The real estate market in Dubai demonstrates impressive dynamics, although experts predict more moderate growth in the coming period. According to the latest research by the reputable consulting company Knight Frank, 2025 will be marked by an 8% increase in the value of residential real estate in the emirate, while the premium segment will show a more restrained growth of about 5%.
But no matter how you look at it, the UAE will continue to be a feeding trough for investors across the globe. In the first nine months of 2024, the volume of transactions surpassed the previous year’s cumulative figures, reaching an impressive $31.7 million. Just think how phenomenal the market is performing. This is especially indicative of the transformation of the premium segment: if in 2020 only 6.3% of residential properties were sold at a price above $1 million, this figure has now reached 18.1%. Roughly speaking, almost every fifth object belongs to the category of elite housing.
Behind this impressive growth is not a speculative frenzy and temporary trends. It is a well-thought-out government policy implemented in the post-Kovid period. The cornerstone of success was the UAE’s progressive visa policy, which creates favorable conditions for the inflow of wealthy investors from different parts of the world. In light of these trends, the question is how to approach buying apartments in the UAE competently? How is the sale of real estate in the UAE and are there any pitfalls, without understanding which it is better not to proceed to the transaction?
Preparing for the sale of real estate
The sale’s success largely depends on the correct preparation of the object. Of primary importance is an accurate assessment of the market value of the property. Professional appraisers analyze many factors:
- current market trends,
- the condition and age of the building,
- access to transportation,
- availability of additional options and services (cleaning, gardening, plumbing or concierge services),
- quality of the neighborhood infrastructure,
- sales history of similar properties.
Statistics show that correctly evaluated objects find a buyer on average 30-40 days faster.
Also, we should not forget that professional real estate maintenance plays a key role in creating an attractive offer. Quality cosmetic repairs, elimination of all visible defects, professional photography and creation of a virtual tour are necessary. Investment in preparation is usually 1-2% of the value, but can increase the final price by 5-10%.
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Choosing an experienced real estate agent becomes a critical success factor. A professional will not only help to appraise the property and prepare it for sale properly, but also provide quality marketing. Agents with experience in the UAE have an extensive database of contacts and know the peculiarities of the local market, which significantly accelerates the process of finding a buyer.
Stages of selling real estate in the UAE
The sale process in the UAE is strictly regulated and includes several consecutive stages. After finding a potential buyer, the negotiation stage begins, where the key terms of the deal are agreed upon. It is important to clearly define the price, terms of transfer of real estate, and methods of payment. In the UAE, staged payment is a common practice, where the first installment is usually 10-20% of the cost.
Special attention is paid to preparing a preliminary agreement (Memorandum of Understanding, MoU). This document fixes all the parties’ agreements and serves as a basis for further formalization of the transaction. The MoU specifies the terms of the deposit, the terms of the final payment, and the parties’ responsibility for breach of obligations.
The document must be drawn up legally competent to protect the interests of both parties.
Formalization of documents and legal aspects
Have you ever wondered why many investors continue to actively invest in real estate in the UAE despite the impressive additional costs? The answer lies in the financial system’s transparency and clear structure of all payments that accompany real estate transactions in this country. Unlike many other countries, there are fundamentally different mechanisms for transactions in the primary and secondary markets, each with its features and requirements for executing documents and agreements.
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The primary real estate market in the UAE is a transparent and well-structured system. The leading players here are developers and their official representatives and territorial executive authorities that exercise strict control over transactions. UAE legislation establishes a special procedure for purchasing new buildings: the buyer receives officially registered rights to the object only after making a substantial advance payment – 20% of the total cost of real estate.
Until this advance payment is made, the buyer’s status is rather conditional — he has only a confirmation of the reservation for the selected object. Although this document has legal force, it is not subject to mandatory state registration. The situation changes dramatically after making a fixed prepayment and paying the relevant taxes on the sale of residential property.
At this stage, the developer concludes with the buyer a full-fledged contract of sale of the under-construction object, subject to mandatory registration with the Land Department of Dubai. The final certificate of ownership the buyer receives after the completion of construction and commissioning of the object.
The secondary real estate market in the UAE is characterized by a more complex procedure for processing transactions. The key feature is the mandatory participation of licensed brokers. The sale and purchase process in the secondary market requires the creation of several interrelated contracts, each of which has its own code designation and purpose. Notably, all these documents are executed through a specialized Internet portal of the Dubai Land Department, which provides additional transparency and security of transactions.
The system of contractual relations includes several key forms:
- A – regulates the relationship between the seller and the agent,
- B – records the arrangements between the buyer and his agent,
- I – defines the interaction between the agents of the parties,
- F – represents the basic contract of sale,
- U is used when it is necessary to terminate the contractual relationship with the agent.
It is important to note a common misconception about the invariability of standard forms of contracts. In practice, the principle of freedom of contract allows the parties to agree on individual terms and conditions of the transaction and introduce them into the contract, even if the documents are initially presented in standard forms.
A successful transaction requires a thorough approach to the preparation of documentation. The basic package includes a valid passport with a visa, original documents of title, confirmation of the absence of debts on utility payments andreal estate maintenance. Special attention is paid to checking the legal purity of the object: verification of documents in the land department, identifying possible encumbrances, bans on sale or unresolved legal disputes.
Read also: Features of mortgage lending in the UAE for foreigners.
The final stage of the transaction – registration of the transfer of ownership – is carried out in the Dubai Land Department or a similar body of the Emirate. The procedure requires the personal presence of the parties to the transaction or their representatives with notarized powers of attorney. In this case, professional legal support of the transaction and notary services are not just a formality, but an important guarantee of the legality and correctness of the execution of various documents.
Taxes and fees in the sale of real estate
Several mandatory payments accompany every transaction. Let’s first understand the main expenses when buying real estate in the UAE:
- Fee for transfer of ownership: in Dubai – 4%, in Abu Dhabi – 2% of the price
- Registration fee: from 2000 to 4000 dirhams
- Real estate expert fee: about 2% of the transaction amount
- VAT 5% (only for commercial real estate)
A curious feature of sales in the local market is a flexible approach to the distribution of costs between the parties to the transaction. Take at least the fee for the transfer of ownership: by default, it is divided in half between the seller and the buyer, but the parties are free to agree otherwise. In the primary market, developers often take this payment on themselves, including it in the cost of housing. A modest administrative fee — 540 dirhams (about 147 dollars) — was added to the main costs. However, the size of the registration fee directly depends on the price of real estate. For objects worth up to half a million dirhams, you will have to pay 2000 dirhams, and for more expensive objects, 4000.
A separate story – work with realtors. Their standard fee is about 2% of the transaction amount, but the terms of cooperation can vary greatly. In the primary market, the developer usually covers the commission – a nice bonus for the buyer. But in the secondary market, these costs are either shared between the participants, or completely fall on the shoulders of the one who buys housing. The final component is the procedure for obtaining a document of ownership through the district court. It takes only three days and costs about $70. Commercial real estate owners should consider an additional nuance — five percent VAT. Planning large transactions is worth calculating all possible costs in advance. In addition to the obvious expenses, there may be bank fees for making payments. And if the property is pledged, you must consider the possible costs of early mortgage repayment. Additional costs can reach 7-8% of the object’s value.
Conclusion. Selling real estate in the UAE requires a professional approach at every stage. This process does not tolerate chaos and impromptu actions. From proper valuation and preparation of the object to the final execution of documents, it is important to consider many details and comply with all legal formalities.
For those who first encounter the local real estate market, it is better to enlist the support of an experienced consultant. He will help adequately plan the budget and consider all possible costs, including those that beginners usually do not even suspect. As practice shows, the transaction’s success largely depends on the quality of preparation and professionalism of the involved specialists. A competent approach to the sale process, including proper valuation, quality preparation of the object, professional legal support, and a clear understanding of all costs, ensures the successful completion of the transaction and the protection of the seller’s interests. Was the publication interesting and useful? Want to know everything about the rental market? Subscribe to the UAE real estate guide and receive notifications about new publications on the Lyukos website.
