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Why are properties cheap in Dubai?

With its iconic skyscrapers, luxury hotels, and man-made islands, Dubai seems like an expensive place to buy property. However, real estate prices in Dubai have significantly dropped over the past decade, making it surprisingly affordable for foreign investors.

Why are properties cheap in Dubai?

Factors driving down Dubai property prices

Several interconnecting factors have contributed to falling real estate values in Dubai:

Oversupply of new housing units

    Dubai went through a massive construction boom in the 2000s, building far more housing than demand justified

    This oversupply has pushed prices down substantially across all property types

Global economic factors

    The 2008 global financial crisis severely impacted Dubai’s economy, dependent on foreign investment

    Low oil prices since 2014 have also reduced wealth in Dubai and the Gulf region

Strengthening of the US dollar

    The US dollar has strengthened significantly against global currencies since 2014

    Since Dubai’s currency is pegged to the dollar, property valued in foreign currencies became cheaper

Reduced investor interest

    High volatility in Dubai’s housing market and changing tenant laws have made investors more cautious

    Many now prefer more stable markets like London and New York City

Impact of Expo 2020 postponement

    Dubai property values were rising in anticipation of Expo 2020, then dropped again due to its COVID-related one-year postponement

Current Dubai property price trends

While the factors above pushed prices down substantially from 2008-2016, the market has shown some stabilization recently:

    Rents stopped falling in 2018 and have risen slightly in desirable areas

    Sale prices remain 30-50% below 2014 peaks but dropped only 2% last year

    More realistic construction pipelines will prevent future oversupply

    The eventual Expo 2020 opening may lift prices if visitor numbers meet targets

So while you won’t see the rapid price growth of the early 2000s, Dubai real estate offers good value for money right now.

Where to find affordable properties in Dubai

You can find relatively cheap properties for sale or rent across most of Dubai, but some key areas to focus your search include:


    Discovery Gardens – Popular with budget-conscious expat families

    International City – Caters to middle-income tenant pool

    Jumeirah Village – Newer mixed-use complexes, 30-40% below peak prices


    Arabian Ranches – Family-friendly community with spacious villas

    Damac Hills – Branded properties with payment plans to ease entry

    Town Square – Easy access to Dubai via Al Qudra Road

Buying process overview for foreigners

While buying property as a foreigner in Dubai is relatively straightforward, it helps to understand the key steps:

    Find an appropriate property and research market value

    Make an offer directly or via a real estate agent

    Sign sales agreement including payment terms

    Apply for mortgage from local Dubai banks if required

    Transfer funds & registration via authorized money exchange centers

    Final ownership registration with Dubai Land Department

The whole process usually takes 2-4 weeks with good legal and financial planning. We cover more details in the sections below.

Costs to buy an apartment in Dubai

While specific costs can vary greatly based on property size, type, and location, a rough estimate of upfront and ongoing costs for a basic apartment purchase in Dubai would be:

Upfront costs

    Purchase price

        Studios from 600,000 AED ($163,000)

        1-bed from 900,000 AED ($245,000)

    Registration fees = 4% of purchase price

    Legal charges = 10,000 – 20,000 AED ($2,700-$5,500)

Ongoing annual costs

    Owner association fees = 25 AED/sqft ($7/sqft)

    Property taxes = 5% of annual rent value

    Utilities (housing fee scheme) = 2,000 AED ($545)

    Insurance/maintenance = 1-2% property value

So a small 500 sqft studio in Dubai bought for the average price would cost around $170,000 upfront and $8,000 per year including taxes, fees, bills. Larger multi-bedroom units have proportionally higher costs.

Costs to rent an apartment in Dubai

Rents vary across Dubai based on factors like location, size, agent fees, amenities, and length of lease. But typical ranges are:

Studio – 25,000 to 45,000 AED ($6,800-$12,300) per year

1-Bedroom – 45,000 – 80,000 AED  ($12,300-$22,000) per year

2-Bedroom – 60,000 – 110,000 AED ($16,400-$30,000) per year

Other common Dubai rent costs to budget for:

    Security deposit = 5-10% of annual rent

    Agent/broker fees = 5% of annual rent

    Utilities = excluding housing fee units

    Municipality tax = 5% of annual rent

So for example, a 500 sqft studio could cost 30,000 AED ($8,200) per year plus 5,000 AED ($1,400) in additional costs. More spacious units cost proportionally more.

Mortgages for foreigners in Dubai

Getting a home loan in Dubai as a foreign resident is relatively straightforward if you meet eligibility criteria:

Mortgage requirements

    Minimum 25% down payment

    Debt-to-income ratio below 50%

    Steady Dubai residency visa

    Monthly income > loan repayment amount

    Bank statements showing regular income


    Fast processing and low rate starting ~2.5%

    Available for off-plan purchases before completion

    Up to 80% of property value financed

Popular lenders

    Major UAE banks like Emirates NBD, ADCB, Mashreq

    International banks such as HSBC, SC

    Islamic finance through banks like DIB, CBD

Speak to an independent mortgage advisor to explore options matching your financial profile.

Reasons why Dubai property is still attractive

Despite price drops over the past decade, investing in Dubai real estate can still be attractive, especially for expat residents. Benefits include:

Strengthening economy – The UAE is recovering strongly post-COVID with Dubai’s 2040 vision supporting continued economic growth

Expo and tourism rebound – Billions invested for Expo 2020. Pent-up travel demand will drive tourism higher

Infrastructure expansion – Ongoing improvements supporting population and business growth

No income tax – Unlike most countries, the UAE/Dubai has no taxes on income, rental earnings or capital gains

Yields of 5-8% plus capital gains – Attractive returns for investors compared to many markets globally

So for buyers with a long-term perspective, Dubai property remains appealing.

Key takeaways

    Dubai real estate prices fell 30-50% from peaks due to oversupply and weak demand

    However apartments still start from ~$165k and villas from ~$550k

    Rents for studios start from $700/month or $8,400 annually

    Mortgages available for foreigners at competitive rates from 2.5%

    Future economic and tourism growth should bring some price stability

So while the spectacular pre-2008 price growth is unlikely to recur, Dubai offers good value today for first home buyers as well as real estate investors.

In conclusion, Dubai remains an attractive property market for foreign investors despite falling prices over the past decade. For buyers looking for affordable properties with strong rental yields plus future capital gains, areas like Dubai Sports City, Dubailand, Discovery Gardens, and Jumeirah Village offer excellent value. With its tax-free environment, booming economy, and reputation as the Middle East’s leading business hub, long-term prospects for the Dubai property market remain promising. Do your own careful due diligence before choosing where to purchase.


Q: How much are one-bedroom apartments in Dubai?
A: One-bedroom apartments in Dubai typically range from 900,000 AED to 1.6 million AED ($245,000 to $435,000) depending on the development, location, size, and amenities.

Q: Can foreigners easily get mortgages in Dubai?
A: Yes, many local and international banks offer mortgages for foreigners in Dubai with 25% down payment, proof of income, Dubai residence visa, and good credit.

Q: Do property prices in Dubai keep dropping?
A: While there have been major price drops of 30-50% in the past decade, prices have stabilized more recently and may start rising again with the Dubai economy improving post-pandemic.

Q: How much is a villa in Dubai?
A: In communities popular with expat families like Arabian Ranches or Damac Hills, villas start from around 2 million AED ($550,000). Larger villas with 5+ bedrooms can cost 5 million AED ($1.4 million) or more.

Q: Are there any taxes on Dubai property for foreigners?
A: No, the Dubai government does not impose income tax, capital gains tax or taxes on property transactions or rental income for foreign investors.

Q: What is annual yield on Dubai property investments?
A: Popular areas for expat rentals like Downtown, Marina, and Palm Jumeirah see average rental yields of 5-8% currently. But yields have been higher in the past during periods of peak rents.

Q: Can I get long-term residence visa by buying property in Dubai?
A: Yes, investing in Dubai property worth over 1 million AED allows you to obtain a 3-year renewable residence visa including for your family.

Q: Will property prices go up in Dubai due to Expo 2020?
A: While Expo 2020 was expected to lift demand, its postponement slowed price growth. But the eventual opening should bring stability or moderate gains over the next few years.

Q: What are the best locations to buy affordable properties in Dubai?
A: Top areas for value buying include Discovery Gardens, Dubailand, International City, Sports City, and Jumeirah Village where prices are 30-50% below 2014 peaks.

Q: Is it easy for foreigners to buy and sell property in Dubai?
A: Yes, the Dubai Land Department has standardized procedures allowing foreigners to easily purchase and register properties plus arrange mortgages within 2-4 weeks.

Q: Where do most expats live in Dubai?
A: Many Dubai expats choose communities like Downtown, Marina, JLT, Discovery Gardens, and Greens which cater well to expat lifestyles and family needs.

Q: Can I buy an off-plan property in Dubai as a foreigner?
A: Yes, buying pre-construction or “off-plan” homes in new Dubai developments is common for foreigners seeking good prices plus payment plans over construction timelines.

Q: How much deposit do I need to buy a property in Dubai?
A: With a Dubai mortgage, you’ll need at least 25-30% of the property value as a down payment. Without financing, some developers allow 10% or less deposit on off-plan purchases.

Q: Should I rent or buy property in Dubai?
A: Renting makes sense for short-term residents, while buying can be better if staying 5+ years. Buyers can target capital gains plus benefit from no taxes on future sales.

Q: Is the property market crashing in Dubai?
A: While prices dropped sharply after 2008, markets have stabilized now. Strong economic fundamentals support Dubai’s long-term growth, making major crashes unlikely.

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