Dubai has a wide range of properties with different price ranges and within different real estate segments, where in addition to buying at full cost, you can also take advantage of mortgage loans, buying property under construction or under the rent-to-own scheme. But in order to calculate the minimum income that would allow someone to purchase real estate in Dubai, you will need to determine a strategy on how you plan to pay for the property by looking at whether you have the necessary amount for the initial down payment, as well as calculating the time and money needed to repay the mortgage. The year 2021 in Dubai saw a surge in activity in terms of mortgages, with a record-breaking value of transactions worth AED 127.8B (USD 34.79B). The previous highest number of mortgages was registered in 2017. This spike is caused by a reduction in the LTV for first-time buyers in the UAE, as well as historically low-interest rates, which can start at just 2.49%. Therefore, now may be the perfect time to consider taking out a loan. Banks evaluate the creditworthiness of an applicant based on the income of the applicant. In this article, we have calculated the minimum salary required for taking out a loan and included the most popular areas for property acquisition, to facilitate your transition from a tenant to a homeowner.

Why Invest in Dubai?

According to the World’s Best Cities Report 2021 by Resonance Consultancy, Dubai is the fifth-best city in the world, with particularly high scores in safety and its number of landmarks. Moreover, the city has been attracting real estate investors and end-users due to its proactive response to combating the pandemic, as the UAE applied a mass testing strategy and launched a nationwide vaccination campaign very early on. In fact, Dubai took the fifth position in the Ranking of the Safest Cities during the COVID-19 Pandemic for Q2 2021 by Deep Knowledge Group in London. Not forgetting that you can easily become a UAE resident through real estate investment in Dubai, with a minimum qualifying amount of USD 205,000. Furthermore, in 2020, during the COVID-19 pandemic, the UAE Central Bank reduced the down payment requirement for first-time property buyers by 5%, taking it to 20% for non-UAE nationals and 15% for nationals. Aimed at minimizing the financial burden on residents, the reduced payment, along with the previously mentioned low-interest rates, makes a mortgage deal much more profitable in Dubai. NBD! Throughout the article, we will use the USD currency when making calculations.

How to Calculate the Minimum Salary to Purchase Property

In this guide, we are making an assumption that you are planning to take out a home mortgage in Dubai and have a 20% down payment saved up already. Please note that at the moment first-time expat buyers in the UAE can borrow up to 80% of the property value. As well as that, your supposed mortgage tenure will be 25 years, which is the general term in the UAE. NBD! It is better to select the longest term possible since it will increase your borrowing capacity. Despite the fact that a longer term will increase the total interest to be paid back on the loan, it will minimize your monthly installments. If you choose to pay off the mortgage sooner than a specified term, you can always make additional payments (no more than 10% of the principal without penalty) during the course of the loan. As of Q1 2022, the average fixed interest rate in Dubai, and the entire UAE, amounts to 3.5%, which we will take into account in our further calculations. Next, we have to consider Equated Monthly Installments (EMI), which are applied both to principal and interest monthly, so that over a specific time period, the loan is fully paid off. In the majority of cases, the EMI amount does not exceed 25% of the monthly income. On top of the down payment, you will need to remember a range of upfront costs when buying a property in Dubai:

<ul><li>DLD fee of 4% of the property price.</li><li>DLD Admin fees – USD 157.9 for apartments and offices, USD 117 for land, USD 10.89 for off-plan property.</li><li>Registration fees for real estate priced below USD 136,200 is USD 544.5 + 5% VAT.</li><li>Registration fees for real estate priced above USD 136,200 is USD 1,089 + 5% VAT.</li><li>Mortgage registration fees are up to 0.25% of the loan amount + USD 79.</li><li>Title deed issuance – USD 68.</li></ul>

Not forgetting additional charges for property valuation and mortgage processing, which vary from bank to bank. Life insurance is also obligatory when taking out a loan in the UAE. Financial institutions can either increase their interest rate to cover the insurance premium every month or make you pay the policy in advance. On average, life insurance for a mortgage set at USD 272,000 costs about USD 29.4 per month. Our team of mortgage brokers at Metropolitan Premium Properties will help you to navigate the lending process and find a mortgage that ticks all the boxes. We work with some of the major banks in the UAE, including RAK Bank, Commercial Bank Dubai and Dubai Islamic Bank, among others. Therefore, our specialists have access to a large database of home listings and can find you a suitable property option in no time. Moreover, we will help you negotiate the best terms and interest rates quickly and efficiently. Our mortgage specialists will also gather the required documents, pull your credit history and verify your income and employment, to present your case to the lender in the most advantageous way.

What is the Minimum Salary to Take Out a Loan in Dubai?

It goes without saying that the minimum qualifying salary you require to purchase property in Dubai depends on a range of factors, including your preferred property type and the area of where it is located. The majority of financial institutions in the UAE have a minimum qualifying salary set at USD 4,000. Nevertheless, there are a number of banks which will consider applicants with a total salary of USD 2,750, such as Emirates NBD, while CBD requires a minimum monthly income of USD 3,300. That being said, Mashreq Bank offers the opportunity to apply for a loan to those earning USD 1,400. If your current salary does not reach any of the minimum averages mentioned above, you can still find a lot of options from other banks in the UAE. The status of employment should be either salaried or self-employed.

<ul><li><strong>NBD!</strong> The minimum salaries mentioned further in this guide are based on the average property prices in specified areas that were registered in the year 2021. Therefore, the amounts can vary depending on the chosen property and market conditions.</li></ul>

Minimum Income Required to Acquire Affordable Apartments

According to Bayut & dubizzle, the most popular areas for buying budget-friendly apartments in Dubai in 2021 included Jumeirah Village Circle, Jumeirah Lake Towers and Dubai Silicon Oasis. Average selling price (1-bed apartment) Down payment (20%) EMI (25-year tenure @ 3.5%) Minimum monthly salary When taking out a loan on apartments in the green communities of Jumeirah Village Circle and Jumeirah Lake Towers, a salary of USD 2,700 is pretty sufficient. As you can see, Dubai Silicon Oasis offers the most budget-friendly apartments, at an initial cost of USD 121,500. That being said, with an income of USD 1,500, you can easily afford a property in this area.

Minimum Income Required to Acquire Luxury Apartments

If you are considering upscale apartments, then some of the most sought-after areas are Dubai Marina, Downtown Dubai and Business Bay. Note: In Q4 2021, Dubai Marina witnessed the sensational launch of Cavalli Tower, the first Cavalli-branded tower in the world. Prospective real estate buyers can choose from an exclusive collection of 2-5 bedroom apartments for sale. Average selling price (1-bed apartment) Down payment (20%) EMI (25-year tenure @ 3.5%) Minimum monthly salary The waterfront Dubai Marina development and Business Bay, known for housing numerous global companies, are on the same level in terms of average property prices and subsequently, a qualifying monthly income of USD 3,300 is needed to sustain a loan. Meanwhile, the data in the table above clearly demonstrates that in order to take out a loan on a luxury apartment in the thriving area of Downtown Dubai, your income should amount to a minimum of USD 4,570. This makes properties in this area the most expensive option.

Minimum Income Required to Acquire Affordable Villas

For budget-friendly villas, areas such as one of the most family-oriented areas in Dubai Dubailand, Jumeirah Village Circle and DAMAC Hills 2 are the top-3 favorite options, thanks to an abundance of green areas and family-friendly amenities. Average selling price (3-bed villa) Down payment (20%) EMI (25-year tenure @ 3.5%) Minimum monthly salary

Minimum Income Required to Acquire Luxury Villas

In 2021, Dubai witnessed a huge boom in luxury real estate, with 54 upscale properties sold within the first 9 months of the year. You can acquire more information regarding trends in the emirate’s real estate market in this article. In particular, Palm Jumeirah, Dubai Hills Estate and Arabian Ranches remain the most searched for areas for those opting to acquire luxury villas. Average selling price (4-bed villa) Down payment (20%/30%) EMI (25-year tenure @ 3.5%) Minimum monthly salary NBD! You can benefit from the 80% LTV ratio if you are willing to purchase a property worth under USD 1,370,000. However, for real estate at a cost of over USD 1,370,000, the LTV is decreased to 70% for expats. Thus, when it comes to luxury villas in Palm Jumeirah, a down payment of at least 30% is required.

Can I Rent Out a Mortgaged Property in Dubai?

If you’re buying a property in one of Dubai’s freehold areas, then you can benefit from 100% property ownership for an unlimited period of time. This gives you the right to resell and lease a property whenever you wish to generate profit. That being said, we provide outstanding property management services, where we will find for you a tenant, handle the paperwork and maintenance, as well as follow up with rental payments on your behalf. Thus, you do not have to be physically present in the UAE and can enjoy 100% passive income.