Dubai Real Estate: Top 5 Myths Debunked

There are several perceptions surrounding the Dubai real estate market among global investors, and while a few are based on real trends, many stem from misconceptions that can mislead buyers and sellers. The market’s complexity is shaped by factors such as shifts in oil prices, global economic movements, population growth, and forward-thinking government initiatives aimed at long-term stability. To make informed investment decisions, it is essential to separate fact from myth and understand the core fundamentals that consistently drive this market’s performance.

This article aims to dissect and debunk ten of the most prevalent myths surrounding Dubai's property market. By providing a technical and evidence-based perspective, we will clarify common misunderstandings and offer a more accurate picture for those looking to engage with this vibrant sector.

What Are the Most Common Real Estate Myths in Dubai?

Myth 1: Only the Ultra-Wealthy Can Afford Property in Dubai

This is one of the most persistent myths about the Dubai Real Estate market . While the city is famous for its opulent villas and penthouses, it also offers a wide range of affordable housing options. But the reality is that the Dubai property market is diverse, catering to various budget levels. Areas like Dubai Silicon Oasis, International City, and DAMAC Hills 2 feature apartments and townhouses at competitive prices, making property ownership accessible to a broader audience. Furthermore, developers frequently offer flexible payment plans, and banks provide mortgage options that make entering the market feasible for first-time buyers and those with moderate incomes.

Myth 2: Off-Plan Properties Are Too Risky

Investing in off-plan properties, purchased directly from a developer before construction is complete, is often perceived as a high-risk venture. Concerns typically revolve around project delays, changes in final specifications, or, in the worst-case scenario, project cancellation. But the truth is Real Estate Regulatory Agency (RERA) has implemented strict regulations to protect off-plan buyers. Developers are required to register all off-plan projects with the DLD and place all funds from buyers into a mandated escrow account. These funds are only released to the developer in line with construction milestones. This ensures that the buyer's investment is protected and used specifically for the project's development, significantly mitigating the risks associated with off-plan purchases.

Myth 3: Foreigners Cannot Own Property in Dubai

This is an outdated belief. Since 2002, Dubai has permitted foreign nationals to purchase property in designated "freehold" areas. These zones include prime locations like Dubai Marina, Downtown Dubai, and Palm Jumeirah. This policy was a pivotal move that opened the market to international investment, contributing significantly to its growth and diversification. Foreigners are granted full ownership rights to their property within these areas.

Myth 4: Rental Yields Are Declining Across the Board

Some investors worry that a growing supply of new properties is driving down rental yields, making Dubai a less attractive option for buy-to-let investments. While rental yields can vary depending on the property type and location, Dubai continues to offer some of the most competitive rental returns globally. On average, investors can expect gross rental yields ranging from 5% to 8%, which is significantly higher than in other major property hubs like London, New York, or Hong Kong. High-demand areas, particularly those with strong infrastructure and amenities, consistently deliver robust returns for investors. This is before we mention other asset classes and short lets, which tend to offer more attractive yields.

Myth 5: There Are No Taxes on Real Estate

Dubai's reputation as a low-tax jurisdiction often leads to the mistaken belief that real estate transactions are entirely tax-free. While the emirate does not levy income or capital gains taxes, property-related transactions are not exempt from fees. When purchasing a property, buyers are required to pay a Dubai Land Department (DLD) transfer fee, which is currently 4% of the property's value. Additionally, there are registration fees and, if a mortgage is involved, a mortgage registration fee. Property owners are also subject to annual service charges to cover the maintenance and management of common areas in their building or community. Understanding these associated costs is essential for accurately calculating your total investment.

Leverage Local Knowledge for Smarter Dubai Property Investments

By debunking these myths, investors can approach opportunities with realistic expectations. For guidance from the best real estate consultant in Dubai, working with a trusted advisory partner is essential. With over 35 years of dedicated experience in the UAE market, Archers offers RICS-regulated advisory services to help clients make informed, data-driven decisions. Our deep local expertise and commitment to international standards ensure you receive actionable insights you can trust.

Contact Archers today to leverage our expertise for your real estate needs.

📞 +971 58 557 8987
📧 info@archersmena.com
🌐 www.archersmena.com

Frequently Asked Questions

Is it safe to invest in off-plan properties in Dubai?

Yes, investing in off-plan properties is generally safe due to strict regulations, assuming the properties you invest in are compliant with those regulations. Developers are required to register their projects with RERA and deposit all buyer payments into DLD-approved escrow accounts. This ensures that funds are used solely for the construction of the project.

Can I get a mortgage as a non-resident?

Yes, non-residents can obtain mortgages from various banks in the UAE. However, the terms and eligibility criteria may differ from those for residents. Typically, non-residents can expect to secure a loan-to-value (LTV) ratio of up to 50-70%, depending on the lender and their financial profile.

What are the ongoing costs of owning a property in Dubai?

Beyond the purchase price, property owners are responsible for annual service charges, which cover the maintenance of common areas, facilities, and the community. These fees vary depending on the development and property size. Owners must also consider utility bills (water, electricity, and air conditioning) provided by the Dubai Electricity and Water Authority (DEWA).