Buying or Renting Property in Dubai: Which is Cheaper in 2023


In light of the economy, many are questioning whether renting or purchasing a home in Dubai would be more cost-effective in 2023. The choice might be challenging because of the variety of variables to consider, such as mortgage rates, property prices, and rental expenses.

This blog will help you weigh the benefits of renting and property for sale in Dubai in 2023 so that you can make an informed decision.

Factors to Consider: Renting vs Owning a Property in UAE

While selecting whether to buying or renting property in dubai, it’s crucial to take into account many factors, including:

  • Understanding the Current Market for Property in UAE

Understanding the Current Market for Property in UAE

Anyone looking to purchase a home in the United Arab Emirates is in luck. The residential real estate market in the UAE is gearing up for a promising future with a projected compound annual growth rate (CAGR) of over 8% in the forecast period of 2022-2027.

Although the COVID-19 pandemic has put a stop to the market’s growth, the UAE’s residential property prices are poised to soar in 2022, backed by a range of supportive economic reforms and an accelerated vaccination program. With a successful rebound from the pandemic-induced slowdown, the market is expected to show promising signs of recovery. Many individuals now see Dubai real estate investing as a viable alternative due to the price drops in several regions. whether you’re thinking of renting or buying a home in the UAE, it’s crucial to be aware of the local market’s prevalent circumstances and pricing trends. In this way, you may make a wise choice at the right time, given the current state of the market.

  • Financial Considerations for Renting or Owning Property in UAE

Financial Considerations for Renting or Owning Property in UAE

Renting vs. buying a home involves a lot more than simply weighing the initial outlay for each. The state of your finances is an important consideration. You need to do some self-examination about your financial situation to figure out what’s really possible. Rent is usually the largest out-of-pocket expenditure while living in rented quarters. You should figure out whether paying the rent won’t create too much of a dent in your budget. There are other charges to think about, such as security deposits, utility deposits, and relocation expenses.

Buying a home requires careful planning because of the initial investment, the monthly mortgage payment, and the continuing expenditures of maintenance, repairs, and insurance. You must compare these costs to your salary to decide whether home ownership is within your financial means.

  • Long-Term Plans: How Long Will You Stay in the UAE?

First, consider your short-term goals before making a long-term commitment to either renting or buying a house in the United Arab Emirates. If you anticipate staying in the UAE for at least five years, purchasing a home might be a wise investment.

Nonetheless, renting a house in the UAE is an excellent choice if you just want to remain for a few years or if you are unclear about your intentions. As compared to buying, renting a home in the UAE allows you more flexibility and independence. Typically, landlords require tenants to provide at least three months’ notice before they may move out, giving you some leeway if your plans change.

  • Liabilities While Renting or Buying Property in UAE

When it comes to renting or buying a property in the UAE, one of the key considerations is how much control you want to have over the property. owning a property gives you more control than renting does – you can make changes and modifications as you wish without needing permission from a landlord. However, tenants may require a No Objection Certificate (NOC) from their landlord for minor changes. 

Owning a property also comes with additional costs, such as an annual maintenance fee and service charges which must be paid. Furthermore, the extent of financial liability towards the property depends on whether it’s on a 99-year lease or on a freehold basis. on a freehold basis, all costs associated with owning and maintaining the property are the owner’s responsibility. In contrast, with a 99-year lease, these costs are shared between the owner and the government. 

  • Research and Find a Reliable Agent for UAE Property

Due to the volatile nature of the UAE real estate market, it is crucial to do thorough research before renting or purchasing a home there. Read as much as you can about Dubai real estate investments to familiarise yourself with the field and get insight into the state of the market as well as future projections. It’s crucial that you choose a reliable real estate agent to represent your interests. For first-time buyers, a reliable agent or brokerage business may be their only source of knowledge. Choose a reliable professional who specialises in the neighbourhood or the kind of home you’re interested in purchasing.

This is a huge financial choice, so homebuyers need to be sure they’re working with an agency and agent that have their best interests at heart. It’s also essential to understand the differences between leasing and purchasing a home in the United Arab Emirates before committing to either. With so many possibilities, it’s important to take your time researching them all and choose the one that’s ideal for you.

Crunching the Numbers: Renting vs Owning UAE Property

Crunching the Numbers Renting vs Owning UAE Property

If you’re debating whether to rent or own a property in the UAE, the math is straightforward. It’s cheaper to buy than to rent. A 2019 survey of one-bedroom apartments in Dubai Marina showed that the average price of purchasing a property was AED 1M while renting the same cost AED 66k per annum. let’s take a real example to demonstrate this further. For an AED 1M property, a buyer can expect to pay 4% upfront (AED 40,000) and around 8% annually in various costs, such as service charges, registration fees, and maintenance.

So over the course of 10 years, the total cost of ownership would be AED 1,160,000. Meanwhile, if the same property were rented over a 10-year period, it would cost an average of AED 660k. That’s AED 500k less than owning. The math is irrefutable; owning is far more economical in the UAE than renting. 

Expenses of Buying a One-Bedroom Apartment in Dubai Marina?

Expenses of Buying a One-Bedroom Apartment in Dubai MarinaExpenses of Buying a One-Bedroom Apartment in Dubai Marina

Let’s review renting vs buying this property in the UAE. This infographic compares both choices, breaking down the cost of owning it instead of renting over a five-year period: 

Required Payments

Associated Costs in AED

Down Payment (20%)


Dubai Land Department Fee (4%)


Real Estate Agent Fee (2%)


Property Valuation fee (varies)


Mortgage Registration Fee – 0.25% + 290


Property Registration Fee


Loan Establishment Fee (1%)*


Cost of Owning a One-Bedroom Apartment in Dubai Marina?

Buying a one-bed apartment in Dubai Marina over five years depends on the service charges set by the Real Estate Regulatory Authority (RERA). The average size of a one-bed apartment in Dubai Marina is 850 sq. ft. 

Required Payments     

   Associated Costs in AED

Mortgage Value (80%)


EMI – 25 years tenure at 3.24%


Total EMI over five years


Annual RERA service charge for five years*


Assuming an interest rate of 20%, buyers can expect to pay the following costs over a five-year period: 

    •  Year 1: AED 5,000
    •  Year 2: AED 6,000
    •  Year 3: AED 7,000
    •  Year 4: AED 8,000
    •  Year 5: AED 9,000 

This includes the registration fee, applicable taxes, and the property’s maintenance charges. It also covers the service charges payable to RERA for the term of the agreement. This amount is subject to change depending on the RERA rates, any additional fees associated with the property, and the prevailing market rates. 

Costs of Renting a One-Bedroom Apartment in Dubai Marina 

Here is how much you will pay in rent in five years: 

Required Payments

Associated Costs in AED

Annual Rent


Rent over five years


Real Estate Broker Fee (5% one-time fee)


Annual Ejari Registration Fee (AED 215 for five years)


The total cost you have to pay as rent in five years: AED 334,375

  • Down Payment: What You Need to Know for UAE Property Investment

Down Payment What You Need to Know for UAE Property Investment

The down payment is the initial payment made to purchase a property. In the United Arab Emirates (UAE), the minimum down payment for foreign investors and UAE nationals is 20% of the value of the property. personal loans cannot be used to finance down payments for property investments in the UAE. For more information on the different types of mortgages available in Dubai, it is advisable to read a guide on the types of mortgages in Dubai. 

  • Mortgage Repayments and EMI for UAE Property Investment

Mortgage repayments, or EMIs, are monthly instalments paid towards the rest of the property loan amount. These payments are made to the bank or financial institution that has given you a loan to purchase the property. the maximum mortgage allowed in the United Arab Emirates (UAE) is limited to 85% of the property’s worth. This indicates that a person may only borrow up to 85% of the value of a certain property. that’s why mortgage monthly payments (EMIs) consist of principal, interest, and a payment equal to 85% of the property’s value.

  • Additional Upfront Costs for Property Investment in UAE

Additional Upfront Costs for Property Investment in UAE

When looking to invest in property in the UAE, there are several upfront costs to consider. These costs can be up to 6-7% of the property price and can be financed through a personal loan if needed.

The upfront costs include the following: 

    • 2% Real Estate Agent Commission
    • 4% Dubai Land Department (DLD) Transfer Fee
    • 25% Mortgage Registration Fee
    • 4,000 AED Cost for Property Registration
    • 2,500 to 3,000 AED Property Evaluation Fee
    • Up to 1% Bank Mortgage Loan Origination Charge

In order to have a realistic idea of how much money you’ll need to purchase a home in the United Arab Emirates, it’s vital to account for these initial expenses. With careful planning and budgeting, you will be able to determine if buying or renting property in Dubai is the best choice for you.

  • Annual Maintenance Charges for Property Owners in UAE

When it comes to renting or owning property, one of the factors to consider is annual maintenance charges. In Dubai, landlords are required to pay yearly maintenance fees to the Dubai Land Department (DLD). the fees vary depending on the area and community in which you own your property, as the DLD’s fees requirements are based on the RERA Service Charge Index. Additionally, these fees vary across different emirates in the UAE. despite this, many people still find buying a home in the UAE appealing. Property owners enjoy stable rental yields, potential for capital appreciation, and the ability to save on monthly rent. 

Summing Up

Whether renting or buying is cheaper in Dubai in 2023 depends on individual circumstances, financial situation, and long-term goals. It’s essential to weigh both options’ pros and cons before deciding. by carefully considering factors such as upfront costs, ongoing expenses, and financial health, individuals can make an informed choice that suits their needs best.

More Useful Articles for you : 

All About Can Indian Buy Property in Dubai

How Can Indian Buy Property in Dubai

Guide To Dubai Land Department Service Charges

Dubai Land Department Service Charges

Tips For Buying off-Plan Property in Dubai

Buying off-plan Property in Dubai

Know About Buy Property in Dubai as a Foreigner

Buy Property in Dubai as a Foreigner

Frequently Asked Question (FAQs)

Is renting or buying better in Dubai?

Deciding to rent or buy a home in Dubai depends on personal circumstances and budget constraints.

Why do most people rent in Dubai?

Dubai residents usually prefer renting homes due to the high cost of purchasing. Buying requires a large initial investment and associated costs, discouraging potential buyers.

Will property prices fall in 2023 in Dubai?

Economic circumstances, government regulations, and global events are just a few variables that make future property values impossible to predict in Dubai or anywhere else.

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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