Many of us move to Dubai with the “two-year plan”, but two years quickly becomes five, and five quickly becomes ten, and before you know it, you’re a long-term expat. And if you do decide to make Dubai your home, a hot topic is whether you should buy or rent a property. In a real estate market like that of Dubai, how do you determine which makes more financial sense? Before you start your property search, there are key factors you must consider before making the decision.

1: The Duration of your stay in the UAE:

The most important question you have to ask yourself before even thinking about buying or renting a property is how long do you plan on staying in the UAE. If you’re planning on staying in Dubai for less than 2 years renting is probably the better option for you. It will allow you the freedom to live in different communities across Dubai and an easy departure when you decide to move home or set off on your next adventure.

2: Your Financial Position:

Whether you are considering to buy or rent, both options require a huge financial commitment. Ask yourself, “Can I afford it?” Home ownership in Dubai requires a down payment of 20% (minimum for an expat) for a property under the value of AED 5,000,000 and anything above AED 5,000,000 will require a down payment of 30% (minimum for an expat).

If you are in a fortunate position to have the savings to put down a deposit and are planning on staying in Dubai for more than 2 years, buying a property will make more financial sense given the rapid increase in rental prices across some of Dubai’s most popular communities in recent months. There are other upfront costs to consider when buying a home, such as the real estate agent fee (2% of property value + 5% VAT), Dubai Land Department Fee (4% of property value), and mortgage processing fees (usually 0.25% of the loan amount).

3: Your Preferred Lifestyle and Preferences

When it comes to deciding to buy or rent a property, another key factor to consider is your lifestyle.

Location location, location, we’ve all heard the saying. The location of a home provides convenience to your lifestyle and in turn influences rental rates and property prices. Take into consideration your non-negotiables, do you want to be close to your child’s schools for a shorter commute in the morning? Or is it essential you’re within a 5-minute drive to the beach?

Also, consider if you would like to have the option to renovate the property. Are you going to want to make modifications to the property who hasn’t longed for a kitchen remodel? Or the option to elevate your outdoor space and perhaps add a much-desired pool? Buying a property gives you the full freedom to renovate as you please. If you are renting on the other hand, you might be restricted subject to the conditions on your tenancy agreement.

4: Renting vs. Buying: The Math Behind the Decision

To understand if buying or renting a property is the better deal let’s do the math. Let’s take a real-life scenario to demonstrate.

Take the example of a 3 Bedroom villa in the Springs for sale at AED 2,800,000 and on the other hand a 3-bedroom villa for rent in the Springs with an annual rental price of AED 180,000.

A. What are the upfront costs to buy a 3 Bedroom Villa in the Springs at AED 2,800,000?

*Disclaimer: Buyers must keep in mind that mortgage agreement and property valuation fees can vary.

B. How much will it cost to buy a 3 Bedroom villa in the springs at AED 2,800,000 over 5 years?


AED Cost

Deposit (20%)


Estimated Monthly Payments for 25 years at 3.99%


Total Monthly Installments over 5 years


Interest Paid over 5 years directly to the Bank


Capital Paid Over a 5 Year Period (this is the money saved)


C. How much will it cost to rent a 3 Bedroom Villa in the Springs over 5 years given Annual Rent is AED 180,000?


AED Cost

Rent over 5 years


Deposit (5% one time fee)


Real Estate Fee (5% one time fee)


Ejari Fees (AED 220 annually)


Total Cost of Renting Over 5 years


It is important to
factor in the possibility of rent increases which many are experiencing in Dubai in recent months. Landlords are entitled to raise the annual rent by 5%-10% at the stage of contract renewal, provided they have given the tenant 90 days’ notice.

What do the numbers suggest?

The upfront cost of buying a home is the biggest barrier for many but when comparing the two options you can see if it is more favourable for people staying in the UAE for a longer period of time to buy. Even if you plan on leaving the emirate after a few years you will have an investment property that in turn will generate you a high ROI. With Dubai’s strong economy and growing population, it is an ideal place to have an investment property.

5: A Trustworthy Real Estate Agent

Whether you’re renting or buying property, it’s extremely important to work with a licenced and trustworthy agency. Espace Real Estate is one of Dubai’s leading property agents providing a full suite of property-related services across residential sales & leasing, mortgage services, property management and short-term rentals. Visit now to view a selection of properties from rentals to sales across Dubai’s most popular residential communities.

What is the right choice for you?

Ultimately, when it comes to deciding whether to buy or rent, it all comes down to personal choice and individual factors. If you haven’t determined which is the right option for you yet get in touch


Espace Real Estate Mortgage experts who work hard on your behalf, providing a
high-quality, flexible service to get you the best mortgage deal possible to suit your needs while giving you the guidance you need. For more information, get in touch at or at 04 306 9999.