Prospects of investing in commercial real estate in Dubai

Acquiring property in the UAE may seem like a simple investment, especially against the backdrop of the absence of income tax. However, any deal in the Emirates is accompanied by mandatory financial expenses. The costs of buying real estate in Dubai include not only the payment for the property itself but also dozens of additional fees and duties. And if the buyer does not study the system in advance, the budget may unexpectedly increase by 8-10%.

For proper planning, it is worth analyzing the cost structure — from official payments to government agencies to hidden commissions and insurance. This is especially relevant for those considering long-term investments in Dubai real estate.

Mandatory fees and commissions

Any real estate transaction is accompanied by clearly defined expenses. They are regulated at the state level and do not depend on whether the property is purchased from a developer or on the secondary market. Let’s consider the parameters in more detail:

• registration fee — 4% of the property value, transferred to the Land Department;
• administrative fee — a fixed amount, usually around 580 dirhams;
• agent’s commission — 2% of the price;
• property ownership registration certificate — paid separately, around 250 dirhams;
• notarial support — depending on the company and the complexity of the transaction.

The listed expenses for purchasing property are mandatory. Their payment is necessary to complete the registration and obtain all rights to the property.

Mortgage and additional expenses when buying property in Dubai

If buying a property involves a bank loan, the list of expenses significantly expands. In addition to the main payment for the property, the buyer will need to take into account a number of additional costs associated with the financing process. For example, there is a mortgage fee, which is 0.25% of the total loan amount.

Additionally, banks require a mandatory property valuation, the cost of which can reach 3,500 dirhams. Property insurance also becomes a mandatory condition — its amount is calculated individually depending on the property characteristics and the insurance company’s terms.

Separately paid is the registration of the mortgage agreement at the Land Department, as well as legal and notarial costs associated with the transaction.

These measures ensure transparency of operations and compliance with all legal norms, which is especially important for banks. That is why an investor needs to clarify the loan structure and related obligations in advance, especially if they are a non-resident of the UAE.

However, buyers with confirmed income and a positive credit history can expect more favorable conditions from banks, including reduced rates and flexible repayment terms.

Indirect expenses when buying property and hidden costs of housing in Dubai

In addition to mandatory payments, there is a category of expenses that are rarely mentioned in developers’ brochures. However, they need to be taken into account when budgeting. Hidden expenses when buying property in Dubai include:

• DEWA account transfers (electricity and water);
• deposits for utilities — not always refundable;
• complex maintenance services;
• services of lawyers and translators;
• fee for issuing electronic access cards, parking, and services from the management company;
• property transfer tax — included in the registration fee, but sometimes specified separately in some contracts.

These payments can add several thousand dirhams to the final cost, especially if the property is located in the premium segment with developed infrastructure.

Documents to prepare in advance

To avoid delays and setbacks in the property acquisition process, it is recommended to prepare all the necessary documents in advance, which will not only expedite the process but also help avoid unnecessary expenses related to delays or additional commissions.

The mandatory documents include a valid passport — both a copy and the original will be required. It is also necessary to provide a preliminary agreement with the seller or developer, especially if the transaction is at the reservation stage. In the case of purchasing with a mortgage loan, the bank will require income confirmation.

For foreign citizens, a mandatory requirement is the presence of translated and notarized documents that comply with local legislation requirements. In addition, an application for registration with the Land Department is submitted before the start of the transaction, which directly affects the expenses when buying property in Dubai.

Even with the assistance of an agent, some documents will need to be filled out personally, and the correct completion of these documents directly affects the timing of obtaining the official property ownership certificate.

Property investment: what to know about housing formats

Different types of properties — studios, apartments, villas — entail different levels of expenses. For example, when purchasing a studio in a completed building, the expenses will be lower than when investing in a property under construction. The cost of annual maintenance also varies: for high-budget villas, it is higher than for regular apartments.

Investing in Dubai real estate is profitable if you choose a format with minimal operating costs in advance. This is especially important for those planning to rent out the property and generate a stable income.

Total expenses

On average, expenses when buying property range from 7 to 9% of the property value in Dubai. The main part consists of the registration fee and agent’s commission. With a mortgage, bank fees are added. Neglecting these items can lead to an increase in the budget and delays in processing.

Before proceeding with the transaction, it is advisable to create a budget — taking into account all payments, including mortgage fees, utility deposits, administrative fees, and legal services. This approach will help accurately understand the total cost of ownership.

Expenses when buying property in Dubai: conclusions

A full understanding of the cost structure when buying property in Dubai helps avoid unexpected expenses. Regardless of whether the transaction is made with personal funds or using a mortgage, the buyer faces mandatory commissions and fees. Every investor planning to invest in real estate must consider both direct and indirect expenses. Proper financial calculation is the key to a smooth transaction and effective asset ownership in one of the most stable markets in the Middle East.

Real estate is not just an asset, but a strategic resource. Especially when it comes to such a dynamic region as the Arab Federation. In a country where skyscrapers grow faster than in Europe, arranging a mortgage, investments in square meters can bring not only stable passive income, but also residency, access to the Persian Gulf market, and a stable currency.

Choosing which emirates of the UAE are worth investing in real estate is not an easy task. Different cities have different rhythms, prices, audiences, laws, and levels of development. Let’s figure out where to really look for opportunities.

Dubai: UAE’s Showcase and Magnet for Investors

It is impossible to talk about property without starting with the capital of luxury in the Middle East. It is not just a metropolis, but a brand, synonymous with speed and high standards. In this city of the UAE, rental properties are snapped up instantly, and property yields consistently remain at the top.

Investing in real estate in Dubai is interesting because it entitles you to obtain residency, especially if you invest in projects worth $204,000 and above. The sector ranges from studios on Palm Jumeirah to villas in District One.

Thanks to strong infrastructure, demand from expatriates and business clients, the main tourist center remains one of the best emirates in the UAE for real estate investments.

Abu Dhabi: Stability, Government Guarantees, and Smart Growth

If Dubai is a showcase, then Abu Dhabi is a reliable foundation. There are no rapid developments in construction here, but there is strategic development focused on long-term sustainability.

Real estate investments in Abu Dhabi are often associated with elite apartments or villas in areas where representatives of international companies, government structures, and diplomatic missions live. Prices are lower than in Dubai, but the profitability remains competitive.

For those looking to invest in a more predictable and conservative market, the capital offers a worthy alternative.

Ras Al Khaimah: Rising Giant with Affordable Prices

While major cities are overheated with attention, real estate investments in Ras Al Khaimah are becoming increasingly attractive. Everything is just beginning here: major developers are launching ambitious projects, property prices are still within reach, and the real estate market in the UAE is becoming a more promising direction for property investments.

The resort potential is huge—beaches, mountains, green areas. Plans include developing a tourist zone, yacht clubs, and new residential areas with infrastructure tailored to European tenants.

For investors looking to enter the market before it becomes hyped, it’s an excellent opportunity.

Ajman: Most Affordable Property and Minimal Entry

Among all the emirates of the UAE for real estate investments, Ajman offers the lowest entry threshold. A good option for those looking to enter the market with a small budget but with growth potential.

Prices for apartments and even villas here are significantly lower compared to Dubai or Abu Dhabi. There is rental demand, especially from industrial workers and expatriates looking for affordable housing.

Ajman is not suitable for those seeking luxury, but is ideal for creating passive income with limited initial capital.

Sharjah: Religious Center with Growing Business Activity

Sharjah is the only option where alcohol is completely prohibited, setting a certain lifestyle. But otherwise, the market is actively developing: new residential complexes, business clusters, IT centers.

The proximity to Dubai is a major advantage: many tenants live in Sharjah and work in the neighboring region, providing a stable income at a lower purchase cost.

For those seeking a balance between investments and affordability, it’s an interesting option.

Advantages of Investing in Real Estate in the Emirati State

If you are considering the emirates of the UAE for real estate investments, it is important to understand the advantages they offer. That’s why thousands of investors from around the world enter the market:

• absence of tax on rental income and capital gains;
• possibility of obtaining residency in the UAE through property purchase;
• stable rental demand in tourist and business areas;
• flexible purchase—possible without residency;
• developed off-plan market with installments and programs from developers.

These factors make the Arab Federation a versatile platform for private investors—from beginners to professionals.

What to Consider Before Buying?

Not all properties on the market are truly worth investing in, especially when it comes to foreign investments. When choosing assets for real estate investments in a jurisdiction like the emirates of the UAE, details are of paramount importance.

First and foremost, it is important to find out if the project provides full ownership rights for foreign investors. Some areas only allow long-term leasing, which can limit flexibility and reduce future profitability.

It is important to calculate in advance the annual maintenance costs: utilities, building maintenance, contributions to the management company—all affect the final profitability.

It also makes sense to analyze the average yield in the area over the past 12 months. Real numbers often differ from developer forecasts—and only market statistics can provide an objective picture.

Finally, do not forget about the risks. Legislative restrictions, changes in visa conditions, demand fluctuations, tax peculiarities—all should be considered before signing a contract.

Which Formats Are Most Commonly Chosen When Considering the Emirates of the UAE as a Real Estate Investment Destination?

Different cities offer different types of properties. Some have ultra-modern apartments, while others have secluded villas. Among the most popular formats are:

• residential complexes with rental apartments (suitable for long-term leasing);
• homes for personal use with resale rights;
• commercial real estate—for renting out to shops, offices, cafes;
• resort complexes with short-term rentals (in Dubai and Ras Al Khaimah).

Each option requires analysis and understanding of who you will be renting or reselling the property to.

Where Is It Most Profitable to Invest in Real Estate in the UAE: Conclusion

Investing in property in the Middle East is not just a trend, but a strategic decision. And if you choose the emirates of the UAE for real estate investments, focus not only on the region’s fame, but also on growth potential, personal goals, and market structure.

In 2025, investment opportunities in the emirate state are not limited to one city. On the contrary, diversification across cities can give you the maximum result—both passive income, stability, and flexibility.

The main thing is not to chase trends, but to act consciously and strategically!