubai.
According to a recent report, these are the top areas in Dubai to look into if you want to invest in property that could offer the highest rental yield and Return of Investment (ROI):
|Residential Community||Property Segment||Average Rental||Rental Yield/ROI|
|Dubai Marina||Luxury apartments and villas||• $24,775 per year for a one-bed apartment|
• $38,115 for a two-bed apartment
• $56,356 for a three-bed apartment
|International City||Affordable apartments||• $6,262 for a studio apartment|
• $7,896 for a 1-bed apartment
• $12,524 for a 2-bed apartment
• $19,058 for a 3-bed apartment
|Jumeirah Village Circle (JVC)||Budget-friendly villas||• $9,801 for a studio flat|
• $13,885 for a one-bed villa
• $19,875 for a two-bed villa
|DAMAC Hills||Buy-to-let villas||• $17,152 for a three-bed villa|
• $26,681 for a five-bed villa
Dubai Is an Ideal City to Live In
Buying property in Dubai means that you’re owning a piece of prime real estate in a country with all the modern amenities that you can think of.
There are many benefits to living in Dubai including:
- An exceptional lifestyle
Dubai offers a very high living standard that you’ll only find in more expensive cities around the world.
Aside from world-class infrastructure projects like the Burj Khalifa, Dubai is also filled with many attractions and establishments that can cater to your every need.
- Safety and security
Dubai has a very low crime rate because the government imposes strict rules for residents to abide by.
Here, you can walk alone confidently at night or live in a house alone without worrying about any intruder coming at you at any time.
- Tax-free income
Perhaps one of the biggest benefits of living in Dubai is its tax-free income policy where you get to enjoy substantial earnings without any tax deductions.
Dubai also charges only a 5% VAT for different goods and services, so you can expect the prices of commodities and other products to be lower than other cities.
This gives you the opportunity to live a high quality life while building your wealth.
It’s Worthwhile to Buy Property in Dubai
Dubai’s real estate market is definitely on a roll with rental prices going up due to the high demand for residential properties in the city.
So, if you’re thinking about buying property in Dubai, make sure that you’re choosing the right location to get the most out of your investment.
Take advantage of the lower costs and the opportunity to be a resident of the UAE by becoming a property investor in Dubai as a way to expand your investment portfolio.