Purchasing a property in Dubai is a dream for many people, especially investors who want to achieve a profitable return from owning a property in Dubai, including homes, stores, or even construction units on residential islands. It is no secret that the urban and economic progress witnessed by the United Arab Emirates, particularly the city of Dubai, attracts large numbers of tourists by providing various forms of real estate investment and an endless group of residential and commercial complexes designated for sale or rent.
In addition to the development of infrastructure in all its fields and its positive impact on the reality of housing and construction throughout the entire area of the emirate. Through this article on the website Properties Portal we will review for you the most prominent advantages and disadvantages of purchasing a property in Dubai, in addition to clarifying all the details related to this matter that are of interest to Arab and foreign investors alike. Let’s follow along.
Benefits of purchasing a property in Dubai
The benefits of purchasing a property in Dubai lie in the following points:
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Investment tax exemption:
The Dubai real estate market is characterized by tax exemption on the purchase of any property, including personal income tax, property tax, or capital gains tax. This encourages well-off investors to invest their money in property within Dubai and achieve profitable returns without any tax implications later.
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Stability and prosperity of the Dubai real estate market:
The real estate market in Dubai is witnessing remarkable growth and continued stability despite price fluctuations and the movement of global economic markets. This results from the government’s successful policies and permanent contribution to supporting safe and profitable urban projects. As well as the development of infrastructure, means of transportation, and entire areas of daily life, which reflects positively on citizens and foreign expatriates.
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Diversity of investment properties:
Dubai offers its citizens and expatriates different types of properties, commensurate with each investor’s preferences and financial capabilities. Whether residential apartments, villas, homes with a sea view, large stores and halls, or other diverse options.
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Foreign investor obtaining of ownership rights:
Dubai allows foreign investors desiring to own a property within freehold areas to obtain full ownership rights. This step attracted many investors and significantly contributed to supporting Dubai’s real estate market in recent times.
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Obtaining a golden residency visa:
The UAE government has made it possible to grant golden residency to investors desiring to live, work, invest, and establish private projects within the UAE. This is what encouraged novice entrepreneurs to purchase real estate in Dubai, invest in it successfully, and obtain golden residency for a long time.
Advantages of purchasing and owning a property in Dubai
Purchasing and owning a property in Dubai has many important positive features, which are as follows:
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The evolving security and economic reality in Dubai.
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Diversity of real estate ownership options.
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Permanent innovation in infrastructure and urbanism.
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Continuous population growth.
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Obtaining a property visa in the UAE.
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Freehold areas.
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Acceptable ownership costs.
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High rental yields.
The evolving security and economic reality in Dubai
The feeling of security and continuity that the United Arab Emirates enjoys is one of the most important advantages of purchasing a property in Dubai. Investors are looking for the safest and most advanced areas in terms of economic and social life to invest their money in owning a house or a store and achieving reasonable and increasing financial profits depending on the quality and cost of the property. This can be achieved by renting or selling it without any annoying security problems or obstacles.
Diversity of options for purchasing a property in Dubai
The real estate market in Dubai is full of a wide range of options available for purchase and ownership. Including residential and commercial properties. When desiring to own a residential property, the investor can purchase a house, a floor apartment, or a villa. If he wants to obtain a commercial property, he has several diverse options, including offices, stores, industrial properties, labor camps, and other practical and professional options.
Permanent innovation in infrastructure and urbanism
Dubai has achieved advanced ranks among the rest of the world’s capitals in terms of urban innovation and support of its infrastructure. In preparation for it to soon become one of the smartest cities in the world. This is what makes it a distinguished destination for investors desiring to purchase and own residential or commercial real estate in Dubai, where they feel reassured as a result of putting their money into successful profitable projects. In order to achieve continuous financial sustainability as a result of the development of the infrastructure in the emirate and its resistance to all external and temporal factors.
Continuous population growth
The city of Dubai is witnessing continuous and increasing population growth, as it receives visitors from more than 200 countries around the world. These people want to live and work in the emirate, and this in turn has contributed to the revitalization of the real estate market and the popularity of purchasing real estate in Dubai. This is to meet the expatriates’ need for residential places prepared for rent at fairly high prices, and thus achieve an excellent profit return for the investor who owns the property.
Obtaining a property visa when purchasing a property in Dubai
Foreign investors obtain a residence visa in exchange for purchasing a property in Dubai. This is after fulfilling several requirements for issuing a visa. Including that the property must be fully habitable and its value should not be less than 750 thousand UAE dirhams. Therefore, the buyer can contact the Dubai Land Department to complete the procedures for obtaining a property visa.
Purchasing a property in Dubai within the freehold areas
The Dubai government has allocated a group of areas for purchasing real estate for Arab and foreign expatriates under the name (freehold areas). It includes many ownership options, including apartments, villas, and shops, in several places, the most notable of which are:
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Arjaan.
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Dubai International Financial Centre.
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Business Bay.
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Downtown Dubai.
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Dubai Marina.
Acceptable ownership costs
The cost of purchasing a property in Dubai is considered very acceptable compared to the prices of purchasing real estate in the world’s advanced urban and real estate capitals. The average price per square foot in Dubai is $468, while in London you must pay $3,208 to get the same property.
High rental returns in Dubai
Real estate rental returns in Dubai are witnessing high prices, thus achieving high profits for owners from Arab and foreign investors. The average rental yield in Dubai is 10%, while the average rent in New York is about 3.91% and in London, it is 3.21%. Likewise, in Singapore, it is 2.83%, and in Hong Kong, it is 2.82% of the rental return.
Disadvantages of purchasing a property in Dubai for foreigners
The most prominent disadvantages of purchasing a property in Dubai for foreign investors are as follows:
- Initial expenses for purchase are high.
- high costs of home maintenance in Dubai
- Increased house purchase prices in Dubai.
The initial expenses of purchasing a property in Dubai are high
A foreign expatriate incurs high initial costs when purchasing and owning real estate in Dubai. Especially when wanting to own a luxury property in the center of the emirate, the buyer is shocked by the amount of fees imposed by the Dubai Land Department, amounting to 4% as a percentage imposed for transferring ownership. In addition to the costs of the sales agreement, the expenses of real estate agents and lawyers, and other expenses that must be paid by the buyer.
The high costs of home maintenance in Dubai
Buyers often want to carry out general maintenance on the property they own in Dubai. But the surprise is that maintenance costs have risen significantly, including changing the water heater or installing gypsum board for ceilings and wallpaper, or repairing and changing damaged interior doors, and maintaining water and electricity installations, at very high costs.
Increased house purchase prices in Dubai.
House prices in Dubai are witnessing a significant increase in their material value, which constitutes a burden on the foreign buyer if he does not have sufficient capital to purchase the house in cash. Here, he often has to apply for a real estate loan and mortgage the property for a long period, with the need to commit to paying the installments to ensure that the property is not seized and sold at public auction.
The advantages of purchasing residential property in Dubai for 2023/2024
The advantages of purchasing residential real estate in Dubai for the current year 2023 are as follows:
- Tax exemption for many taxes, including income tax and property tax.
- The stability of the exchange rate of the UAE dirham against the US dollar for more than 20 years, so that no financial losses occur to the investor as a result of exchange rate discrepancies.
- Housing and residence within a politically stable society, economically developed, and steadily advancing towards the ranks of major countries.
- Residential real estate prices are increasing in value every year.
- The possibility of purchasing and owning real estate under construction in installments.
- Safety, security, and low crime rate in Dubai.
- The possibility of purchasing residential property online with digital currencies.
- Obtaining the advantages of real estate financing.
- Increasing demand for renting homes, thus generating excellent monthly income for the owner.
- The possibility of obtaining a residence visa in exchange for purchasing and owning real estate in the Emirates.
Entry visa to Dubai if you own a property
Expatriate investors can obtain an entry and residency visa in Dubai in exchange for owning real estate according to the following types:
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Residential real estate investment visa:
The duration of the visa ranges from 3 to 5 years, and can be maintained as long as the investor owns the property. A three-year residency visa is available when purchasing a property in Dubai worth more than one million dirhams, while the visa extends for five years when purchasing a property worth a minimum of five million dirhams.
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Visa by investing in a company:
The UAE government grants a residence visa to those who purchase shares in an existing company worth at least 72 thousand dirhams. Or those who want to establish a company with investment capital of the same amount.
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Long-term residence visa:
An expatriate investor obtains a 10-year long-term residence visa when purchasing a commercial property in Dubai worth AED 10 million. The investor is also granted a 5-year visa upon owning a property worth 5 million UAE dirhams or opening a personal project worth at least 500 thousand UAE dirhams.
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Retirement visa:
Investors over the age of 55 can obtain a 5-year residence visa in exchange for purchasing a property worth 2 million AED. Or when they have accumulated financial savings exceeding one million UAE dirhams, or have a monthly income of no less than 20 thousand UAE dirhams.
Does purchasing a property in Dubai grant residency?
Yes, purchasing a property in Dubai grants residency to the purchasing investor, especially to foreign expatriates desiring to start their own businesses, reside, and own property in the Emirates. Residency visas for expatriate investors have varied according to the UAE ownership law according to the following options:
- 6-month multiple residence visa: granted to every expatriate who purchases a property in Dubai worth more than one million UAE dirhams.
- Long-stay visa: Investors obtain it for a period of 5 years when owning real estate with a value exceeding 5 million UAE dirhams.
- Long-term residence visa: granted to the property owner in Dubai for a period of 10 years, especially for properties whose value exceeds 10 million UAE dirhams.
How to own an apartment in Dubai
Purchasing and owning a property in Dubai requires following the following practical steps:
- Preparing the sales agreement between the seller and the buyer: If you find the appropriate apartment for purchase, you must: Consult a specialized real estate agent to assist in communication and negotiation between the seller and the buyer.
- Signing the sale agreement if both parties to the property purchase process agree, which is known as the Memorandum of Understanding (Contract F) and is available online through the Dubai Land Department website under the Contracts tab. Once the contract is signed, the buyer must pay 10% of the property value to the seller.
- Submit a request to allow the transfer of ownership of the apartment or property to the new owner, known as a (no objection) certificate.
- Pay all fees required by the buyer to complete the purchase process, and thus obtain a no-objection certificate to complete the ownership documentation procedures.
How to purchase a property in installments in Dubai
It is possible to purchase a property in Dubai in installments by applying for a real estate loan with one of the UAE government or private banks, and completing a set of official papers and papers to ensure approval of the real estate financing application in installments, which are as follows:
- A copy of the Emirates Civil ID.
- A copy of the passport and residence visa of the expatriate buyer.
- A documented introductory statement of the client’s monthly salary or permanent income.
- Proof of the customer’s current address by submitting periodic electricity or water bills.
- Buyer’s bank statement for a period ranging from 3 to 6 months.
- Real estate sale agreement (Contract F).
- Title deed of the property that the customer desires to purchase.
- No objection certificate from the owner.
Benefits of investing in real estate
Investing in purchasing real estate in Dubai achieves the following positive benefits:
- The ability to build stocks and create increased financial wealth, as the value of the property is constantly rising due to changes in the real estate market.
- Real estate investment is reliable and long-term compared to the stock market, which witnesses frightening fluctuations up and down, carrying with it expected losses.
- Protection from financial inflation, as the value of real estate increases significantly when inflation occurs.
- Owners receive increased and guaranteed passive income for rental properties, especially in Dubai.
- Investing and purchasing real estate in Dubai provides ease in financing procedures and creating financial leverage.
- The taxes imposed on rented properties are reduced by a very acceptable percentage, compared to the rest of the taxes.
Is it advisable to purchase real estate in Dubai?
Yes, one of the distinguished options for investors is to purchase real estate in Dubai, due to its economic progress and the development of its infrastructure, which has placed it among the ranks of advanced global cities in the field of real estate investment. There is also a lower tax rate imposed on residential and commercial properties when owned or rented. In addition, the foreign investor obtains high rental returns and high profits when selling the property, he purchased at a lower price previously. In addition, the costs of purchasing real estate, ownership transfer fees, and other expenses are reduced, and are limited to an acceptable ratio for the buyer and seller.
Can a Syrian own property in Dubai?
Yes, it is possible for investors with Syrian Arab citizenship to own property in Dubai, according to the website of the official portal of the United Arab Emirates government on free ownership of real estate in the Emirates. It allows all people of various Arab and foreign nationalities, whether residing in Dubai or outside it, to enter the real estate investment market and buy and own any residential or commercial property, provided that it is within the freehold areas specified by the UAE government. By owning real estate in the Emirates, the foreign investor also obtains residence visas that are compatible with the financial value of the property.
Is real estate investment in Dubai successful?
Yes, real estate investment in Dubai is an extremely successful project. Especially at the present time, when the number of foreign investments has doubled significantly compared to previous years. Whether projects under construction or completed. This is due to the high demand witnessed in buying real estate in Dubai by investors who want to obtain continuous and reliable profitable financial returns in a fertile economic environment and distinguished legal and financial facilities for all people from different countries of the world. In addition to guaranteeing the investor’s financial rights through the increase in the value of the property despite global inflation or any potential financial crises.
Advantages of real estate under construction
Purchasing under-construction property in Dubai brings the following positive advantages:
- Various options at competitive prices compared to ready-made properties.
- Possibility of obtaining real estate financing from an Emirati bank to complete the cladding work.
- The possibility of an increase in the value of the property price during the completion of its construction.
- Possibility of modifying the building structure.
Disadvantages of real estate under construction
The disadvantages of purchasing under-construction properties in Dubai are as follows:
- Sometimes the buyer suffers from delay in completion of construction by the contractor and procrastination in delivery.
- Also not achieving all the features agreed upon between the buyer and contractor, especially if they are not registered within the sales contract.
- Real estate prices fluctuate and differ from one residential area to another.
- Higher taxes on newer building features.
- Increase in the cost of cladding as a result of fluctuations in the prices of materials available in local markets.
Advantages of purchasing completed or ready properties
The advantages of purchasing ready-made properties in Dubai include the following points:
- Diversity of ready-made real estate options, especially in freehold areas in Dubai.
- Fees and maintenance costs are acceptable and affordable.
- The foreign investor obtains a residence visa of varying duration when purchasing a property in Dubai, depending on its financial value. The higher the price of the property, the longer the length of stay.
- Obtaining stable monthly passive income and fairly high profitability returns.
- The possibility of selling the property at any time and benefiting from price differences.
Disadvantages of purchasing completed or ready properties
Disadvantages of purchasing completed or ready properties in Dubai include:
- Purchase prices for ready properties are higher compared to prices for properties under construction.
- Also request a down payment by real estate owners in Dubai for expatriate investors and deposit the advance amount in the UAE Bank.
- Delay in obtaining a real estate financing loan in time to complete the purchase of the property in installments, thus the failure of the project to obtain a property in Dubai.
Here we have reached the conclusion of our article, through which we learned about the advantages and disadvantages of purchasing a property in Dubai. We reviewed all the details that any Arab or foreign investor would like to know, to achieve his dream of residing and owning property in the leading emirate of Dubai, and to start investing and achieving high profits monthly without being exposed to any legal or financial problems or obstacles.
Resources:
- https://www.guestready.com/blog/buying-property-in-dubai/
- https://www.khaleejtimes.com/life-and-living/6-benefits-of-buying-property-in-dubai?_refresh=true
- https://www.saadarif.net/10-benefits-of-buying-property-in-dubai/
- https://u.ae/ar-ae/information-and-services/moving-to-the-uae/expatriates-buying-a-property-in-the-uae
