Staying 5+ years — long enough to amortise the 6.5% transaction cost stack.
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Decision framework
An honest framework, not a sales pitch. The decision turns on one number — how long you'll stay — plus the full cost stack on each side. Here's the break-even logic, who each path suits, and a worked five-year comparison.
Buying in Dubai carries a ~6.5% upfront transaction cost (4% DLD + agency + mortgage fees) that is unrecoverable. As a rough guide, you need to hold the property at least 4-5 years for capital appreciation + rent-saved to outrun those sunk costs. Under 3 years, renting almost always wins. Over 7 years, buying almost always wins. The 3-7 year window is where the area-specific numbers decide it.
Most comparisons only count rent vs mortgage payment. The real decision needs every line on both sides.
Paid at purchase. AED 60,000 on a AED 1.5M unit. Sunk cost — non-recoverable.
Agency commission + DLD admin + title issuance. ≈ AED 38,000.
Processing + valuation + registration. Plus interest over the loan life.
Recurring. ≈ AED 21,000/year on a 750 sqft premium unit. See service-charge explainer.
Owner-borne upkeep + building insurance. ≈ AED 15,000/year.
≈ AED 90,000-100,000/year for an equivalent AED 1.5M unit. Subject to RERA rental-index increase caps.
≈ AED 5,000. Some landlords waive on renewal.
Returned at end of tenancy minus damages. Not a sunk cost.
Refundable utility deposits.
Annual tenancy registration. Required for visa + utility activation.
Staying 5+ years — long enough to amortise the 6.5% transaction cost stack.
Want a Golden Visa via property (AED 2M+ unlocks the 10-year route).
Comfortable with service-charge + maintenance obligations + illiquidity.
Believe the specific area's capital growth beats your alternative investment return.
Time horizon under 3-4 years — transaction costs won't be recovered.
Job or visa tied to an employer with uncertain renewal.
Want maximum flexibility to relocate between areas as the city evolves.
Prefer to deploy capital into higher-return assets than residential property.
AED 1.5M apartment, 20% down + 25-year mortgage vs renting an equivalent unit at AED 95k/year. Illustrative — your area's appreciation + your mortgage rate move the result.
| Line | Buy | Rent |
|---|---|---|
| Upfront costs | AED 158,000 (4% DLD + fees + 20% down on mortgage) | AED 12,000 (deposits + agency + Ejari) |
| 5y recurring costs | AED 180,000 (service charge + maintenance + insurance) | AED 490,000 (rent over 5y, ~3%/yr increase) |
| 5y mortgage interest | AED 165,000 (≈ 4.2% on AED 1.2M, 25y) | — |
| Capital appreciation | + AED 240,000 (assume 3%/yr on AED 1.5M) | — (deposit returned, no upside) |
| Equity built (principal) | + AED 130,000 (mortgage principal paid down) | — |
| Net 5-year position | ≈ − AED 133,000 net cost, + AED 370,000 in equity/appreciation | ≈ − AED 502,000 net cost, AED 0 asset |
Pressure-test your own numbers with the affordability and yield calculators.