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Feb 5, 2023

Real Estate Investment in Emirates and Turkey: Advantages and Challenges

Many Arab and foreign investors want to invest their capital in projects that generate fixed incomes annually at increasing rates, and a large number of them prefer to distribute their investments outside the borders of their home country, due to political or economic reasons, or according to their vision that there are other markets in which they can invest. Markets witnessing remarkable economic growth and encouraging government facilities, and at other times the investment is for the purpose of obtaining residency or citizenship from a specific country.

In this article, we review the topic of real estate investment in the United Arab Emirates and the Turkish state, and the advantages of investment in these two countries, comparing the facilities provided by their governments to attract people to invest and operate capital, and the expected returns that investors receive annually in both countries.

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Real estate investment in the United Arab Emirates:

After the issuance of the law on property ownership for foreigners in Dubai, all expatriates can buy and own a property in Dubai. Some areas of Dubai are characterized by a high return on investment compared to other areas, due to their important location, pioneering projects, and the availability of public transportation and service facilities par excellence, which makes them more... A request for buying and selling. There are specific areas in Dubai that enable Arab and foreign expatriates to own a property in Dubai. These places are known as freehold areas, and their properties vary between apartments, villas, etc. Examples of these places are: Dubailand, Arjan, Business Bay, Al Barsha, Downtown Dubai, Discovery Gardens, and Dubai Centre. Global Financial and Dubai Marina.

Privileges that investors get in Dubai:

  • Investors in designated free zones have full ownership of their investments. 
  • Investors have the full right to own property in more than 122 commercial activities and 13 sectors of the state and within its territories. 
  • Profits returns of up to 100%. 
  • The state offers several advantages for obtaining real estate residency in the Emirates, It launched the “10-year Golden Residency Visa”.

The matter of selecting a property also depends on its purpose, whether for investment or residence. There are various properties in Dubai, including apartments, villas, and townhouses, that suit everyone’s requirements and needs.

Since 2020, real estate investors have become eligible to obtain long-term residence visas. Those who have real estate investments of up to 5 million dirhams can now apply for a 5-year visa. Real estate investors can also sponsor their family members and give them this long-term visa, which It is an attractive point for investing in real estate in Dubai.

Some things to pay attention to before owning or renting a property in Dubai:

Everyone who wants to buy or rent a property in the United Arab Emirates must know that he needs to pay some expenses in advance, and this is not limited to paying a down payment “a deposit” when buying a house, but there are also administrative expenses that cannot be avoided. These expenses Additional fees may significantly increase the true cost of purchasing a home, which is why they should be taken into consideration when making the decision to buy or rent.

  • Additional costs: The initial costs that come with purchasing before ownership in Dubai. For example, those who buy real estate directly from the real estate developer need to pay a mandatory fee to the Dubai Land Department, which amounts to 4% of the value of the property, title deed issuance fees, management fees, and all of that. It needs to be paid in advance. 
  • Current laws require homeowners to make a down payment of no less than 25% of the value of the property when purchasing for the first time in the Emirates. 
  • The tenant is required to pay some costs in advance, for example: Some real estate owners in Dubai require the tenant to pay the annual rent. You must pay an annual maintenance fee if you buy or rent a house in Dubai. 
  • Maintenance fees for a three-room house in Dubai range from 70 to 100 thousand dirhams annually, according to estimates from The National newspaper. 
  • Periodic Fees: The tenant will pay an annual fee for documenting the lease.

Therefore, real estate investment experts in the United Arab Emirates advise expatriates who plan to live in the Emirates for a period of more than 15 years to take advantage of the advantages of purchasing real estate. This advice is based on the fact that the expatriate may have to pay an amount of up to 40% of his monthly income for rent, because it is calculated... The property's area is in square feet, not square metres.

Real estate investment in Turkey:

Real estate investment returns in Turkey are considered very high, compared to other types of investments. It has recently witnessed interest from all investors around the world, due to the fact that Turkey is a tourist country visited by thousands of tourists annually, in addition to the facilities provided by the Turkish government to foreign investors, and Turkey also offers an encouraging return. In exchange for investing in its lands, such as obtaining Turkish citizenship in exchange for a real estate investment of $400,000, or obtaining a real estate residency that is easily renewed in exchange for purchasing a property worth $200,000.

Why are the returns on real estate investment in Turkey the best?

  • Real estate investment is one of the most successful types of investment in Turkey, as real estate prices witness increasing prices annually, especially those belonging to projects that are still under construction, as their price can rise by an average of 35%.
  • Government support for real estate projects and providing many facilities to the foreign investor. 
  • The real estate market in Turkey is witnessing a renaissance. A large urban development, and great projects are growing in it that are in line with international and European standards. 
  • Obtaining Turkish citizenship in exchange for a real estate investment of $400,000, whether one apartment or several apartments totaling the same amount required to obtain citizenship. 
  • There is a fixed annual increase rate imposed by the Turkish government on rented properties. It is in the interest of the investor. 
  • The property can be resold after obtaining Turkish citizenship, when three years have passed since ownership of the property. 
  • The percentage of returns on real estate investments may reach from 200% to 400%.

Comparison between real estate investment in the United Arab Emirates and Turkey:

  • Turkey grants Turkish citizenship to the investor when purchasing a property for a minimum of $400,000, while the United Arab Emirates does not grant citizenship to the investor. 
  • Obtaining real estate residence permit in Turkey when purchasing a property for a minimum amount of $200,000, renewed easily every two years, and the possibility of traveling and returning without the need for an entry visa. The United Arab Emirates grants an entry visa for a period of five or ten years. 
  • Turkey does not require payment of a specific percentage of the property price in advance, and the property can be purchased in installments according to the agreement with the real estate company, while the Emirates requires payment of 25% of the price of the house. 
  • Lease contract in Turkey It is notarized once for a small fee and does not need to be renewed again. The UAE requires that the lease contract be renewed annually with high fees. 
  • The Turkish government imposes annual fees for ownership, which the owner pays to the municipality, and does not impose specific fees for maintenance in the event of purchase or rental. The UAE requires specific annual fees for maintenance in the event of ownership or rental. 
  • The Turkish government does not require paying the full rental fees to the owner for a year in advance, but It requires paying insurance fees for the property at a specific rate to the owner. 
  • In the UAE, landlords often require paying annual fees in advance for rent in addition to maintenance costs at a fixed, pre-determined amount. 
  • In Turkey, real estate prices are cheaper due to the decline of the Turkish lira against the US dollar, while the UAE is more expensive due to the stability of the price of the UAE dirham against the US dollar.

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