Buying a Property in Dubai – Cost, Mortgage, Payment Plans
The UAE is a haven for property investment, and the country is recording dramatic real estate sales every quarter. Buying a property in Dubai is a very transparent and easy process.
However, the decision-making involved in selecting the right property that meets the investor’s requirements is where the heavy lifting happens.
The real estate business ecosystem in Dubai is very structured, with a handful of leading developers taking the major share of completed and upcoming projects.
Property Purchase in Dubai – Real Estate Ecosystem
Also, there are many small developers, too, who have 3 to 4 buildings, especially in the residential areas of Dubai. The entry barrier to property purchase is eased due to several initiatives by the Dubai Government.
Additionally, the Dubai Land Department, through its association with the developers, banks, and other financial institutions, such as the mortgage houses have established an easy pathway to property purchase.
First-Time Home Buyer Program in Dubai – Highlights
The first-time home buyer program in Dubai is an initiative from the Dubai Land Department (DLD) and the Department of Economy and Tourism (DET). It is aimed at making home buying more accessible for the residents of the UAE.
Also, for urging the UAE residents who are considering settling for a fairly long time to move from renting to owning their dream home. The program offers exclusive incentives that are not available to general investors.
What is the First-Time Home Buyer Program in Dubai?
The first-time home buyer program is a government-driven initiative, along with the DLD and 13 leading developers in the UAE.
The objective is to ease the home-buying process and increase the home ownership rate among expats and nationals. It is a plan that is in line with the Dubai 2040 Urban Master Plan.
Eligibility for the First-Time Home Buyer Program
- The individual must have a valid UAE residence Visa and Emirates ID
- They must not own any Freehold residential property in Dubai.
- The property price must be under AED 5 million
- Individual must be 18 years or older.
Key Benefits for Investors of First-Time Home Buyer Program
Priority access to new launches – New launches from prime developers will sell out faster in Dubai. So, under the plan, they will have early access to new launches.
DLD Fee Waivers and Instalments – There is a fee waiver of 50% or 100% fee waiver on the DLD Fee, depending on the developer.
Lower Mortgage Interest Rates – Participating banks will offer tailored mortgage products with discounted interest rates for the first 1-3 years.
High Loan to Value (LTV) Ratio – The Centre bank allows favourable financial limits for first-time buyers.
Developer Discounts – select developers will offer discounts of 8 to 10% for first-time buyers.
Loan pre-qualification criteria – Monthly salary of AED 15,000 or above is qualified for pre-approval online. A few UAE banks will provide a home loan to individuals with a monthly salary of AED 10,000.
Property Purchase in Dubai, UAE– Options Available
There are multiple options available for purchasing a property in the UAE. The first-time home buyer plan is one option for investors who wish to enter the property market and secure a home for themselves.
However, if the investor already has a freehold property in Dubai, then they are not eligible for the first-time home buyer plan.
Here is the upfront cost for a property worth of AED 1.5 million in Dubai.
| Description | Standard Cost | Developer Discount (if Applicable) |
| Downpayment (20%) | AED 300,000 | 8-10% Discount by the developer |
| Dubai Land Department Fee (4%) | AED 60,000 | Waive Off by few developers -First time buyer discount |
| Agency Fee | AED 35,000 Approx. | AED 35,000 |
| Total Amount (in AED) | AED 395,000 | AED 185,000 [ @10% down payment] |
More residents in the UAE are shifting from renting to owning. Depending on the specific requirements of the property owners and the budget in their hands, they can choose the developers and units.
Types of Residential Units Available in Dubai, UAE
In the UAE, for the investor to get good rental returns, studios, 1-bedroom, 2-bedrooms are the most popular options. These are most in demand for rentals.
Then there are townhouses, 3-bedroom flats, and villas that cater to large families or families with kids and a maid, etc.
Also, there is a luxury category of villas, penthouses, and apartments near the waterfront, beaches, and islands such as Palm Jumeirah and Palm Jebel Ali. Similarly, there are community projects of top-rated developers such as Emaar, Dubai Holdings, Nakheel, etc.
So, the investor must purchase the right property that meets their investment goals. Is it for living with a large family peacefully, or is it for getting high rental returns?
Actual Cost of Purchasing a Property in Dubai
Depending on the chosen property unit, the registration and other fees will follow. There are upfront costs such as the Dubai land Registration Fee, Agency Fee, etc., that many home buyers often overlook. These fees cannot be financed through a mortgage.
In most cases in the UAE, a buyer must have about 25 to 30 per cent of the property value ready in cash. That will cover the downpayment, Dubai land registration expenses.
Payment Plans Available to Purchase a Property in Dubai, UAE
There are various payment plans available in Dubai to purchase a property of your desired requirements. Some developers have introduced customised payment plans, such as 1% plan, extended EMI tenures, developer discounts, etc.
So, for a property worth AED 1 million, the buyer might need roughly AED 250,000 to start comfortably. The upfront cost for the Dubai property market is still a barrier to entry despite a longer payment duration.
For younger buyers, the bank verification process is tedious. So, for them to secure mortgages, there are private players who provide mortgage solutions depending on their credit history.
Flexible Payment Plans
To ease the entry barrier, the developers are offering incentives and initiatives
The plans include:
- 60/40 or 70/30 during construction
- Post-handover plans – 20-40 per cent over 2-5 years.
- Reduced booking/down payments of 5-10 per cent
Also, there are many Rent-to-own options, depending on the developer’s track record and escrow protections.
The post-handover plans and extended payment plans for off-plan projects help the buyer to spread out their instalments and reduce the pressure of upfront costs.
More developers are recognizing the requirements of younger buyers. Then, tailor the payment plan accordingly. There are bank loan facilities and private mortgage providers who provide the required funds for the apartment or villa.
The rental yield, property demand, inflation, property purchase price appreciation, etc., will help younger buyers in the long run. They can sell the property after paying off the loan.
So, property investment is one of the best investments. It empowers the investors to earn significant rental returns, get capital appreciation, and have a place to live comfortably.
The 10-year Golden Visa with a property purchase of AED 2 Million and above is also a key highlight of the Dubai property market.
So, to know more about the pathway of obtaining a Golden Visa through Property Purchase, connect with our expert Business Consultants right away!