Buying property in Dubai

Dubai has long been a popular location for property investors and expats looking to buy a place to live themselves. In fact, British citizens are the fourth largest group of investors in Dubai real estate, after Emiratis, Saudis and Indian citizens.

If you’re thinking of buying property in Dubai, read on for all the information you need, including:

• Can a UK citizen buy property in Dubai?

• Do you get residency if you buy property in Dubai?

• Can an expat get a mortgage in Dubai?

• Is buying a house in Dubai worth it?

What are the requirements to buy a house in Dubai?

Foreigners can buy a property in Dubai on a freehold basis - but only within areas which have been designated by the government. These areas are usually just referred to as the freehold areas of Dubai, and include some very highly sought after locations when it comes to property investing.

Investing in real estate in Dubai may also help you to get a so called Golden Visa. Usually real estate investors with a property worth 5 million AED or more can apply for a 5 year residence permit, while people with higher levels of investment in the country may even be able to apply for a 10 year residence pass.

Assuming you’re looking to buy a property in a designated area you won’t need to jump through many specific hoops to be able to make your purchase. You’ll need financing and you’ll have to show your ID paperwork to get registered as the new owner, but you can buy without being a resident of Dubai fairly easily. It’s normal to work through local estate agents and specialist agencies to make sure the purchase goes through smoothly.

How to buy a home in Dubai step by step

The basic process to buy a property in Dubai is similar to buying a place in the UK. However, there are some variances based on the type of property you’re buying and the financing you have in place. More on that in a moment.

Here are the basic steps you’ll need to take:

1. Set a budget for buying your new Dubai property

2. Research and view properties online, in person or through an estate agent

3. Negotiate a selling price once you’ve found the right place for you - you can do this by yourself or through an agent

4. Once you’re ready to proceed both you and the seller will sign the sales contract known as the Memorandum of Understanding (MOU) in front of a witness

5. Pay a deposit - usually 10% of the agreed price

6. Meet with the seller and your estate agent at the office of the development you’re buying, to get a No Objection Certificate (NOC) - this is issued after checking there are no outstanding charges on the property

7. Meet the seller at the Dubai Land Department (DLD) to complete the property transfer and registration

8. Pay the remaining purchase costs and fees

If you plan on using a mortgage to buy your new Dubai property you’ll have another couple of steps to take. Firstly you should get a preapproval on the mortgage amount available before getting started, and then you’ll also usually have to have the mortgage approved by the DLD before you apply for the No Objection Certificate.

Different processes again may apply if you’re buying off plan or want to invest in a commercial property. In each case, getting a reputable local estate agent to help is essential.

Dubai property prices

Property in Dubai has a reputation for being luxury with a lower price per square metre than in many other similar large global cities. The actual price you pay will depend enormously on whether you’re looking for a small one bed apartment, or a luxury pad in a famous development - but the good news is that there’s a lot of properties available and something for most budgets.

In recent years, Dubai has also been seen as something of a buyers market with the opportunity to negotiate on the asking price of properties. To give an example, let’s look at average prices for Dubai Marina in the first quarter of 2022:

• 1 bedroom apartment - average asking price: 1,295,000 AED (about 270,000 GBP). Average transaction sales price: 1,200,000 AED (about 250,000 GBP)

• 3 bedroom apartment - average asking price: 3,500,000 AED (about 725,000 GBP). Average transaction sales price: 2,300,000 AED (about 475,000 GBP)

• 5 bedroom apartment - average asking price: 12,000,000 AED (about 2.5 million GBP). Average transaction sales price: 6.750,400 AED (about 1.4 million GBP)

We’ll look more closely at the best places to buy property in Dubai next.

Best places to buy property in Dubai

If you’re buying freehold property in Dubai as a foreigner you’ll have to stick to designated freehold areas which have government approval for overseas buyers. The good news is that these take in many popular locations, including:

• Dubai Marina

• Downtown Dubai

• Jumeirah Village Circle (JVC)

• Arabian Ranches

• Dubailand

• Palm Jumeirah Arabian Ranches

There are many real estate agents and specialist agencies in Dubai to help foreign buyers and investors find the right place for their needs. Choosing a great professional support team on the ground in Dubai can make it far easier to find the perfect Dubai property for you.

Cheapest places to buy property in Dubai

Ultimately where you can buy a freehold property in Dubai will be based on the government designated areas which are open to foreign buyers. You may have more flexibility if you’re looking to buy a leasehold property - but taking professional advice before you get started is definitely essential.

Many areas of Dubai have a good mix of property types and prices, which means you may be able to find a relatively cheap place even in unexpected locations. Here are a few thoughts to get you started:

• For affordable apartments, popular locations include International City and Dubai Production City IMPZ

• If you're interested in buying a townhouse or villa try Serena or Al Warsan

• You can also buy off plan - although this does come with a different process and its own risks compared to buying a completed property, you may be able to strike a good deal with the developer

• Consider buying commercial property instead - if you’re looking for a pure investment rather than a place to live, check out cheaper commercial and office properties as well

Is buying a house as an investment in Dubai a good idea?

It’s common to buy property in Dubai as an investment. However, as with any investment - especially one with such a high price tag - you’ll need to take professional advice and do your research thoroughly first.

Dubai certainly includes some enviable and well known locations where property is highly sought after. These places tend to be better for experienced investors looking to buy high value properties, but there are also more affordable options which may suit people with a lower budget. Overall, Dubai is generally seen as a place to buy luxury property which comes with lower prices than other global hubs like London or Shanghai. Dubai also does not levy tax on purchased property or rental income - but you may need to pay tax in your home country if you're not a Dubai resident.

Ultimately, whether investing in Dubai property suits you or not will depend on your budget, your preferences and how long you’re prepared to leave your money tied up in the property.

What’s the property market like in Dubai?

The property market in Dubai did extremely well in 2021 - in fact, the city ranked third in the world on residential capital growth, showing a 17% increase in property costs. Commentators in the region are putting this down to a number of positive moves by the Dubai and UAE governments, which have been aimed at attracting more foreign investment and maintaining competitiveness on the global stage.

The growth in property prices looks as though it may continue into 2022, with ultra-high end properties, villas and townhouses proving popular. This is likely to be as people relocate to Dubai and look to move into more spacious properties as a result of their experience during lockdowns caused by the global pandemic.

How much does it cost to buy property in Dubai?

Prices of Dubai property vary widely between property types and locations. Often the easiest way to compare is to look at the price per square foot across different locations. To help build a picture of the costs of buying property in Dubai, here are the most recently available prices for apartments, per square foot in a few popular expat locations in Dubai.

• Data taken from Propertymonitor.ae; correct at time of writing, 18 March 2021

The additional costs involved with buying property in Dubai are very low compared to other countries. However, you’ll need to build a little extra into your budget to cover some typical fees. These can include:

• Title deed costs of 250 AED - around 50 GBP

• Registration fees of 2% of the property value

Other costs, including the estate agent fees, are usually paid by the seller.

Financing a property purchase in Dubai

There are a few common ways to finance a property purchase in Dubai:

• Buy in cash using savings

• Get a mortgage in Dubai through a bank or broker

• Get a mortgage or loan in the UK

• Refinance your UK property and use the cash to buy in Dubai

If you’re a cash buyer in Dubai you may have more room for negotiation compared to someone buying with a mortgage. This can mean you get the best possible deal.

Whichever route you think you’ll take it’s worth getting professional advice to help you decide which option might suit you. We’ll look at Dubai mortgage options in a little more detail next.

Getting a Dubai mortgage

It’s possible to get a mortgage in Dubai as a foreigner, although each bank sets its own rules and eligibility requirements so you’ll have to shop around to find the right one for you.

You’ll usually be able to borrow up to 60% or 70% of the property value - and in some cases more if you’re a Dubai resident and plan to live in the place yourself. Expect the terms available to differ for expats compared to locals, and be prepared to put together a suite of supporting documents to go with your mortgage application, covering your income, outgoings and personal financial situation.

Paying property tax in Dubai

Dubai does not have any property tax, or tax on rental income if you decide to let out your place. However, you may still be liable for taxes in your home country if you’re not a Dubai resident, so you’ll need to make sure you fully understand your tax obligations before you buy.

It’s also worth noting that there has been discussion of bringing in a stamp duty in Dubai which would mean a one off cost at the time of buying a property.

How easy is buying property in Dubai for foreigners?

Dubai is a major hub for expats and foreign investment, which means you’ll find it relatively easy to understand the property buying process, and access all the help and support you need. However, there are a few pitfalls you’ll want to avoid when buying a property in Dubai as a foreigner.

Here are some common problems and things to think about:

• Ensure any agents you deal wiser registered with the Real Estate Regulatory Authority (RERA)

• If you’re buying as an investment make sure you can leave your property for at least 5 to 10 years before selling for the best chance of growth

• Consider traffic when picking a location - commuting can be tricky, and congestion is a problem

• Research developments carefully and talk to existing residents if you can to get a feel for the area

• Make sure you know all service charges and other ongoing costs and have factored them into your budget

How to find a Dubai property

Searching for property in Dubai is easy - even if you’re not in the country. There are plenty of estate agents and umbrella websites which pull together listings from around the city, which can be a great place to start when finding your new Dubai property.

Browse and search different areas and price points to get a sense of what’s available and what you like. Some sites also have live sales price data which helps you see whether properties in your preferred area are achieving their asking price regularly, or if there’s room for negotiation on price.

For most people the next step is to engage a local agent to help support their search. Make sure your preferred agent is RERA registered and comes with recommendations from past clients.

Dubai property websites

Here are a few popular Dubai property websites to get your search started:

• Bayut

• Property Finder

• Houza

• Zoom Property

Conclusion

Dubai is a popular place for Brits and other foreigners to invest in real estate. There are also many Brits and other expats living in Dubai who may want to buy a place to settle down in the city longer term. The good news is that you can buy properties in Dubai as a foreigner with a relatively small number of restrictions, and with low overall transaction costs. There’s a great deal of real estate available, and Dubai is also taking steps to ensure it stays attractive and competitive on a global scale - which could lead to an uptick in demand in the longer term.

If you’re looking for a property to buy in Dubai this guide should be enough to get you started. Get researching to find your perfect place, and good luck!