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Cheapest Areas to Buy a House in the UAE: Top 7 Low-Cost Areas For Real Estate Investing

The cheapest areas to buy a house in the UAE is a topic of interest for many homebuyers, investors, and those looking for a bargain. With the high property prices in the UAE, finding an affordable home can seem like a daunting task. 

However, with a little research and knowledge, it is possible to find some hidden gems that offer great value for money.

Knowing where to look for the cheapest areas to buy a house in the UAE is important for those who want to get on the property ladder or invest in the country’s booming real estate market. 

The purpose of this blog is to provide valuable insights into the most affordable areas in the UAE and to help readers make informed decisions when it comes to buying a home. 

If you are looking to invest as an expat or high-net-worth individual, which is what I specialize in, you can email me (advice@adamfayed.com) or WhatsApp (+44-7393-450-837).

Table of Contents

What is the average cost of a home in the UAE, and how does it vary by region?

The average cost of a home in the UAE can vary greatly by region. According to recent data, the average cost of a home in the UAE is around AED 2.5 million (USD 680,000). However, this figure can be much higher or lower depending on the location and type of property.

In Dubai, for example, the average cost of a home is around AED 4.2 million (USD 1.14 million). This is significantly higher than the average cost of a home in other emirates like Ajman, where the average cost of a home is around AED 665,000 (USD 181,000).

Similarly, in Abu Dhabi, the average cost of a home is around AED 2.6 million (USD 708,000), which is higher than in some of the smaller emirates like Umm Al Quwain or Ras Al Khaimah.

It’s important to note that these figures are averages, and the cost of a home can vary greatly depending on the location, size, and type of property.

In addition, the cost of living in different regions of the UAE can also impact the affordability of buying a home. 

For those looking for more affordable options, it’s worth exploring some of the cheaper areas in the UAE, which can offer more budget-friendly options for buyers.

What are the cheapest areas to buy a house in the UAE?

The UAE has several areas that offer more affordable options for those looking to buy a home. 

However, it’s important to note that even within these areas, property prices can vary greatly depending on the location, size, and type of property. 

Here are seven of the most affordable areas to buy a house in the UAE:

Ajman

Ajman is known for having some of the most affordable housing options in the UAE. The average price of a house in Ajman is significantly lower than in other emirates like Dubai or Abu Dhabi.

Umm Al Quwain

Umm Al Quwain is another affordable emirate to consider. It is a smaller emirate, but it offers a range of housing options at more affordable prices.

Ras Al Khaimah

Ras Al Khaimah is a growing emirate that is becoming increasingly popular with expats. It has a lower cost of living and offers more affordable housing options.

Al Ain

Al Ain is a city located in the Emirate of Abu Dhabi, and it has lower property prices than other areas in Abu Dhabi.

Sharjah

Sharjah is the third-largest emirate in the UAE and has lower property prices than Dubai or Abu Dhabi. It is a popular location for those looking for a more affordable option.

Dubai South

Dubai South is an up-and-coming area that is known for offering more affordable housing options than other areas of Dubai.

Dubai Investment Park

Dubai Investment Park is another area in Dubai that offers more affordable options for buyers. It is a popular area for those looking for a good balance between affordability and convenience.

Dubai Investment Park is among the cheapest areas to buy a house in the UAE. Photo by lapography
Dubai Investment Park is among the cheapest areas to buy a house in the UAE. Photo by lapography

What are the advantages and disadvantages of buying a house in a cheaper area of the UAE?

Buying a house in a cheaper area of the UAE can have both advantages and disadvantages.

One of the main advantages of buying a house in a cheaper area of the UAE is affordability. These areas can offer more budget-friendly options for buyers, making it easier for them to get onto the property ladder or invest in property.

Cheaper areas in the UAE may have more potential for growth in the future. As these areas become more popular with buyers, property values may rise, offering an opportunity for buyers to gain value on their investments.

Living in a cheaper area of the UAE may also mean a lower cost of living overall. This can be especially beneficial for those on a tight budget, as it can help to keep other expenses, such as utilities and transportation, more affordable.

However, cheaper areas of the UAE may not offer as many amenities or conveniences as more expensive areas. This can mean longer commutes or less access to services such as schools, hospitals, or shopping centers.

Cheaper areas of the UAE may also be at risk of oversupply. This means that there may be more properties available than there is demand for, which can lead to a drop in property values.

While there may be potential for growth in cheaper areas of the UAE, it may be slower than in more expensive areas. This means that buyers may need to be patient and willing to wait for their investment to appreciate in value.

How does the process of buying a home in the UAE differ from other countries?

The process of buying a home in the UAE can differ significantly from other countries. Here are some of the main ways that the process of buying a home in the UAE can be different:

Freehold ownership

In the UAE, only certain areas allow for freehold ownership, which means that a buyer has full ownership of the property and the land it is built on. In other areas, ownership is restricted to leasehold, which means that a buyer only has ownership of the property for a set period of time.

Payment terms

In the UAE, it is common for buyers to make a down payment of around 25-30% of the purchase price of the property. The remaining balance is usually paid off over a period of time, often through post-dated checks.

Fees and taxes

There are several fees and taxes associated with buying a home in the UAE, including registration fees, transfer fees, and agent commissions. These fees can add up quickly and should be factored into a buyer’s budget.

Foreign ownership restrictions

Non-UAE nationals may face restrictions on their ability to purchase property in certain areas of the UAE. These restrictions can vary depending on the emirate and the type of property being purchased.

Property inspections

In some countries, buyers may be required to have a home inspection conducted before purchasing a property. In the UAE, this is not a common practice. Buyers should conduct their own inspections or hire a professional to do so.

Contract language

In the UAE, contracts for buying and selling property are typically written in Arabic. Buyers should ensure that they fully understand the terms of the contract before signing it or consider hiring a translator or legal professional to assist them.

What kind of financing options are available for buying a home in the UAE?

There are several financing options available for those looking to buy a home in the UAE. 

One of the most common options is to obtain a mortgage from a bank or financial institution. Many banks in the UAE offer mortgages to both UAE nationals and expats, although the requirements and terms can vary.

To obtain a mortgage in the UAE, buyers will typically need to make a down payment of around 25-30% of the purchase price of the property. 

They will also need to provide proof of income and undergo a credit check. The terms of the mortgage will vary depending on the bank and the buyer’s financial situation, but most mortgages in the UAE are offered with a fixed interest rate for a period of up to 25 years.

Another financing option for buying a home in the UAE is to take out a personal loan. Personal loans can be used for a variety of purposes, including buying a home. 

However, they typically have higher interest rates than mortgages and may require a higher down payment.

In addition to these traditional financing options, there are several government-backed programs that can assist buyers with purchasing a home in the UAE. 

For example, the Abu Dhabi Housing Authority offers a range of housing programs and services for UAE nationals, including loans for building or buying homes. 

The Dubai Land Department also offers several programs to support homeownership, including a rent-to-own program and a mortgage assistance program for first-time buyers.

Are there any hidden costs associated with buying a home in a cheaper area of the UAE?

Yes, there may be hidden costs associated with buying a home in a cheaper area of the UAE. 

It’s important for buyers to be aware of these costs and factor them into their budget when considering purchasing a property. Here are some of the potential hidden costs to be aware of:

Maintenance and repair costs

While the purchase price of a home in a cheaper area of the UAE may be lower, there may be additional costs associated with maintenance and repairs. Buyers should budget for ongoing maintenance and unexpected repairs, such as plumbing or electrical issues.

Service charges and fees

Some areas in the UAE may have additional service charges or fees that buyers will need to pay. For example, buyers may need to pay fees for access to community facilities or services.

Insurance costs

Home insurance is not mandatory in the UAE, but it is recommended. Buyers should consider the cost of home insurance when budgeting for a property purchase.

Agent commissions

Buyers may need to pay a commission to a real estate agent or broker when purchasing a property. This fee is typically a percentage of the purchase price and can vary depending on the agent and the area.

Legal fees

Buyers may need to pay legal fees associated with the property purchase, such as fees for drafting and reviewing contracts. These fees can vary depending on the complexity of the transaction and the legal professional hired.

Transfer fees

Buyers will also need to pay transfer fees when purchasing a property. These fees cover the cost of transferring ownership from the seller to the buyer and can vary depending on the emirate and the purchase price of the property.

Consider insurance cost when buying in the cheapest area to buy a house in the UAE. Photo by Monstera
Consider insurance cost when buying in the cheapest area to buy a house in the UAE. Photo by Monstera

What factors should I consider when choosing an area to buy a house in the UAE?

There are several factors to consider when choosing an area to buy a house in the UAE. Here are some of the main ones:

Location

The location of the property is one of the most important factors to consider. Buyers should think about factors such as proximity to work, schools, and other amenities, as well as the overall safety and livability of the area.

Budget

Buyers should consider their budget when choosing an area to buy a house in. Some areas of the UAE may be more affordable than others but may not offer the same amenities or conveniences as more expensive areas.

Property type

Buyers should also consider the type of property they are looking for. Some areas of the UAE may offer more options for villas or townhouses, while others may be more focused on apartments or flats.

Future development plans

It can be useful to research any future development plans in the area before making a purchase. For example, if there are plans for new infrastructure or commercial development, this could impact the value of the property in the future.

Community amenities

Buyers may also want to consider the community amenities available in the area, such as parks, schools, and shopping centers. These amenities can impact the overall livability and desirability of the area.

Accessibility

Buyers should also consider the accessibility of the area, including access to public transportation and major highways. This can impact the ease of commuting and overall convenience of living in the area.

Resale potential

Finally, buyers should consider the potential resale value of the property. While it’s impossible to predict the future value of a property, considering factors such as location, amenities, and future development plans can give buyers an idea of the potential for growth in the area.

How can I find a reputable real estate agent in the UAE?

Finding a reputable real estate agent in the UAE can be a challenge, but there are several steps you can take to help you find a trusted and reliable agent.

Start by doing some research online to identify real estate agencies or agents in the area you’re interested in. Look for agents with good reviews and a track record of success.

Ask friends, family members, or colleagues who have recently bought or sold a property in the UAE for recommendations. They may be able to refer you to a reputable agent they have worked with in the past.

Look for agents who are accredited by the Real Estate Regulatory Agency (RERA) in Dubai or the Department of Municipal Affairs and Transport (DMAT) in Abu Dhabi. These agencies provide licenses and certifications to real estate agents who meet certain requirements and standards.

Look for agents with experience in the specific area and type of property you’re interested in. An agent who specializes in the type of property you’re looking for may be better equipped to help you find what you’re looking for.

Before working with an agent, schedule a meeting in person or over the phone to discuss your needs and expectations. This can help you get a sense of their communication style, professionalism, and expertise.

Finally, be sure to clarify the commission structure and any fees associated with working with the agent before you begin working together. This can help you avoid any surprises or misunderstandings down the line.

Get the help of a reputable real estate agent when looking into the cheapest areas to buy a house in the UAE. Photo by Alena Darmel
Get the help of a reputable real estate agent when looking into the cheapest areas to buy a house in the UAE. Photo by Alena Darmel

What are some common mistakes to avoid when buying a home in the UAE?

When buying a home in the UAE, there are several common mistakes that buyers should avoid. Here are some of the most common ones:

Not doing enough research

It’s important to thoroughly research the area, the property, and any associated fees and costs before making a purchase. Not doing enough research can lead to unexpected expenses or other issues down the line.

Overextending your budget

It’s important to set a realistic budget and stick to it. Overextending your budget can lead to financial strain and make it difficult to afford ongoing expenses, such as maintenance and repair costs.

Not working with a reputable real estate agent

Working with a reputable real estate agent is important to ensure that the transaction is handled properly and all necessary paperwork and legal requirements are met.

Not understanding the terms of the contract

Buyers should carefully review and understand the terms of the contract before signing it. It’s important to clarify any uncertainties and ensure that all terms are in line with expectations before moving forward.

Skipping property inspections

Property inspections are important to identify any issues with the property before making a purchase. Skipping this step can lead to unexpected repair costs down the line.

Not considering future growth and development

Buyers should consider future growth and development plans in the area before making a purchase. This can impact the value of the property in the future.

Not factoring in all costs

Buyers should be aware of all costs associated with the property purchase, including fees, taxes, and ongoing expenses like maintenance and repairs. Not factoring in all costs can lead to unexpected expenses and financial strain.

What kind of legal and administrative issues should I be aware of when buying a home in the UAE?

When buying a home in the UAE, there are several legal and administrative issues that buyers should be aware of. Here are some of the most important ones:

Ownership laws

In the UAE, the ownership of land and property is governed by federal and local laws. Buyers should be aware of the ownership laws in the emirate where they plan to purchase property, as well as any restrictions that may apply to non-UAE nationals.

Title deeds

Title deeds are important legal documents that prove ownership of a property. Buyers should ensure that they receive a valid title deed when purchasing a property in the UAE.

Registration

Property registration is required by law in the UAE. Buyers should ensure that the property they are purchasing is properly registered with the relevant authorities and that all necessary fees and taxes have been paid.

Contracts

Contracts are an important part of the property purchase process in the UAE. Buyers should carefully review and understand the terms of the contract before signing it and may want to consider hiring a legal professional to assist them.

Fees and taxes

There are several fees and taxes associated with buying a home in the UAE, including registration fees, transfer fees, and agent commissions. Buyers should be aware of these costs and factor them into their budget when considering a property purchase.

Mortgage laws

Mortgage laws in the UAE can be complex, and it’s important for buyers to understand the terms and requirements of any mortgage they are considering. Buyers may want to consider working with a reputable bank or financial institution and seeking professional advice to ensure that they fully understand the mortgage process.

Residency permits

Non-UAE nationals may require a residency permit to purchase property in the UAE. Buyers should be aware of the requirements for obtaining a residency permit and factor this into their plans when considering a property purchase.

What is the outlook for property prices in the cheaper areas of the UAE in the coming years?

The outlook for property prices in the cheaper areas of the UAE in the coming years is difficult to predict. 

Property prices in the UAE are influenced by a variety of factors, including economic conditions, government policies, and market trends.

Currently, the UAE real estate market is experiencing a period of adjustment, with property prices softening in many areas. This has been attributed to a variety of factors, including oversupply, changing demand patterns, and economic uncertainty.

However, some analysts expect that the market may stabilize in the coming years as supply and demand come into balance.

In the long term, the outlook for property prices in the cheaper areas of the UAE may depend on factors such as population growth, economic development, and infrastructure investments. 

Areas that are experiencing growth and development may see property prices rise in the coming years, while areas that are not seeing significant growth may see more stable or even declining prices.

Ultimately, the outlook for property prices in the cheaper areas of the UAE will depend on a range of factors that are difficult to predict. 

Buyers should carefully consider their financial situation and long-term plans when making a property purchase and work with a reputable real estate agent and financial professional to ensure that they make an informed decision.

Conclusion

In conclusion, the UAE offers a range of options for buyers looking to purchase a home in a more affordable area. 

However, it’s important for buyers to carefully consider all of the factors involved in the property purchase process, including location, budget, financing options, and legal and administrative requirements.

By doing their research and working with reputable professionals, buyers can make informed decisions and avoid common mistakes that can lead to unexpected expenses or other issues down the line.

Ultimately, buying a home in the UAE can be a rewarding experience, providing buyers with a place to call their own and an opportunity to invest in their future. 

Whether you’re a UAE national or an expat, there are a variety of options available to help you find the right property in the right area for your needs.

With careful planning and preparation, you can find the perfect home in the perfect location at a price that fits within your budget.

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Adam is an internationally recognised author on financial matters, with over 748.2 million answer views on Quora.com, a widely sold book on Amazon, and a contributor on Forbes.

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