Published Date: March 19, 2025 ✍️ Author: Global World Citizen News Team 🌍 Source: GlobalWorldCitizen.com
Investing in Dubai Real Estate: What It Takes to Buy a $1 Million Property
Dubai’s real estate market continues to attract investors and homeowners worldwide. However, purchasing a $1 million (AED3.67 million) property requires more than just the down payment. Financial experts suggest buyers should prepare for additional costs, from closing fees to maintenance expenses, ensuring a well-structured financial plan before making the investment.
How Much Do You Need to Save?
Before purchasing a $1 million property in Dubai, experts recommend having at least 30-35% of the total price in liquid savings. This means setting aside AED1.25–1.6 million ($340,000–$435,000) to cover initial payments, fees, and other associated costs.
Dubai-based financial expert Mike Coady, with over two decades of experience, explains:
“Buying a property in Dubai is an exciting milestone, but it requires careful planning. Beyond the down payment, buyers must account for closing costs, mortgage requirements, and ongoing expenses.”
Breaking Down the Costs
Down Payment Requirements
- Expats: Minimum 20% down payment for properties below AED5 million and 30% for properties above that threshold.
- Developers sometimes offer staggered payment plans, but these carry risks such as project delays.
Closing Costs & Fees (6-8% of Property Price)
In addition to the down payment, buyers must budget for AED220,000–AED290,000 ($59,900–$78,900) in closing costs, including:
Dubai Land Department (DLD) Fee: 4% of the property value Real Estate Agent Commission: 2% of the sale price Mortgage Processing Fee: 0.25% of the loan amount Property Valuation Fee: AED2,500–AED5,000 ($680–$1,300)
Jo Phillips, Managing Director at Phillips & Walls Mortgage Brokers LLC, suggests setting aside around 7% of the property price for these costs.
“Buyers should have approximately $270,000 in total, including the down payment and fees.”
Mortgage Considerations
- Dubai mortgage rates range from 3.99%–5.5%.
- Fixed-rate mortgages provide stability, while variable-rate options can be beneficial in a declining interest rate environment.
- Mortgage payments should not exceed 30-35% of net monthly income.
For a $1 million property, assuming an $800,000 mortgage, monthly payments would be approximately $4,700 (AED17,500), requiring a minimum income of AED50,000 ($13,600) per month for financial comfort.
Emergency & Additional Costs
- Experts advise keeping an emergency buffer of 6-12 months of mortgage payments.
- Renovation and furnishing costs for second-hand properties can range from AED50,000–AED500,000 ($13,600–$136,000).
- Monthly or quarterly service charges and maintenance fees must also be accounted for.
How to Save for a Property in Dubai
Recommended Savings Plan
- If buying within 5 years, save 20-30% of income consistently.
- Use automated savings transfers to a dedicated account.
- Consider high-interest savings accounts to grow your funds.
“Many expats delay home buying due to poor saving habits. The easiest way to reach your goal is automation, discipline, and a clear financial plan.” – Mike Coady
No Home-Buying Incentives for Expats
Unlike Emiratis, expats do not benefit from government housing programs in Dubai. However, there are no property taxes or capital gains taxes, making Dubai a prime destination for real estate investment.
Key Takeaways Before Buying a Property in Dubai
Understand all costs – Down payment, fees, maintenance, and emergency funds. Avoid financial overextension – Mortgage payments should remain within 30-35% of your income. Plan for all scenarios – Job loss, relocation, and market fluctuations. Seek professional advice – Work with a financial adviser for a structured approach.
Final Thought:
“Buying a $1 million home in Dubai is a significant decision that should align with a broader financial plan. Whether as an investment or a residence, understanding all financial obligations ensures long-term stability.” – Mike Coady
With no capital gains tax and a booming market, Dubai remains an attractive real estate destination. However, financial preparedness is key to making a secure and profitable investment.