There might be no place on earth more synonymous with luxury living and opulence than Dubai. Many of the world’s wealthiest are moving to Dubai permanently or at least making investments there in the form of property. It’s a good place to park your money in real estate, considering the international appeal this cosmopolitan locale has.
If you’re not planning just to invest in Dubai, but you’re going to be moving there, you may be wondering whether it’s wiser to rent or buy. There are luxury garden villas and homes, apartments in some of the most amenity-filled buildings in the world and there are of course sprawling mansions.
The following are things to keep in mind as far as whether it’s a better decision to rent or buy in Dubai as an expat.
How Long Will You Be Staying?
One of the biggest things to factor into your decision as to whether to rent or buy in Dubai is how long you plan to stay. There are significant upfront costs that come with purchasing property in Dubai.
Namely, the mortgage downpayment is usually 25 percent of the price of the home, if it’s the first home you’re buying in the city. You’ll also have to pay a Dubai Land Development fee, broker’s commission, and other administrative fees. While 25 percent is the baseline, you often have to pay as much as 35 percent as a down payment, so keep that in mind.
If you’re looking at your property in terms of being an investment, you will need to live in Dubai for a certain number of years to see a return on your investment that will allow you to recoup those costs.
If you’re not sure how long you’ll be staying, there’s something called fractional ownership in Dubai. This allows you to invest in property through real estate crowdfunding, but this isn’t the right approach for a lot of people.
Something to note about Dubai is the fact that there tend to be more renters than buyers because many expat employees are offered corporate housing allowances. Almost 90 percent of the city’s residents are noncitizens, and they often have short-term employment-based visas, making renting the only viable option.
How Much Flexibility Do You Want?
If you’re someone who values a sense of privacy, flexibility, and autonomy, you may need to buy. When you buy, you have the option to change your home and your garden and landscaping in any way you see fit.
Also, a with buying property anywhere in the world you are putting equity into your home every time you make a mortgage payment.
However, while Dubai is one of the world’s hottest cities, there are a lot of fluctuations and ups and downs in the real estate market, so are you ready to stomach that if you make a purchase?
Can You Get a Good Deal?
While Dubai is known for having a high cost of living, there may be opportunities to get a good deal on a home, which could make buying more appealing than renting right now. For example, with the price of oil low right now, there are some real estate deals to be found in the city. There’s also a huge explosion of development, increasing inventory which can also impact prices in favor of the buyer.
What Are the Apartments Like?
While many high-end buyers look for villas and single-family homes, another luxury option is to choose an apartment, whether you’re buying or renting. Apartments have advantages over single-family homes including the fact that they’re often in the most desirable areas of the city, they’re low-maintenance, and they have great amenities.
The city’s high-end apartments tend to be in one of three areas. There’s the business district, which is called the Dubai International Financial Center. Here you can expect to pay an average monthly rent of around $4,000. There are also high-rise properties located near the Burj Khalifa and Dubai Mall. These apartments are often the most luxurious and expensive in the city.
Once you get to the southern end of the city, you’ll find Dubai Marina, also one of the most luxurious areas of the city for renters.
Ultimately if you’re not overly concerned about the down payment, the biggest deciding factors when it comes to whether to rent or buy in Dubai are typically how long you plan to stay, and how much maintenance you’re willing to do and pay for. If you want something short-term and flexible, it’s almost always going to make more sense to rent in Dubai.