What are the pros and cons of buying a property in Dubai?

  Buyer's Guide

Dubai is known for its impressive skyscrapers, attractive waterfront tourist spots, and some of the top malls in the world. It is also one of the world’s metropolises that is growing at one of the quickest rates. You can also buy property in Dubai, which you can use to either increase your current investment portfolio or secure a home in one of the best property markets in the world. Other attractions in Dubai include the tallest skyscraper and islands shaped like palm trees. However, these aren’t the only things to see and do in Dubai.

Buyers and investors will gain a better grasp of the possibilities available to them if they are aware of the benefits and potential pitfalls associated with the purchase of real estate in Dubai.

Dubai property investment benefits

Your priorities, the number of people in your family, your financial concerns, and, if you are an investor, your financial aspirations should guide you as you select the ideal location in which to purchase real estate in Dubai. Because it offers such a diverse selection of cutting-edge, forward-thinking, and one-of-a-kind residential communities, the city is a treasure trove for real estate investors.

Every type of property investor or person looking for a new home can find what they’re looking for in the emirate, from modest flats with one bedroom to opulent townhouses, from expensive villas to affordable apartments with one bedroom. It is anticipated that the planned developments for Expo 2020 would provide an increased number of investment options for purchasers. Considering that projects of this nature are currently under way and that Dubai’s real estate market appears to be on the upswing with prices that are competitive, the timing is ideal for investing in real estate in Dubai.

Keeping this in mind, the following are some additional positive aspects of investing in real estate in Dubai:

Luxury property availability

When compared to properties purchased in other places, the return on investment (ROI) for desired real estate is reported to be significantly higher. Bayut’s analysis on the property market for the third quarter of 2019 indicates that investors’ interest in luxury neighborhoods in Dubai has increased. According to the findings of the third quarterly survey of property prices in the emirate, Dubai Marina is the most popular region for purchasing homes in Dubai. The neighborhood of Palm Jumeirah, which is shaped like a tree, is a close second.

According to the year-end property market report published by Bayut for 2019, Dubai Marina maintains its position as the most preferred location in which to purchase homes in Dubai. According to the findings of the study, real estate prices in Dubai have decreased on average per square footage in comparison to 2018. This has led to an increase in transactions, which in turn has helped to maintain the area’s popularity. At the moment, the lowest price for one-bedroom apartments that are now up for sale in Dubai Marina, particularly at Sparkle Towers, is AED 325,000.

According to the aforementioned reports, Palm Jumeirah comes in at number two on the list of desirable locations in which to purchase property in Dubai. For instance, people who are interested in making an investment in real estate may want to take into consideration the studios that are currently available for purchase in Palm Jumeirah. The beginning price for these apartments is currently listed at AED 600k. Those who are interested in purchasing larger homes will find that the 2-bedroom villas that are currently available for purchase in Palm Jumeirah are also suitable investment selections. The beginning sales price for these villas is currently listed at AED 4 Million.

On the other hand, even if you are interested in investing in houses that are lower in price, Dubai gives you a wide variety of possibilities to choose from. Studios can be found at a variety of pricing points within the AED 300,000 price range in locations including International City and the Dubai International Media Production zone. A comparison of the pricing of homes in Dubai will assist potential buyers and investors in making an informed decision about what will work best for them.

Low-cost luxury homes

According to the findings of the Knight Frank Wealth Report for 2019, the prices of luxury real estate in Dubai are substantially lower than those found in the real estate markets of other major cities across the world, such as Hong Kong, London, and New York. Any prospective buyer should have no problem persuading themselves to purchase luxury real estate in Dubai because of the abundance of great properties that both meet and exceed the standards of those found in these cities. The luxury portfolio offered by the emirate is unrivaled, and it includes everything from fully-furnished apartments to opulent villas and premium penthouses. For instance, investors who are interested in villas may want to think about luxury-centric locations such as Jumeirah Village Circle (also known as JVC) and Emirates Hills.

Affordable off-plan property

The fact that developments that haven’t been built yet may be purchased at rates that are substantially lower is one of the most obvious advantages of purchasing off-plan property for sale in Dubai. When compared to newly created developments, investments are seen as more financially realistic when they have enticing payment plans and feasible offers.

Off-plan real estate in the emirate provides buyers with a high degree of financial flexibility, which is beneficial to both first-time buyers and experienced investors alike. Because numerous projects are released on a monthly basis, developers frequently begin to compete with one another over favorable pricing structures and financial models. For instance, a developer might propose a payment plan that requires purchasers to put down fifty percent of the total cost up front and the remaining fifty percent when the project is finished.

Taking into consideration the potential downsides of investing in pre-construction real property in Dubai will assist you in avoiding potential problems during the purchasing process.

Freehold areas

Expats and other non-local nationals are permitted to purchase real estate in certain neighborhoods in Dubai. These communities, which are also known as “freehold areas,” provide potential buyers from other countries with a variety of housing options to choose from, including apartments, villas, and communities that offer a combination of the two. The neighborhoods of Arjan, Business Bay, Barsha Heights, Downtown Dubai, Discovery Gardens, DIFC, and Dubai Marina are among the most desirable freehold areas in Dubai.

Continuous progress/development

Investing in real property in Dubai may turn out to be the smartest choice you ever make, given the forward-thinking policies and initiatives that have been implemented by the government of Dubai. The emirate has shown that nothing is impossible by accomplishing projects such as erecting an artificial archipelago two kilometers to the north of its shoreline as well as the tallest skyscraper in the world.

The value of properties that are bought will likely increase as a result of the introduction of new road links, shopping malls, and recreational centers that are scheduled to be built as part of successively planned new developments.

Engineering advancements, such as those that will see developers implementing revolutionary smart technology within villas and apartment complexes, are another notable addition that will add a substantial amount of value to properties that are purchased and are expected to be added in the near future.

Good rental yields

The high return on investment (ROI) that is offered to purchasers and investors in Dubai real estate is one of the primary benefits of purchasing property in Dubai. When it comes to apartment sales, the majority of the city’s most important neighborhoods offer a return on investment of more than 6%, and the communities comprised of villas often give rental returns of more than 4%. Rental yields that are more than 9 percent can be found in a number of Dubai’s most prominent real property markets, such as International City. Those who are interested in buying property in Dubai should definitely take this factor into consideration.

To help you calculate the potential rental yield of a property investment, you can use a Rental Yield Calculator tool. This tool can help you estimate the return on investment based on factors such as the property’s purchase price, monthly rent, and other expenses. You may want to check out our Rental Yield Calculator tool to get started.

By considering the potential rental yields carefully and using tools like the Rental Yield Calculator, investors can make informed decisions and maximize their returns on Dubai property investments. With the help of a knowledgeable real estate agent and a reliable mortgage provider, investing in Dubai property can be a rewarding and profitable experience.

Dubai property visa

Since the beginning of this year, those who invest in real property are now now qualified to apply for permanent resident visas. Those with real property assets totaling 5 million UAE Dirhams are now eligible to apply for the 5-year long-term visa, which provides them with greater stability. Another perk of investing in Dubai real property is that investors can facilitate their family members’ property of a long-term visa through sponsorship by the investor themselves.

It is beneficial to purchasers looking for homes in Dubai to have knowledge of the areas of the city that are considered to be the greatest places to reside.

Tech advances

Those who are interested in purchasing real property in Dubai with the intention of making the city their permanent home have a lot to gain as a result of the emirate’s progress toward becoming a smart city. The city is the ideal location for property ownership because it features cutting-edge amenities, an enhanced public transportation system, and cutting-edge entertainment locations. One example is the RTA’s smart services, which provide citizens with access to about 173 apps that can make their regular commute less time consuming and more convenient. The Dubai 2021 Plan, which was proposed by Smart Dubai and intends to transform the emirate into a “smart and sustainable metropolis” over the course of the next several years, is an additional step in the right direction.

Secure living

It is well acknowledged that the emirate of Dubai is one of the safest places to call home anywhere in the globe, making it an excellent option for households consisting of young children. A few examples of how the city ensures the safety of its citizens include the Smart Police Stations and the online Al Ameen Service. Both of these services allow residents to make anonymous reports of criminal activity. In addition to the most recent innovative approaches that can stop criminal activity in its tracks, the emirate is very consistent in its application of the law. Investing in real estate in Dubai can provide you with a number of benefits, one of which is access to a safe living environment.

Challenges with Dubai as a Place to Live

Before making any kind of investment, it is essential to give some thought to the common disadvantages of purchasing property in Dubai, despite the fact that investing in the Dubai real property market comes with a number of distinct advantages. In light of this, the following are some drawbacks associated with investing in real estate in the emirate:

FIRST PURCHASE in addition to any additional fees or charges

When thinking about purchasing real property in Dubai, one of the things you should take into consideration is the initial expenditures that come along with the purchase. For instance, individuals who purchase real property without going through an intermediary and directly from a developer will be required to pay certain fees to the Dubai Land Department (DLD). All of these fees, including the DLD cost, which is equal to 4% of the property’s value, the fee for issuing the Title Deed, and the administrative fee, must be paid in full before the transaction can be finalized.

In addition to the administration charge, buyers who finance their purchases with mortgages are required to pay a Mortgage Registration Price to the DLD. This fee is equal to 0.25 percent of the total value of the mortgage. The fact that the Mortgage Registration Fee will not be applicable to prospective investors who intend to make investments using only cash payments is, on the other hand, excellent news. Reviewing the costs associated with purchasing property in Dubai is something we strongly recommend doing so that you gain greater information. You may get a better sense of the alternatives accessible to you by researching the various mortgages that are offered in Dubai.

Those who are considering purchasing property in Dubai should be aware that, despite its drawbacks, the real estate market in Dubai offers a multitude of advantageous investment prospects. Check out the top real property investment neighborhoods in Dubai to locate the properties that would provide the most return on your investment. Are you looking for anything more particular in investments on a larger scale? In that case, our analysis of acquiring a villa in Dubai may be of assistance to you in gaining a general understanding of the ins and outs of purchasing a home in the emirate. Are you interested in making an investment in commercial real estate? Before making a commitment, it is important to have a solid understanding of the commercial real property markets in Dubai’s various districts.