To Rent or to Buy, that is the Question.

Length of residency and down payment size are the two biggest factors when calculating the rent versus buy equation.

Recently Danube Properties showed their marketing might by plastering the major outdoor billboards with an advertisement that says “Lowest price in Business bay” & “Pay 1% per month”. There is a debate on the actual quality and artwork; with some stating that it is outright ugly while others say it is simple, in your face, it is spotted all over and so it works. But that apart, how does the mechanics of AED 6,490 per month only for your own apartment work? We will try to get to that shortly.

Azizi Developments then decided that they cannot be left in this race for eyeballs of the prospective home buyer.

It’s Better To Buy Than To Rent And It Probably Always Will Be Or at least until mortgage rates triple

So they went about and picked Downtown Jebel Ali and headlined it even more sensationally with “Starting AED 1,090 per month”! An average person in the UAE, will simply have to scratch their head, to completely fathom how this works. They say, what’s too good to be true, usually is. Hope this does not apply here. For, we are all working hard for our money and perhaps the developers are toying with our aspirations. But that’s the marketing game, sensationalize it, capture the attention and then dwell on the fine print as if it doesn’t matter.

Then we had Damac Properties, the developer best known for perhaps the world’s biggest offer, way back in the 2006 edition of the Dubai Shopping Festival in which they offered a Jaguar for every new home buyer and then a raffle draw to win a Eclipse 500 Jet! That was then, before the Great Recession. Now, Damac also has apartments starting from AED 599,000 and they still guarantee a luxury car during promotions.

The banks were not going to be left behind in this fun and frolic. So we have RAK Bank claiming to offer the “lowest home loan in town”. So, will this grand scheme of things work in swaying residents to buy instead of rent?

The common consensus we arrived at is that if you are living in Dubai short term, it is better to rent a property, whereas if you are here for the long term, it is worthwhile to purchase a home. However, this does come with high upfront costs such as the mortgage down payment (25 per cent of the property price if it is your first home in the UAE), Dubai Land Department fee, broker’s commission, mortgage processing fee, mortgage valuation fee and other admin overheads.

The below infographic published recently in Khaleej Times perhaps gives the best answer to the Million Dirham question.

The bottom line is: sometimes it’s smarter to rent, and sometimes buying can work in your favor. Rather than giving in to one side or another, it’s more helpful to learn the rules, crunch the numbers, then do what works—and feels right—for you.