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Should You Buy Property in Dubai, UAE – Weighing in the Pros and Cons

Should You Buy Property in Dubai, UAE – Weighing in the Pros and Cons

Dubai, being one of the most rapidly growing economies in the world has attracted thousands of expats over the years. Aspiring homeowners and property investors have always been keen on buying a property in Dubai due to its favorable return on investment (ROI) and feasible governmental policies. Although the real estate market took a sharp downturn during the pandemic, it was also quick to jump back on its feet during the first half of 2022. This factor goes on to show that investing in Dubai’s real estate market can be extremely profitable and rewarding in the long run.

Pros and cons of buying property in Dubai

Should You Buy Property in Dubai, UAE – Weighing in the Pros and Cons

In this article, we are outlining the benefits of buying a property in Dubai while also articulating some of the potential downsides that it may have.

Benefits of Investing in Dubai’s Real Estate:

  1. High Return on Investment (ROI):

When compared with some of the most famous business hubs of the world like Hong Kong, London, and New York, the return on investment for a property in Dubai is far greater. Depending upon where the property is located, you can expect a rental yield of 6–10%. This annual rate of return is also greater than all the other emirates of the UAE. Currently, neighborhoods like Downtown Dubai, Dubai Marina, and Jumeirah Village Circle are on the radar of property investors since these areas show promise and the property prices are increasing with each passing day.

  1. Golden Visa Opportunity:

If you invest 2 million AED in Dubai’s property market, you are eligible for a long-term residency visa known as Golden Visa. This visa allows you to stay and work in Dubai for up to 10 years without the need for an employer to act as your sponsor. This visa is also renewable which means that you can experience living in one of the most thriving metropolises of the world with a lot more stability than ever before.

  1. Relentless Growth and Development:

The home to one of the most famous architectural marvels like Palm Jumeirah and Burj Khalifa is constantly growing and getting better. Dubai attracts millions of tourists and foreign investors each year because of its rapidly developing economy and entertainment centers. With no plans of stopping any time soon, the government of Dubai has a number of development projects in the pipeline to make the city even better such as building new shopping malls and fresh road links. These projects, once completed, will result in capital appreciation and an increase in the market value of the real estate properties purchased.

  1. Tax-Free Income:

One of the most important reasons why Dubai keeps on attracting foreign talents inside its borders is its tax-free income. Being a property/home owner in Dubai means you don’t have to worry about paying property tax, income tax, or rental income tax. This is a really big advantage since most major cities of the world charge income tax on your rental income or demand you to pay property tax bringing your overall ROI down. Buying a property in Dubai automatically translates into keeping your hard-earned money in your own pocket and enjoying a high return on investment without paying a huge chunk of it to the government.

  1. High Standard of Living:

Dubai offers everything that you can ask for in a modern city. Soaring towers, state-of-the-art shopping malls, entertainment hubs, and the unmatched sense of security are just some of the reasons why you should choose Dubai to buy a property whether you want to buy a home for yourself or are an investor. It is one of the safest cities in the world with one of the lowest crime rates. With new smart solutions in place, you can report crimes anonymously and can expect action from the authorities in just a matter of seconds. The high standard of living in Dubai hooks you up for a better and smart tomorrow for yourself and for future generations.

Potential Downsides of Buying a Property in Dubai:

While we just explained the major reasons why you should consider buying a property in Dubai, the debate can’t be over without mentioning some of the risks that are associated with investing in Dubai’s real estate.

Following are some of the cons of buying a property in Dubai;

  1. Various Initial Costs:

Apart from the face value of the property that you are interested in buying, you also have to pay a number of other fees while purchasing a property in Dubai. This includes the Dubai Land Department (DLD) fee of 4%, a property registration fee of 2,000 AED to 4,000 AED, a mortgage registration fee, agency fees (like that of real estate agents and conveyance fees), and a property valuation fee. All these charges need to be paid and cleared upfront which can really be burdensome for property buyers with a tight budget.

  1. Investing in a low-in-demand Neighborhood/Developer:

Buying a property in a desirable area may cost you a little bit more but it is far better than investing in a neighborhood that is not highly preferable by renters or property buyers. Some of the neighborhoods of Dubai lack modern amenities and infrastructure and are therefore unable to bring you the capital appreciation or rental yield that you may have expected.

You also need to take into account the property developer that you are buying the property from. Some property developers like Damac, Emaar, Meeras, and Nakheel are favored over others which ultimately affects the price you are going to get for your property should you choose to sell it in the future.

  1. Property Scams:

This is a rare risk but is something that you may want to keep in mind if you are buying a property in Dubai. Some people have been prey to real estate scams from people posing as real estate agents and developers. Some people also have invested in projects that promised a myriad of amenities only to find out that those promises never materialized.

However, you can totally avoid such scams by performing thorough background checks and hiring competent lawyers to read the fine print and assist you in your property-buying journey.

The Takeaway:

Coming to the question of whether or not you should buy a property in Dubai. It is evident from the aforementioned points that the benefits of buying a property in Dubai far surpass the risks involved. Most of the risks are avoidable and the initial costs of buying the property can be covered in just a few years (with substantial returns, of course). Overall, Dubai is one of the few places where you can safely invest your money in the real estate market. However, the best way to go about it is to do extensive research and groundwork, hire and work with the best agents, and invest in properties that are futuristic and high in demand.

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