The shimmering jewel of the Middle East, Dubai, has been attracting investors all over the world, particularly Australians. Dubai has one of the most impressive economies in the world, a high rental income, and zero property tax, and this is why so many people are interested in buying property in Dubai. However, what is the cost of the property in Dubai? What should investors in general and the Australian investors at large be aware of before investing in Dubai?
This guide presents an elaborate and in-depth analysis of the price of property in Dubai, charges and selection factors that can affect the cost. It is just as easy to invest in real estate in Dubai as it is to buy or sell land anywhere around the world. If you are new to the real estate market, here are some things that you might need to consider before you decide to put your money into it.
Why Australian Investors Find Dubai so Delightful
Before we consider the figures, it is necessary to recognise the reasons why Australian investors are beginning to look outside of Australia to invest in real estate in Dubai.
Among the main reasons, one can distinguish:
- Tax-Free Secure: There is no property tax or capital gain tax per year in Dubai.
- High Rental Yields: There are certain places where the gross rental return is between 6% and 10%.
- Strategic Position: Dubai is a space between Europe, Asia, and Africa.
- Luxury at Lower Costs: When it comes to large Australian cities such as Sydney or Melbourne, prices are lower in Dubai in terms of square metres.
- Residency Visas: Purchase of property above a particular value can grant you a residency visa in the country.
Average Price of the Dubai Real Estate by Type
And here are the averages of the prices of different types of Dubai property. Prices may differ significantly depending on their location, any view, amenities, and the reputation of developers.
Apartments
- Studio: AED 450,000 – AED 700,000 (AUD 185,000 – 290,000)
- Bedroom: AED 700,000 – 1.2 million (AUD 290,000 – 500,000)
- 2 bedrooms: AED 1.1 million – AED 2 million (AUD 460,000 – AUD 830,000)
Villas
- 3 Bedroom Villa: AED 2.5 million – AED 4 million (AUD 1.05M – AUD 1.67M)
- 4-Bedroom Villa: 4-4 million AED (AUD 1.67M – AUD 2.72M)
Currency rates are dynamic, and it is advisable to work with a licensed property consultant who has expertise in Dubai property investments, such as an Australian.
Location: Affordable Areas to Invest In
The city of Dubai is multicultural, with areas that offer lifestyles and prices based on individual needs. The table below gives a picture of the pricing of popular areas with the approximate cost per square metre:
| Area | Median Price (AUD/sqm) |
| Downtown Dubai | Between AUD 6,800 and AUD 9,000 |
| Palm Jumeirah | AUD 7,000 to AUD 10,000 |
| Jumeirah Village Circle (JVC) | AUD 3,500 – AUD 4,500 |
| Dubai Marina | AUD 5,500 – AUD 8,000 |
| Business Bay | AUD 6,000 to AUD 7,500 |
| Dubai Hills Estate | AUD 5,000 to AUD 6,500 |
The Palm Jumeirah and Downtown Dubai are the best in terms of commanding premium prices. JVC and Dubai Hills are other areas that are much more affordable and have a good rental opportunity, which is ideal for Australian investors who wish to gain value and growth.
What Australian Investors Need to Know Before Investing: Hidden Costs to Consider
When estimating the prices of Dubai property, one should not forget about extra expenses that are not immediately apparent.
The Mandatory Fees will include:
- Dubai Land Department (DLD) Transfer Fee: 4 % of the value of the property
- Registration Fee: 4,000 AED to 5,000 AED
- Commission of Real Estate Agent: 2 % of the price of the property
- The Trustee Fee: AED 4,200
- Oqood (Off-Plan Registration): AED 5,250
- Service Charges (Annual): 40 – 80 AED per square metre
To give you an idea, a 1 million AED (AUD 415,000) worth property should cost an additional 7-8 % in closing costs.
There will also be bank fees, a mortgage registration fee of 0.25% of the loan value, and valuation fees incurred by the mortgage buyers.
Advantages and Disadvantages of Purchasing Off-Plan and Ready Properties
Improved information is also needed to be made available by investors in Australia on the advantages as well as disadvantages of purchasing off-plan (under construction) versus ready property properties.
Off-Plan:
- Lower entry costs
- Installment billing
- Before handing over, Capital appreciation
- No short-term returns
Ready Property:
- Instant returns
- Less risk in comparison with off-plan
- More expensive up-front investments
- No payment schemes
The developers of Dubai are used to providing 5 to 10-year scheduled payments to all those investors without a large initial down payment.
Payment and Currency Exchange
The exchange rate between AUD and AED is an aspect that Australian investors need to consider. The vast majority of transactions are conducted in AED, which is why aligning with a currency transfer provider can help reduce conversion costs.
Payment Methods:
- Telegraphic transfers
- Escrow accounts (in the off-plan)
- Fortunately, non-residents are allowed to have some mortgages with select banks.
Non-resident buyers will also have to pay a deposit of at least 20-25 %, and financing is available based on eligibility through UAE banks.
Rental Yields and Return on Investment of Australian Investors
The other big reason why Australians are purchasing Dubai real estate is the better rental returns as compared to Australian cities.
Averaged Gross Yields of Areas:
- JVC: 7-8.5%
- Dubai Marina: 6.5-7.5%
- Business Bay: 6-7%
- Downtown Dubai: 5.5% – 6.5%
Compare this to Sydney or Melbourne, where the average gross yields are between 2.5 and 4 % and it is clear why Dubai is so appealing in terms of ROI.
Legal Ownership and Visas
The designated zones allow foreigners, including Australians, to own 100 per cent freehold property. As you invest more than AED 750,000 (AUD 310,000), you can also receive a 2-year investor visa and a longer time frame on properties of higher investment quantity.
Tax Incentives to Australian Investors
- In Dubai, there is no income tax on rental income.
- No tax on the gains made on a sale in Dubai
- You are required to declare income in Australia, but there are tax treaties to ensure that there is no double taxation.
An experienced tax professional who understands the laws in both Australia and the UAE is always best to consult so that the best investment plan is achieved.
Putting a Final Touch on This Subject: Are Dubai Properties Worth It to the Australians?
Appearances, yes, if you are smart about it. The luxury and high returns coupled with tax benefits found in Dubai real estate present a product that the Australian market does not have anything similar to offer to the investors. However, the trick is to realise how much the entire thing will cost, find the perfect location, and hire reputable agents or consultants.
Quick Checklist for Australian Investors
- Maximise your budget in the currencies of AED and AUD.
- Study areas
- Research neighbourhoods
- Be aware of charges and expenses.
- Discover more concepts
- Select an agent with a good reputation for the property.
- Use professionals in the field of law and tax.
- Think long term: Rent or resale.
Dubai property can be a profitable investment, whether you want to diversify your portfolio, have an income set aside, or even migrate. According to the local, with proper local guidance and due diligence, Australian investors can always plunge into one of the most dynamic real estate markets across the world.
