While global markets have been shaken by economic crises, the Emirates has stood out for its stability and rising property values. Now, with the pandemic and other challenges behind us, demand continues to outstrip supply. Local residents find housing affordable – the cost amounts to three years of an average family’s income. Wealthy foreigners are also keen to invest. In 2023 alone, Dubai saw over 9,800 properties sold, with apartment prices rising by 18%. Let’s explore what attracts investors to this country of eternal summer and the benefits that UAE property ownership provides.
Top 6 benefits of buying property in the UAE
There are many reasons why investors are drawn to UAE real estate: from obtaining residency in a prosperous nation to the potential for business opportunities. The UAE government has recently made significant accommodations to attract more foreign investment. Below, we review the main advantages of buying an apartment in Dubai or an office space in the UAE.
High rental income
The UAE attracts many people for tourism, work, and business. This ensures a steady demand for rental housing and office space. Compared to rental yields in other countries, UAE real estate investments tend to break even more quickly. This is especially true for high-end areas where rental prices are considerably higher. On average, each property can bring an annual return of 5–8%.
A unique aspect that boosts profitability in this sector is that tenants cover a rental tax of 5% for residential properties and 10% for commercial properties.
Tax-free investments
Dubai imposes no annual property tax or capital gains tax. There are also no taxes on “excess square footage” or “luxury” status. Thus, purchasing villas or apartments here is more profitable than in many other countries. All fees are paid once at the time of purchase. Naturally, there are necessary expenses, such as utility bills and community maintenance fees. However, every dirham spent goes toward high-quality service, exceptional landscaping, well-kept streets, and attractive building facades.
Golden Visa eligibility
By investing AED 750,000, a foreigner can obtain a 3-year residency visa. For investments over AED 2 million, the Golden Visa is available. Previously limited to a 5-year term, the government has now extended this to 10 years, granting foreigners nearly the same rights as local residents. The Golden Visa allows holders to live, work, conduct business, and freely enter and exit the country. If desired, this visa can be renewed without additional property investments.
Regional safety
One major reason for the high demand for property in Dubai is the region’s exceptional safety. Crime and violence are virtually nonexistent. The reasons are: strict laws and rigorous enforcement, bolstered by modern technology such as surveillance cameras. Recent surveys show that 95% of residents feel secure, even at night.
In addition to low crime rates, the UAE has investor-protection policies to prevent fraud. Real estate transactions are conducted through a secure, closed service that requires experts such as real estate agents, notaries, and legal professionals. Furthermore, property ownership details are confidential, providing investors with additional peace of mind.
Geographic location and climate
The UAE is a country of eternal summer, with almost no rain and 300 sunny days a year. The sea remains warm, never dropping below 25°C (77°F). Located, Dubai is located along the Persian Gulf. It’s a strategic trading hub between Europe, Africa, and Asia. Its international airports connect to over 200 global destinations. The UAE boasts six airports in total. Each of them is known for remarkable architecture, visitor-friendly design, and high capacity.
Quality of life and business opportunities
Thanks to the government’s strategic development of world-class infrastructure, including modern roads and ports, the UAE is ideal not only for business but for high-quality living. Dubai offers everything for a vibrant life: stunning modern architecture, well-maintained properties, and abundant entertainment options. The city is home to elite residential complexes, schools, hospitals, shopping malls, and leisure facilities. Dubai is also famous for its luxurious resorts and fine dining.
Dubai’s cosmopolitan population includes a large number of expats from various countries. This diverse cultural landscape supports networking and international business connections. The Dubai government also invests heavily in technology and innovation, creating a favorable environment for digital startups. Dubai is aiming to position itself as a global tech hub, which attracts tech parks and IT companies.
How to buy property in the UAE
The process of purchasing property can take several weeks, as the property needs to be selected and verified. It’s essential to work with lawyers and real estate agents to ensure a “clean” transaction by verifying all documents and drafting contracts correctly.
Here’s a brief list of steps for buying property in the UAE:
- Choosing the propertyи. First, determine the type of property (residential or commercial), the area, and your budget. You can ask a realtor to search for options.
- Verifying the seller. Make sure the seller or developer has all the necessary licenses and permits. Since documentation is handled in both Arabic and English, it’s best to have a qualified lawyer fluent in these languages oversee this step.
- Signing the agreement. Next, a preliminary agreement is signed with the seller, outlining all transaction terms and property details. This includes address, area, price, payment terms, and expected completion date if under construction.
- Paying a deposit. A deposit is usually required (5-10% of the property’s price).
- Registering the deal. You can notarize the agreement remotely with a notary.
- Payment and transfer of ownership. After full payment, the buyer can register the property in their name with the Dubai Land Department.
Risks and drawbacks
Understanding the terms of buying property in the UAE is crucial for foreign investors. Before proceeding with a transaction, it’s recommended to study local laws or seek professional legal advice.
Key risks to consider include:
- Reliability of the developer. For off-plan properties, there’s a risk that the developer may delay the project or even face bankruptcy.
- Legal documentation. If documents aren’t fully verified or the transaction isn’t registered through official channels, there could be ownership issues.
- Market prices. A property with an unusually low price should raise concerns. Market fluctuations can affect rental income potential, especially if the property’s location isn’t highly sought after.
- Contract terms. Misunderstanding the contract terms can lead to financial loss. There are several types of property ownership in the UAE. Generally, purchases mean long-term leases of 50-100 years. Full ownership is allowed only in designated areas, mainly in Dubai and Abu Dhabi.
- Legality of cryptocurrency payments. Some investors may be interested in using cryptocurrency. Moreover, Dubai allows such transactions. Be aware of the risks to consider when buying a property with cryptocurrency.
- Reliability of brokerage services. Real estate transactions must involve licensed real estate agents under UAE law. Brokerages vary in approach; some may rush to close deals, while others build long-term relationships with clients. You can assess this by scheduling a consultation and asking direct questions.
It’s also essential to anticipate unexpected costs. Commissions, maintenance fees, and other charges might exceed initial estimates. To avoid surprises, budget an additional 6-8% on top of the property price for these expenses.
Is buying property in the UAE worth it?
Given the information above, the question might seem rhetorical. However, despite the promising opportunities and attractive offers, it’s important not to rush. After all, risks do exist. Fortunately, when it comes to how to safely buy property in the UAE, there is a simple answer: find professionals.
It’s important that these experts are competent in the following areas:
- they can select the right property and assess its liquidity;
- they are fluent in the relevant languages, familiar with local laws, and can advise on market prices and the popularity of various regions;
- they assist with thoroughly checking all documents and drafting contracts correctly to prevent any future ownership issues;
- they ensure the legality and security of the transaction, including when paying with cryptocurrency;
- they provide remote notary services for document verification, saving clients time and money, especially since this is technically feasible.
Ideally, these experts would offer a comprehensive, “turnkey” service, sparing you the hassle of finding different specialists separately. The good news is that Dynasty Business Adviser – our Company – provides just that.
Our specialists have the necessary experience and expertise in real estate transactions. But most importantly, we focus on ensuring our clients receive exactly what suits their needs. This approach lays the foundation for potential long-term relationships with us – legal and consulting services may be required by any foreign investor in the UAE more than once.
