In a dynamic city like Dubai, individuals are often muddled between renting vis-à-vis owning a property. The market and its volatility have proven that it is often the individual’s risk appetite and necessity which influences the decision and there is no right or wrong judgment for the choice made.

While renting may seem to be an affordable option, there are other influencing factors like the individual’s lifestyle, their budget affability, income security, and one’s own career goals which ultimately impetuses their decision to buy or rent.

With this article, we bring forth the imperative points to contemplate which eventually influences the decision to buy or rent.

Where am I financially?

As per Dubai Statistics Centre, the young population (Aged 20-30) constitute about 35% of the overall population. Approximately 90% of this category are expats whom are commencing or in the early stages of their career. These expats prefer to rent a place than own one due to the various constraints with regards to the ability to pay, contractual commitments etc. Buying or owning a property is feasible for individuals having the financial means to bear the costs associated with the purchase of a property like government charges, EMI etc. It is also imperative to note that the loan tenure is considerably lower than the other developing economies like India resulting in higher EMIs. With the emergence of short-term rentals, expats widely prefer renting for a shorter duration (3-6 months) considering the uncertainty in the job market and flexibility in choosing a place to live. Also, the hassle of disposing (selling a property) can be avoided while leaving the country.

Financial appetite differs from person to person. Owning a place is a good choice for individuals having financial stability. For an average individual, the costs associated with the purchase of the property like brokerage fees, registration fees, moving costs etc. could be a substantial amount over and above the purchase price of the property. An individual having the ability to cover these costs could decide to buy a property than rent.

How long will I stay?

The longevity of the stay is a significant factor to be considered before making the decision. Given the facts stated above, renting seems more appealing as the tenant is alleviated from the burden of costs of repairs, renovation of the property and service charges etc. The mobility and freedom to move places are crucial for individuals who are still uncertain in their career or wants to be financially independent before making the purchase decision.

Buying, however, is a better choice in the long run for those who are certain about a more extended stay in the country. One important and indisputable element is having a sense of stability and permanence. Owning the property gives the person the freedom to customize their living space, which is usually limited while renting. An own house also guards the individual against uncertainties like rising rental costs and the landlord’s decision to sell his or her asset or discontinue renting. While buying seems more expensive at the onset, the rental returns/capital appreciation are some of the factors which influence the purchase decision.

What does the market say?

Dubai has a diverse population predominantly comprising of expats. In a market where expatriate visas are linked to work, the risk associated with employment uncertainty makes renting a risk-free option than buying. Also, unlike the other developed and emerging countries which offer permanent residency, the duration of stay in Dubai is limited to the contracting period which inadvertently shortens their stay. These factors have a detrimental effect constraining the individuals to rent than buy.

However, the recent initiatives by the government have been in favour of people who wishes to stay in the country for a longer duration with visa security. The UAE government has recently announced multiple new visa reforms over the past few months. Some of them are remote work visa that can be used by professionals to reside in the UAE as they connect to work abroad through virtual mediums, multiple-entry tourist visa open to all nationalities. The government also announced a law that would grant Emirati citizenship to select foreign expats like Investors, Scientists, Doctors, Engineers, Artists, and Authors. The other reforms also included students being able to sponsor their parents and also the introduction of long-term Golden Visas. The Golden visa system allows expats to live, work and study in the UAE without the need of a national sponsor and with 100 per cent ownership of their business. These visas are primarily issued for a period of 5 or 10 years and are renewed automatically. These reforms invariably allow the expats to look at the option to buy rather than spending the money on renting a property.

Is there someone that could help?

Given the historical trend of the real estate market in Dubai, the property prices have always recovered post the crisis period. Considering the current supply and demand dynamics, there is a probability that the real estate market would not remain a buyer’s market for long.

Although there are numerous online portals available to understand the prevailing trend for investors and end-users, the volatility and uncertainty trends in the past are difficult to comprehend, especially for individuals who are new to the market. A real estate adviser who is established in the market is the fittest choice to consult to make educated choices. Experts in the field would be better equipped to analyze, research and forecast the future, which would help the individual to examine the risks and possibilities. Considering the inherent financial commitment associated, it is imperative to understand the terms, costs, and procedures before getting into a contractual engagement.

Land Sterling has been a major Property Consultant established in Dubai for over 10 years and as such is well-positioned to guide buyers helping them understand the current and future real estate trends.

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Land Sterling is a market leader in real estate consultancy based in Dubai, Abu Dhabi and Riyadh. Backed with qualified experts with over 100 years of cumulative experience, Land Sterling provides professional property expertise cutting through various regions including the Middle East, North Africa & Europe. Land Sterling has a team of experienced consultants with an in-depth knowledge of the Middle East property market at your service. Send an email to info@landsterling.com or call us on +971 4 380 8707 to find how we can best help you. You may also visit landsterling.com/ for more information.