The UAE real estate market is one of the most vibrant in the world. Recently, the number of transactions made in the UAE has increased 2.5 times compared to 5 years ago.
Many apartment complexes and villas are built in areas where foreigners are allowed to buy and sell. When investors buy real estate in the UAE, they can have an additional source of income and qualify for the UAE Golden Visa.
Let WinInvest answer questions and frequently asked questions about real estate investment in the UAE.
- Can foreigners buy real estate in the UAE?
Yes, foreigners are allowed to buy real estate in the UAE. However, there are certain location restrictions. Accordingly, foreigners can only buy real estate in certain places called freehold areas. Most of them are located in Dubai.
- Should you invest in real estate in the UAE?
Investing in real estate in the UAE is profitable as real estate prices are constantly increasing. In 2022, real estate prices increased 1.5 times compared to 10 years ago. Owners can rent out their properties without paying tax on the income received from the rental. Therefore, real estate in the UAE can be a source of passive income for investors.
- How much does a house cost on average in the UAE?
The price of a house in the UAE depends on the size of the house. On average, you can buy a villa for between $0.5 million and $1 million. Some of the cheapest areas in the UAE are Dubai South and Damac Hills 2 in the Emirate of Dubai.
- Do you get residency if you buy a house in Dubai?
You can get residency in the UAE if you buy a house in Dubai. There are two residency visa options: for 2 years and 10 years. The first is granted if the investor buys a property for AED 750,000 ($204,000) and the second is for investing AED 2 million ($545,000).
- What are the pros and cons of investing in real estate in Dubai?
The advantages of buying property in Dubai are as follows:
No property tax and no tax on rental income;
Continuous growth in property prices; the opportunity to rent out property and receive 5–8% income from it;
The opportunity to obtain a residence visa in the UAE.
The main disadvantage of buying an apartment in Dubai is that foreigners cannot buy it everywhere, but can only buy it in certain locations called freehold areas. However, there are about 50 freehold areas, which means that every investor can easily find a suitable location.
- Where can foreigners buy a house in Dubai?
Foreigners can buy property in freehold areas in Dubai. There are about 50 freehold areas. Damac Lagoon, Town Square and Tilal Al Ghaf are the most popular places to buy a house.
- Can Dubai Property Prices Fall?
No, in fact, Dubai property prices are rising. In April 2023, the Dubai property market saw a 33% drop in transactions and an 18.3% drop in sales values compared to the previous month. This is the first time since December 2022.
Market analysts and investors see this as a short-term fluctuation. Data for early May 2023 shows that the price increase returned as quickly as in Q1 2023.
By the end of 2023, the Dubai property market is expected to see unprecedented price growth and reach AED 300 billion ($81.7 billion). Despite rising property prices, luxury homes in Dubai are still more affordable than anywhere else in the world.
- Is it cheaper to rent or buy an apartment in Dubai?
It depends on your goals and financial situation. If you are not planning to stay in the UAE long term, renting may be cheaper as all you have to pay is rent.
The average rent for a 1-bedroom apartment in central Abu Dhabi is $1,444 per month, outside the centre it is $1,179. In Dubai, the same apartment in the city centre will cost around $2,004 per month.
If you are considering staying in the UAE long term and applying for the UAE Golden Visa, buying property may be a wiser option. To buy an apartment in Dubai, you will need $300,000-600,000. Buying a villa will cost between $500,000 and $1,000,000.
In addition to the property cost, the property owner also has to pay transfer fees, administrative fees, registration fees, and management fees to issue a certificate of ownership.
The purchased property can bring you a stable income if you decide to rent it out. The rental yield here is about 5-8%/year. In the UAE, property owners do not have to pay annual property tax or income tax, but they have to pay an annual maintenance fee of 15-60 USD/m2.
Above are 8 frequently asked questions about real estate investment in the UAE. Currently, many countries are implementing Golden Visa, Permanent Residency programs as well as Investment programs, second citizenship such as in Europe (Malta, Greece, Portugal, Cyprus…), the Caribbean region (Antigua and Barbuda, Saint Kitts and Nevis, Saint Lucia, Dominica, Grenada…), the United States, Canada, Australia… and many other countries. Possessing a passport from these countries allows you to travel freely to more than 150 countries around the world without a visa.
