Global عربي
KSA عربي
Global عربي
The UAE's property prices are rising rapidly, and in 2024, Dubai's residential sale price jumped by nearly 20% and residential rent rose by 19%. Behind these trends lies a market that continues to attract worldwide attention.
The number of transactions involving residential properties in Dubai alone reached AED 522 billion in 2024, representing a 36% increase over the previous year. Meanwhile, property prices have risen by nearly 60% since 2022. For anyone living and working in the Emirates, the central question is whether it is better to rent or buy in 2025.
Rents have also surged, with prices at a historic peak, not only in Dubai but also in Abu Dhabi, which has forced many families to reconsider what it means to be a homeowner.
These figures are not market statistics for the millions of expatriates, who represent nearly 90% of the country's population. They determine how much of their salary to allocate to housing, and whether it makes sense to continue renting or buying a house.
This decision is not straightforward. Renting provides freedom and flexibility, allowing you to avoid tying up large deposits and keeping your cash liquid. It is suitable for those who are not sure how long they will stay.
However, it's also linked with increasing costs that erode savings on an incremental, year-after-year basis. The advantages of buying include avoiding annual property taxes, no capital gains tax, and rental yields that often range between 6% and 10%.
However, it has to pay upfront costs, service charges, and mortgage payments, which in popular communities like Downtown Dubai are often more expensive than rent.
These are trade-offs that expats make in this field. James, a British banker in Dubai, has seen his rent rise by almost 20% in the past couple of years and now wishes he had purchased when the prices were lower.
Priya, an Indian marketing executive who bought a small apartment in 2021, says it has appreciated, even as mortgage rates and service charges have made her less career flexible. Their experiences reflect a wider reality: Renting locks in mobility but will over time drain wealth whereas buying builds equity but locks expats to a market that can change quickly.
However, as soon as you are not in a luxury locality, the story changes. In other places, such as Al Reef in Abu Dhabi or Culture Village in Dubai, it is relatively affordable to buy. Some buyers in that area pay up to 38% less per month than renters in the same community. The contrast highlights why the rent-or-buy decision in 2025 is not a one-size-fits-all approach. That depends on each expat's neighborhood, profession, and plans.
This article highlights the one of the most crucial decisions for UAE expats is whether to rent or buy. It is not just about rent vs. mortgage comparisons. This is a decision that spans years and encompasses legal, visa, career, and even family planning considerations.
We will analyze expenses over a five to ten year period, examining the impact of interest rates, service charges, and capital gains, and closely look at the rules that govern what expats can and cannot do in the property market. This isn't to endorse one solution over the other, but it's at least to give you a sense of how renting offers more flexibility and buying more value.
Ultimately, you'll have a clear idea of which choice best suits your budget and your future in the UAE.
Read more about: Renting vs. Subletting in Dubai
When expats choose whether to rent or buy in the UAE, their decision is not based so much on the monthly expenses.
The legal regulation, visa concerns, lifestyle, and the length of your stay are crucial considerations.
Renting
- The process of renting in the UAE is straightforward, and expatriates are required to have a valid passport, Emirates ID, residence visa, and proof of income or employment.
- All tenancy contracts should be registered at Ejari in Dubai or Tawtheeq in Abu Dhabi, which ensures the rights of both the tenant and the landlord under the provisions of the local law.
- Most rental contracts are one year in length and require a notice period of at least 60 to 90 days to terminate the agreement.
Buying
- The purchase of property is restricted to specified areas in the country, where expats are permitted to buy property with unlimited rights.
- In Abu Dhabi, expats can also hold a freehold of a 99-year Musataha agreement, which grants 50-year renewable building rights or usufruct rights, providing long-term access to use the property without owning the land.
- The purchaser must register the sale with the Dubai Land Department or the Department of Municipalities and Transport in Abu Dhabi. They'll also have to consider fees such as registration fees (4% of the property value in Dubai), service charges, and bank mortgage fees if leveraged.
Renting
The process of renting a house in the UAE does not provide any advantage to having a visa, since residency is directly connected to a job or a business.
However, tenancy contracts are usually required to renew residence visas, as they provide official evidence of address.
Buying
The purchase of property presents the option of residency, which rentals do not allow.
An expat is considered eligible to live in Dubai on a renewable two-year visa, provided that the individual invests AED 750,000 or more.
Moreover, investors purchasing property worth AED 2 million and above are eligible to be granted the UAE Golden Visa, which grants 10-year residency without the need for a local sponsor.
The Golden Visa permits foreigners to live, work, and pursue education in the UAE, offering additional benefits, including the ability to sponsor family members and remain outside the country for extended periods without losing residency status.
Read more about: What Are The Types of Residency Visas in the UAE?
Renting
Renting offers expats flexibility, particularly for working professionals who may change jobs or relocate within the UAE or abroad.
It is easier to move between the neighborhoods, emirates, or even types of housing due to a change in circumstances.
This is a favorable option for professionals who frequently change employers or relocate.
Buying
Purchasing a house, on the other hand, will provide the feeling of permanence.
The owners have the freedom to customize and renovate their home, integrating it with the neighborhood, something that is not typically allowed in a rental house.
The downside is that you will be less able to respond quickly to changes, as the sale of a property is a time-consuming process, usually requiring an outlay of funds to secure a sale.
For short-term stays of between one to three years, renting is often preferred over buying, as it requires fewer immediate funds and avoids the risks associated with resale.
In cases of medium-term residence, lasting between three to five years, renting remains a more practical option. However, in some locations and with specific mortgage contracts, the cost of a mortgage loan may be more affordable than renting.
For long-term stays of five to ten years or more, buying may be more financially appealing, as property values increase and rent savings surpass the purchase price.
The ownership also brings a level of security, as property investments can support long-term residency through investor and Golden Visa schemes.
Read more about: UAE Golden Visa
- Buying upfront costs add up fast: A foreigner purchasing a primary residence is generally required to deposit 20% of the purchase price due to Central Bank regulations, which limit the amount of finance that can be obtained on purchases below AED 5 million at 80%.
- Transfer and registration fees are material: In Dubai, a transfer fee of 4% is payable to the Dubai Land Department, and a mortgage registration fee of 0.25% applies to mortgages.
- Other purchase costs are deal‑specific: You would need to budget for trustee/admin fees, a valuation in case you finance, and developer NOC charges where applicable. These will be displayed on DLD service pages within the transaction flow.
- Ownership brings recurring costs: There are annual service charges that owners are required to pay to the Owners Association, as well as maintenance charges, which vary by building and are published on the RERA Service Charge Index. This means there is no property tax to be paid periodically for homes.
- Renting keeps entry costs low: The estimated first-year expenditures include the security deposit, a market-dependent brokerage fee, Ejari registration in Dubai, and initial utilities. Ejari has a fee of AED 155, inclusive of the knowledge/ innovation fee.
- Renting in Dubai incurs a small but ongoing municipal charge: There is a minor, but persistent municipal rent charge in Dubai. The annual rent is subject to a 5% housing fee, which is included in your DEWA bill.
- Mortgage payments in the UAE often float with EIBOR: Most residential mortgages are quoted on an EIBOR plus margin basis, so payments rise or fall with EIBOR. The Central Bank publishes EIBOR, and local banks quote it in their mortgage spreadsheets.
- Higher rates tilt the math in favor of renting: As EIBOR increases, the portion of your monthly payment that goes towards interest becomes greater, reducing equity build-up and the break-even period compared to rent.
- Service charges compound quietly: It is a better idea to stay in buildings with high RERA‑approved service charges because they are going to maximize your annual carry even where your interest cost has reduced.
- There is no capital gains tax for individuals selling a home: Individuals who sell a home will not be charged a capital gains tax. There is no personal income tax, and the new corporate tax applies to business profits, not the individual sale of real estate. If you purchase on behalf of a company, consult a tax expert.
- Short or uncertain stay: You must have a reasonably clear idea that you will be staying in the UAE for more than three to four years, as the initial expenditure of purchasing will hardly amortize before you relocate.
- High-interest, high-service-charge buildings: When interest rates and service charges are high in your target building, the total cost of ownership may exceed rent for many years.
- You need mobility: If your employer has the right to relocate you or you are likely to change emirates, then the flexibility to lease often beats the friction of ownership.
- The prices are cooling off against rents in your segment: Recent readings on CBRE have indicated that rent growth is moderating from 2023 highs, which can ease the pressure to purchase now in some locales. Research the existing price information in the submarket in advance to inform your pricing strategy.
- You plan to stay five to ten years: You intend to stay for five to ten years. By averaging the 4% transfer fee, mortgage expenses, and interest charges, your internal rate of return over a long-term hold of the mortgage improves.
- You want to hedge rent inflation: Dubai real estate prices have escalated in 2023-2024, and their appreciation has slowed down, but property ownership keeps your housing expense fixed and increases your net worth as you pay the mortgage.
- You meet LTV rules and can fund the down payment: The 80% LTV limits with expats, up to AED 5 million, are favorable, so having a healthy deposit with a solid income provides the margin to navigate the rate cycle.
- Visa value matters to you: In Dubai, you may own property of a minimum of AED 750k to qualify as an investor resident or own property worth AED 2 million to obtain a 10-year Golden Visa with a 2-year duration. With this nonfinancial utility, nothing turns the balance.
- To buy in Dubai (cash or mortgage): Please bring your passport or Emirates ID if you are a resident. Ensure the seller obtains a developer's NOC, while the transfer should be made through a registered trustee's office. When purchasing with an agent, an authorized Power of Attorney must be provided. During its sale registration process, the DLD service page highlights the following items.
- If you take a mortgage: The bank will usually request your passport/ Emirates ID, residency visa where applicable, salary certificate, recent salary slips, 3 to 6 month's bank statements, property documents, and valuation of the property to be secured against. Check the list of lenders.
- To rent in Dubai: There is a tenancy agreement that you must sign and then register on Ejari. You will also need to provide the title deed copy of the landlord, your passport/Emirates ID, and the property's DEWA number. The registration of Ejari costs AED 155 alongside knowledge/innovation fees.
- To rent in Abu Dhabi: The tenancy contracts are registered with the Department of Municipalities and Transport, previously known as Tawtheeq. Fees and documents can be processed through the TAMM portal.
1- Can expats buy property in the UAE?
Expats can purchase property in both Dubai and Abu Dhabi, but only in the specified freehold areas.
According to Dubai's 2002 Freehold Law, foreigners can own land and buildings, such as Palm Jumeirah, Downtown Dubai, Dubai Marina, Business Bay, Meydan, Jumeirah Golf Estates, and Dubai Hills Estate. In Abu Dhabi,
expatriates can obtain ownership of apartments and villas through the concept of freehold ownership for a term of 99 years, Musataha ownership for 50 years that is renewable, and the concept of usufruct right, which grants expatriates the right to use the property for up to 99 years.
2- Are mortgages available for expats in Dubai or Abu Dhabi?
Yes, expat mortgages do exist and are common. Generally, UAE banks offer expats up to 80% financing, which depends on various factors, including salary, residence permit, and employment status.
Banks such as Emirates NBD offer home loans with competitive interest rates tied to EIBOR, provided the user meets the criteria, including a minimum salary of AED 15,000/month.
These include other banks, such as ADCB, Mashreq, HSBC, and FAB, which offer their own expat-based mortgage plans with the option to apply to non-residents as well.
3- What are the best areas in Dubai and Abu Dhabi for expat buyers?
In Dubai, other desired investment destinations with freehold areas include Downtown Dubai, Dubai Marina, JLT, Business Bay, Palm Jumeirah, Meydan Riviera, Dubai Hills Estate, and Dubai South,
all of which are equally attractive from both a lifestyle and strong investment perspective. In Abu Dhabi, foreigners prefer to settle in Yas Island due to its entertainment and schools, while Saadiyat Island is favored for its cultural prestige and luxury.
Al Reem Island and Al Reef are also popular choices, as they offer family-focused areas with lower prices. Al Raha Beach, Al Maryah Island, and Masdar City, in their turn, have both urban convenience and long-term benefits.
Disclamer:
This post is for educational purposes only, and does not constitute investment advice or a solicitation to take any financial action. It should not be relied upon when making investment or financing decisions.
