How to finance a property purchase in Dubai

The Dubai property market saw substantial growth in 2024, closing the year with a 20% increase compared to 2023. This is great news if you’re selling in Dubai, and also if you’re buying. Why? Because property prices are predicted to rise at a slower rate of 5-10% in 2025, so it’s a great time to invest in one of the most vibrant cities in the world.

In addition to buying a home to live in, Dubai offers the opportunity to make a profit from seasonal rentals. With the popularity of remote working and Dubai being a popular tourist destination, there’s no shortage of people wanting to rent property short-term.

Buying a property in Dubai is relatively straightforward compared to many other countries. The city’s property market is well-regulated, with clear legal processes and accessible financing options for foreigners. However, it’s important to use the services of a professional company, such as iad Overseas, to ensure the transaction goes smoothly from start to finish.

If you wish to invest in property in Dubai, you’ll find several options to finance your purchase. You should research each and work out which is best for your circumstances. For example, you might be considering applying for a mortgage in Dubai, but did you know you can also take out a property loan in your home country?

The main ways to finance your property purchase in Dubai are:

There are lots of banks in Dubai for foreigners which offer a variety of mortgages. As a British citizen, you can approach a bank directly or use a mortgage broker to apply for the two main types of Dubai mortgage:

• fixed rate – gives the security of knowing how much you’ll pay each month. The rate is typically set for 1-5 years, after which you renegotiate.
• variable rate – increases or decreases, depending on interest rates.

You don’t have to be a resident to buy a property in Dubai. Non-residents must provide at least 25% as a deposit for properties under AED 5 million and 35% for higher-value properties. Residents need a minimum of 20% of the property value as a down payment for properties under AED 5 million and 30% for properties above AED 5 million.

Foreigners can only buy property in Dubai’s designated freehold areas. Ownership rights vary between freehold and leasehold properties, so you should confirm the property type before purchasing. If you own a freehold property, you own the land as well as the building, while with a leasehold you only own the lease for 99 years or less and not the land.

Another option is to apply for a mortgage in the UK to purchase property in Dubai. Several of the main UK banks offer international mortgages that are specifically designed for expats. If you choose this option, it’s important to be aware of currency conversion rates and charges to ensure you maximise your money.

If you want to keep your UK property and it has increased in value, you could remortgage and use the funds to buy or put a deposit on your new home in Dubai. This option is ideal if you want to invest in Dubai but keep a UK base.

Dubai attracts many cash buyers at the luxury end of the market, in areas such as Palm Jumeirah and Dubai Hills Estate. If you’ve sold your home in the UK, elsewhere or have savings, you could also buy your Dubai property outright, without the commitment of a Dubai mortgage. As a cash buyer, you’ll also have more room to negotiate on the property price as this method can speed up the sale.

Dubai is a modern city and property development is vast, with new projects beginning all the time. With over 2,500 developers, there are plenty to choose from, and several offer finance to attract property buyers.

Developer financing could be suitable if you want to purchase a new-build without applying for a Dubai mortgage. It gives you the flexibility to negotiate the deposit (often paid in instalments linked to construction milestones) as well as the interest rate and the payment term.

While it’s not essential to have a Dubai bank account to purchase a property in Dubai, you will need one if you intend to apply for a mortgage or pay cash. Additionally, a Dubai bank account makes payment of utility bills, maintenance fees and other property-related expenses simpler and cheaper.

Are you wondering how to buy property in Dubai from the UK? Contact iad Overseas and one of our expert agents will get in touch to help you with your Dubai property purchase.