Guide to Investment Properties in Dubai: Tips, Trends & More

Pros of buying property in Dubai

The benefits of buying property in Dubai are numerous. 

A study by DXB Interact and Dubai Land Department (DLD) found that from the different kinds of real estate in Dubai (e.g. villas/apartments), apartments are the most popular option for buyers. In Q4 2023, 25,971 apartments were sold, 6,660 villas and 1,121 commercial properties. 

The high number of buyers signifies trust in Dubai’s property market and its many pros. Here are some benefits of buying property in Dubai.

1. High return on investment (ROI)

ROI is defined as the calculation of an investment’s monetary value versus its cost. So, is buying an apartment a good investment in Dubai? The answer is yes. Dubai’s ROI index has consistently been given a high score - with property rental yields amounting to 5% or higher. 

Prime areas such as Jumeirah Village Circle, Dubai Marina, or Downtown Dubai even manage to generate a rental yield as high as 7-8%. While properties in the premium locations of Dubai will cost more in terms of investment, their yields are considered higher than global trends. 

Data analysts have also observed that amongst various property types, 1B bedroom apartments in Dubai are some of the most popular properties; for both sales and rentals. However, with the changes to the RERA index and the possibility of higher rent prices, buyers are also looking into properties such as villas or 3-4 bedroom apartments. 

2. Availability of affordable off-plan property

An off-plan property is a home that is still in the construction phase - a blank canvas of sorts.

The popularity of off-plan properties in Dubai has increased due to factors such as the potential for high returns, affordability, desirable locations, and developer incentives. Such properties are often priced lower than finished properties, making them a great investment for those who don't need to move in or rent out the home immediately.

Off-plan properties have been strategically placed across various important neighborhoods in Dubai, allowing buyers to capitalize on future business, commercial, and residential hubs. As the property nears completion, its value should surpass that at which the owner bought it - making it a profitable investment. 

Popular off-plan property developers in Dubai include: 

• Emaar properties

• Damac properties

• Nakheel Properties

• Sobha Group

Popular off-plan communities in Dubai include: 

• Emaar South

• The Valley

• Damac Hills 2

• Downtown Dubai

• Business Bay

• Dubai Hills Estate

• Dubai Creek Harbour

• Jumeirah Village Circle

3. Availability of freehold areas

Freehold areas in Dubai give expats the opportunity to buy and own property in Dubai without a lease. This means that freehold property owners not only hold the rights for their property but the land their property is built on, for an unlimited period of time.

In Dubai, freehold areas are scattered across various districts to attract diverse investors. Here is a list of the freehold areas available in Dubai, which could make for a good investment: 

• Business Bay

• Discovery Gardens

• Downtown

• Dubai Festival City - (Badia Phase 1 & 2, Hillside & Marsa)

• Dubai Investment Park

• Dubai Marina

• Dubai Silicon Oasis

• Dubai Sport City

• Green Community DIP

• Greens

• IMPZ (Int. Media Product Zone)

• International City

• JBR (Jumeirah Beach Residence)

• JLT (Jumeirah Lake Towers)

• Old Town

• Palm Jumeirah

• Barsha Heights (Tecom)

• The Lakes

• The Views 

• Remraam

• Jumeirah Heights

• Green Community Motor City

• Arjan

• Wadi Al Safa 3 

• City Walk

• Dubai Culture Village

• Damac Hills

• Dubai Studio City 

• Legends

• Town Square

• Al Barari

• Arabian Ranches 1

• Falcon City

• Jumeirah Islands

• Meadows

• Springs

• The Villa (Dubailand)

• Emirates Hills

• Jumeirah Park

• Al Furjan

• Jebel Ali Village

• Jumeirah Golf Estate

• Mudon Project

• Arabian Ranches 2

• Dubai Sustainable City 

• Mira 

• Warsan Village

• Al Thanyah First

4. Consistent Development

Dubai’s development has come a long way over the years - and there are many more plans for the future. In 2024 itself, there are various ‘smart city’ and ‘happiness’ projects in the pipeline - from the restart of the much-anticipated Palm Jebel Ali project to new residential and commercial developments across the city. 

The introduction of the golden and silver visas has also drawn high-net-worth individuals to Dubai and even increased the expat population, encouraging people to establish long term roots in the emirate. Silver visas are being applied for by companies while many investors are opting for the golden visa. 

5. Dubai Property Visa

The Dubai Property Visa or the Investor Residence Application is one of the most significant benefits of buying property in Dubai.

This visa allows investors and buyers to apply for a two-year renewable residence permit upon the purchase of a property valued at or more than AED 750,000. Family members of the investor can be sponsored as well. 

According to the DLD, here are the documents required for the Dubai Property Visa:

• Passport copy 

• Title deed/e-certificate of the title deed

• A passport-sized photo 

• Health insurance 

• Emirates ID card (if applicable) 

• A copy of current residence/entry visa (if applicable) 

• A certificate of good conduct issued by the Emirate of Dubai addressed to the DLD

Visa applicants can either directly visit the Al Manara Center to apply for this visa or opt for third-party services such as the Federal Authority for Identity and Citizenship, the DHA, an insurance company, or the Dubai Police. 

There are several terms and conditions outlined for the investor, including:

• The minimum value they invest in a Dubai property must be AED 750,000. 

• If the property is mortgaged, an amount that is 50% of the property value must be paid to the bank with an NOC from bank authorities. 

• A married couple can share their investment in one property and the value must be AED 750,000 or higher. The couple will also have to provide a certified copy of their marriage contract. 

6. Technological advancements

Dubai is making its mark in the tech ecosystem and heavily investing in technology and information and communications technology-driven ventures. 

With initiatives such as the Dubai Economic Agenda, the city is set to become a global tech hub for companies by 2033. Dubai also holds the largest data center exosystem in the UAE, has the presence of organizations such as AWS and Microsoft in the form of operating data centers, and is set to adopt cloud technology which is projected to contribute approximately AED 665 billion towards the UAE’s economic value over the next decade. 

Dubai’s tech startup ecosystem is also thriving as it hosts 40% of the regional scaleups and 90% of those in the UAE. As the world becomes more and more digital, Dubai continues to align itself with a tech-savvy future. 

Cons of buying property in Dubai 

Just like the two sides of a coin, buying a property in Dubai may come with a certain set of challenges that potential buyers should be aware of. 

Here are certain difficulties an investor/buyer may face while buying real estate in Dubai. 

1. Market volatility

Real estate markets are cyclical, meaning they experience volatility - periods of growth and periods of contraction. While Dubai’s real estate market has experienced rapid growth over the years, it is not immune to global economic downturns, pandemics, or regional conflicts. 

However, investors and buyers should keep in mind that this is a risk in every city and that from a long-term perspective, the right property’s value will often rebound despite temporary dips or setbacks. 

2. Foreign Ownership Restrictions

Expats in Dubai can own both freehold and leasehold properties but must follow certain rules for property ownership as well. In general, expats across the UAE are allowed to invest and own properties. 

But in Dubai, expats can only own property in government-authorized areas which are usually free zones, private real estate projects, or tourist hubs. There may be conditions such as obtaining special permits or paying certain fees to be able to own property in Dubai. 

That being said, there are several areas across Dubai that have attractive and financially viable properties for expats to explore. 

3. Association fees and maintenance costs

Owners of a property in Dubai will be responsible for any ongoing or sudden costs that emerge. This includes maintenance fees, service charges for amenities in residential communities, etc. They will also likely be responsible for repair and renovation costs that emerge, even if they have a tenant. 

The service charges will be paid by the owner to the DLD and the maintenance charge is generally calculated using the RERA service and maintenance index, as per the square foot. The service charge amount varies from owner to owner depending on factors such as the kind of property (apartment/villa), location, property size, the amenities etc. 

In general, the fees and service charges can range anywhere between AED 3 per square foot to AED 30 per square foot. 

4. Limited control over property management

While freehold property owners in Dubai have complete control over their property, can make changes to it (within the legal guidelines), and can pass their property down to an heir. However, buyers who have leasehold properties will have limited control over property management. 

Leasehold property owners will be answerable to the land owner, may face restrictions such as what changes they can make or even having pets in the property.

5. Legal and regulatory risks

It is crucial for buyers/investors to understand the legal frameworks guiding Dubai’s real estate market before proceeding with any investment. The property laws in Dubai may differ from those in other countries and failure to follow the legal system may result in difficulties for the buyer; from accusations of fraud to property ownership disputes. 

Buyers must consult accredited legal professionals for help and approach reliable real estate agents who are aware of the city’s legal property frameworks. The most important part is ensuring that all papers must be in order, including the buyer’s NOC and title deed. 

Tips to invest in properties in Dubai 

After considering all the aforementioned factors, the question may still appear: is buying an apartment a good investment in Dubai? The answer remains yes - as long as the buyer proceeds with each step after careful consideration. 

Here are certain tips for selecting the right investment property in Dubai. 

• Define your purpose: Are you looking for quick returns in an investment property or willing to play the long game? Do you want to live in Dubai or just want an investment property? Having clarity for these questions will help you plan your finances, and determine your location and property selection - amongst other things. 

• Research thoroughly: Comprehensive research on the different property types, locations, costs, and Dubai’s real estate market will help you make an informed decision. Ask yourself whether you are willing to invest in an off-plan property or require a built property, a new one, or one that is being resold. 

• Stay informed: Like the real estate industry, market trends are subject to change and volatility. Keeping abreast of the latest trends and changes may be beneficial to you in the long run. 

• Finances: Finances will have the most key impact on your investment. It is important to assess your financial capacity, prepare for future and sudden costs, and set a long-term financial goal. In Dubai, there is a 4% transfer fee payable to the DLD upon any property purchase, along with initial investment costs, potential yields, service charges, and maintenance expenses.  

• Diversify your portfolio: The best way to minimize risks is to diversify your investments across different property types and locations. If you are able to, consider investing in diverse properties to balance your portfolio’s risk and return.

There are many benefits of investing in Dubai’s real estate. Even with the drawbacks, it can prove to be a great opportunity for potential buyers. 

After thoroughly considering aspects such as ROI, off-plan availability, freehold areas, and legal frameworks, a buyer can proceed with an informed decision and buy property in Dubai. Contact an expert in your area to know more.