How much would it cost to buy a house in Dubai?


Owning a home is a dream of many. But what if you can own a home in one of the best cities in the world, Dubai, the city of gold. No, there’s no lie. Even foreigners can buy a house in the city. The country opened its door to foreign investments in real estate in 2002. The cost of buying a house in Dubai is relatively low compared to the other posh cities of the world. 

Despite that, what makes buying property in Dubai beneficial? Good rental yield. Even if you own a property in the city and do not plan to move into your new place. You can put it on rent and get good rental gains. Hence, the price of property in Dubai is worth the investment. 

In this article, get a hold of the cost of buying a house in Dubai and the factors that could fluctuate the prices in detail.  

Why You Should Own A Property In Dubai?

Why You Should Own A Property In Dubai

Dubai is a city with good conditions in every aspect of livelihood, including the houses. When you buy a property in the city, no matter what location it is, you will always get it in good condition. The city of Dubai is a well-known area for buying luxurious housing with favourable conditions. When it comes down to the price of property in Dubai, especially the luxurious units, it is quite an affordable one. The cost is relatively affordable to the luxurious housing choices in other popular cities of the globe. 

Affordability is just another factor for buying a house in Dubai. The major benefit of purchasing an abode is the wide range of properties and portfolios that the city offers. From beach front houses to villas and builder floors, one can look up to every kind of housing solution in Dubai. The city is among the most happening places in the world with a plethora of amenities. The major reasons that could benefit the investors by purchasing a house in Dubai are

  • Dubai Expo – The world Expo makes the top of the list. Being one of the major attractions, the event attracts around 25 million visitors from around 180 countries of the world. This calls for an opportunity for the property owner, as the visitors are always on the lookout property for rent in Dubai during the event. 
  • Booming Tourism Sector – the tourism industry is booming in the UAE. Even if your investment cost of buying a property in Dubai is high, you can recover it through increased tourism. The city is a destination for tourists as the city has many tourist locations in the country. Also, the rising number of hotels in the city indicates that the tourism sector is flourishing.
  • Excellent Returns On Investment – Don’t you wish for excellent returns on the investments made. The cost of buying a property in Dubai is affordable. At the same time, the real estate market is prospering with an increasing population. The property can fulfil the demand for rent by keeping up with the growing population 
  • Ideal Road And Transportation Connectivity – Dubai has one of the most well-connected roadways and transportation in the world. The authorities are well-aware of the fact that exceptional transportation with other infrastructure can boost the economy and real estate sector of the city.
  • No Property Yearly Tax – The properties in Dubai are free from the burden of the yearly tax. This makes the cost of buying property in Dubai worthwhile. The no tax yearly policy is applicable for both residential units and their commercial counterparts. This means that after buying a property, you will not be required to pay any tax corresponding to it.

What Is The Cost Of Buying A House In Dubai?

What Is The Cost Of Buying A House In Dubai_

There are a few costs associated with the cost of buying a house or property in Dubai. These different costs are listed below:

  • Upfront Fees For Buying A Property

The robust system of rules in Dubai is set to protect the interests of both buyers and sellers. In accordance with the rules, there are some upfront fees for purchasing a property in Dubai. The buyer needs to pay these upfront fees alongside the price of property in Dubai. The upfront fees are not a fixed amount. This fee depends upon the factors, such as the type of property, and the seller from whom the buyer purchases. The upfront fees’ breakdown for the type of property is mentioned below: 

Upfront Fees For Ready to Move Property – Buying a property in Dubai directly from the developer is sparing. To buy ready to move projects in Dubai, you need to pay the following fees to the Dubai Land Department (DLD):

  • DLD Fees : 4% of the property’s value.
  • Title Deed Issuance Fees : AED 520
  • DLD Admin Fees : AED 4,200

If you are buying a house in Dubai through a mortgage, a mortgage registration fee is an additional cost. But if the property is bought in full cash, then there is no mortgage registration fee applicable on the purchase. The price of buying a property in Dubai will increase if you have taken the assistance of a real estate broker. The broker can charge up to 2% along with all the fees mentioned above. 

Upfront Fees For Off-Plan Property – To buy an off-plan property in Dubai, you can contact the seller or developer of the property. No matter who you buy the property from, the 4% cost of buying a property in Dubai will be applicable, in both cases. The buyer will also need to pay an amount of AED 5,250 along with the 4% value for the issuance of Oqood Certificate. This is a mandatory certificate proving that the property is registered under the name of the buyer in RERA. To issue the certificate, the buyer must pay 25% of the property in advance. 

  • Initial Deposit

For both ready-to-move or off-plan properties, the mortgage price of property in Dubai needs to be paid by the buyer. This initial deposit secures the purchasing rights of the property in the name of the buyer. For the ready-to-move property market, the initial deposit is around 10% of the purchase price. This amount is payable to the seller in form of cheques. A RERA registered broker will collect this amount till the time the rights of property are transferred to the buyer.

  • Mortgage Fees

Fee For Bank Mortgage Arrangement 1% of the property’s loan amount + 5% VAT
Fee For Property Valuation  Between AED 2,500 to AED 3,500 + 5% VAT

The buyers who wish to cover the cost of buying property in Dubai by a mortgage or Home loan in Dubai, will need to pay the above-mentioned fee to the bank. Some banks in Dubai offer to add this fee to the upfront costs of the buyer’s mortgage. This eases the burden of the initial financial expenditure of the buyer.  

As a buyer, it is important that when a seller has a mortgage when purchasing a property, they need to pay the seller’s mortgage first. After the payment, the buyer will receive a No Objection Certificate (NOC). The NOC is an essential document for the transfer of rights with DLD. 

NOC is a document stating that the seller has paid all fees, including the service charge, and has no objection to the transfer of rights to the buyer.   

  • Service Fees

After the transfer of rights and successful transactions, an additional cost in form of service fees is also charged. As per the RERA Service Charge and Maintenance Index, buyers are required to pay an amount to the DLD for the annual maintenance of the property. 

The RERA Index determines the service fees as per the area of the house (per square feet) and the community of the property. The up-to-date fees information can be sourced from the official website of DLD. 

The service fees in addition to the cost of buying a property in Dubai go for the upkeep of common building/community areas, such as lifts, swimming pools, parks, security, water, etc.  

  • Insurance Fees

Home and Contents Insurance AED 1,000 Approximately
Life Insurance 0.4-0.8% per annum (approx.) on the decreasing loan balance

Home insurance is not considered an important part in Dubai. It is still recommended for property buyers. Home insurance provides protection against any damage or loss due to theft, natural occurrences, etc.

But if it is a mortgage, life insurance of the home is compulsory for the buyers. The payment for life insurance is an outgoing cost of owning a mortgaged home, which is factored in the price of property in the Dubai budget of the buyer. Usually, the banks will charge this separately from the loan, monthly. About 0.4% to 0.8% is charged by the banks on the basis of the decreasing mortgage. Choosing life insurance outside the bank can be economical for young home buyers. 

What To Consider For The Price Of Property In Dubai?

What To Consider For The Price Of Property In Dubai_

Another crucial point for home buyers in Dubai is to consider the extra expenses that come with the ownership. If you have planned a mortgage to cover the expenses, such as repair, and maintenance, you need to plan it out in advance. Delayed planning can lead to severe financial conditions.

To make the calculation work in your favour, you need to understand the basics of real estate. If you do not wish to find the optimal solution on your own, you can also take suggestions from professional consulting firms. 

For example, if you are a foreigner with the purchase price of the property in Dubai under AED 2 Million, then you are liable to get a resident visa of the country. A consulting firm will help you to obtain a resident visa with ease without your need to step into the procedure.    

Factors That Influence The Cost Of Buying Property In Dubai

The statistics have proved that the cost of property increases under a stable economy and vice versa. Since the cost of buying property in Dubai is not static, it is advisable to check the cost, annually. 

The Dubai real estate market is grabbing the attention of both locals and foreigners. But the price of property in  Dubai is not equal for all. Here are the factors that influence the property prices in Dubai:

  • The Economical Condition – Dubai has one of the most stable economies in the world, which makes buying a house affordable in the city. Though the price of property is higher, it is still affordable compared to other posh cities around the world. The stable economy of the city is the result of the financial stability of the citizens. Therefore, they can buy properties without any hassle in the city. 
  • Employment Status Of Buyer – If you are an unemployed individual, the city gives little to no power for purchasing a property. Being unemployed, there are uncertainties about the future, resulting in decreased demands for the property. This leads to a lower cost of buying a house in Dubai.    
  • Location Of The Property – The location is a major contributor in deciding the price of property in Dubai. Many areas are costlier than the others. Additionally, the availability of amenities, transportation, and other utility lines affects the price alongside the location of the property.  
  • Age And Physical Condition Of The Property – New homes in Dubai are costlier.  The old properties in the city might face some defects in the near future, such as waterlogged roofs, rusted pipelines and more. This adds to the cost for the buyers. But when you buy a new home, an examination contingency is assured by the seller. The buyers can negotiate the expenses so that they do not have to cater to big expenses after purchase. 
  • Upgrades And Updates Of The Property – Renovations, upgrades, and updates are additional costs to the actual value of the property. Kitchen and bathroom renovations are an absolute addition to the property’s value. Other upgrades, such as wall paints, furniture, and ceiling designs can also influence the price of property in Dubai.

Bottom Line

Dubai is a city with a range of properties, starting from cute and cosy 1-bedroom flats to beach front houses. The cost of buying a house in Dubai is comparatively lower than the luxury flats of other countries. But above all, it is important to understand and know the prices of a property before buying. This is the reason that one should consult with real estate experts before investing in one. The cost of buying a property in Dubai is meriting as it is one of the thriving cities around the globe. 

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Frequently Asked Questions (FAQs)

Is it expensive to buy a house in Dubai?

The price of a property in Dubai depends upon your choice. If you plan to buy a small home, then it is cheap as compared to big houses in posh localities. Also, buying luxury property in Dubai is affordable as compared to other luxury properties in the famous cities of the world.

How much does an average house cost in Dubai?

The average cost of a house in Dubai is $760,000. The pricing of houses in Dubai makes owning an abode affordable for everyone.

Can a foreigner buy a house in Dubai?

Foreigners can buy a house in Dubai in the designated areas known as freehold. Those who do not live in Dubai or do not have ownership can get the ownership of freehold properties without any restriction for up to 99 years.

Is it easy to buy a house in Dubai?

The process of buying a house in Dubai is straightforward and easy. The real estate market of Dubai opened its gate to foreigners in 2002 and since then many foreigners are purchasing housing units in Dubai.

How much does a flat in Dubai cost?

The cost of a flat in Dubai starts from $834 for a one bedroom flat outside the city centre. The cost of the flat will increase as per the size and area in which one is planning to buy.

Krittika Barua
Krittika Barua Organized, vocal and everything in between. Krittika is an editor at Square Yards, passionate about weaving words with simplicity. She’s a dog lover obsessed with Microsoft Excel. Donuts cheer her up.
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