Buying vs. renting property in Dubai remains an undecided factor for many expats in Dubai. Every expat has to spend a significant amount of their income on rent every year, regardless of their type of housing or location.
According to housing experts in Dubai, every resident here pays 40% of their income only for house rent. Now, this adds up in the long run to a big amount that could have been saved or invested in a productive manner.
Therefore, let us explore the buying vs. renting conditions in Dubai to understand the better options.
Onetime Renting vs. Buying Expenses:
Renters are expected to pay for down payment, broker or agency fees, and furnishing costs while renting property in Dubai. As a result, this will cost the renter around Dh 30,000 to 40,000 for rent only.
On the other hand, buyers are expected to pay a minimum of Dh 325,000 as a down payment for their property. However, other costs of buying property in Dubai include:
- Dubai Land Department (DLD) fees for property transfer
- Registration fees
- Valuation fee for mortgage
- Oqood fees for off-plan sales
- Mortgage establishment fee (bank)
- DLD mortgage registration fee
- Costs of furnishing
To sum it up, the buyer will be required to pay approximately Dh 467,040 to own property in Dubai. However, depending on location or type of housing, the buying cost can vary a lot.
Yearly expenses for Dubai property in 20 years:
Now, let us take a look at the bigger picture of the buying vs. renting issue in Dubai excluding all utility costs.
We are assuming that the rent will increase by 15 percent after ten years. Therefore, the renter will be paying Dh 2.14 million in rent in 20 years including the annual Ejari fees.
Similarly, we are assuming that the buyer is paying for his mortgage loan at a 3-percent fixed interest rate. We are also assuming that the buyer pays Dh 300,000 as annual maintenance for the property. Therefore, the buyer will be tackling a cost of Dh 1.76 million for owning his Dubai property in 20 years.
Should I buy or rent in Dubai?
The entire scenario of buying vs. renting property in Dubai seems to get clearer from the above comparison.
If you are planning to stay in Dubai for 3 or 4 years, then renting a property is a good option. In this case, we are assuming that you are not settling down in Dubai and would be going back to your homeland.
If you are planning to stay in Dubai for 10 to 20 years, then buying is the best option. Buying will save you a lot of money in these 20 years, especially when you are intending to settle in Dubai.
Above all, buying will give you lifetime stability, flexibility, and financial security.
Buying a new car vs. renting a car in Dubai
Most expats remain torn between buying a new car or second-hand car. They are also torn between buying a new car and renting a car. This is because living expenses in Dubai are always skyrocketing.
Hence, following these conditions below should help make your decision on buying or renting your car easier.
- If you are on a low budget, planning to stay for a long time, and have a stable job, then you can lease your car through a bank.
2. If you do not wish to stay for a long time and are unsure about your job, then go for buying a second-hand car.
3. If you have a big budget, a handsomely paid job, and want to drive your car for 4 to 5 years, then buy a new car.
4. If you are staying for a short period of time or have the tendency to change cars frequently, then buying a secondhand car will be a good choice. In this case, renting is another option you have.
