Comparison of Buying Property in Dubai and Bahrain

Over the past decade, Dubai and Bahrain have both experienced exceptional growth of their real estate market, becoming two immense and sustainable investment hubs in the Gulf. Both offer diversified potential and enormous infrastructure, attracting the attention of regional as well as foreign investors. However, although sharing territorial proximity and investment-conducive legislation, there are inherent differences between the two in terms of property legislation, prices, administrative processes, and return on investment. That is which every investor should be familiar with.

If you wish to invest in the Gulf real estate market, you must have heard Dubai and Bahrain’s names hundreds of times. Both of these destinations, with unique charm of their own, are leading the list of destinations for property buying. In this Dxboffplan article, we shall give you an in-depth, thorough, and comparative analysis of Dubai vs Bahrain real estate, making your investing process easy.

Real Estate Market of Bahrain

The Bahrain property market has completely transformed over the recent years. Legalizing the total foreign ownership of buildings in strategic locations, increased construction activity, enhanced infrastructure, and the vast tourism boom have put Bahrain on the list of regionally new and upcoming property markets. In contrast to before—when there was focus on small-scale developments—local and international firms are building communities with multinational brands. This has increased the worth of property and enhanced the quality of life.

In addition, there is an extraordinary boost in Bahraini investors’ confidence such that they are now majority contributors to market transactions. This not only brought more stability into the market but also reflects an optimistic and bullish market attitude. Last but not least, the improved infrastructure and rapid development of tourism are good omens for Bahrain’s real estate market’s future—a future where investment for use and investment for gains is guaranteed.

Dubai Real Estate Market

Dubai’s most active and fastest-growing Middle East real estate market maintains its special position among investors from Russia, India, Britain, and other countries of the Arab world. That its turnover rose 40.5% to $21 billion during the first quarter of 2017 says volumes about its popularity. Dubai not only set up an investment platform but also an international city to stay and operate from, its unparalleled quality of life, facilities for all, world-class infrastructure, and quality accommodation facilities.

To all of this is added the sheer number of real estate developments and the presence of the world’s finest local and global brands. There is also compliance with best international building codes that have placed Dubai among the world’s and region’s premier unrivaled real estate investment paradises.

Legal Distinctions in Property Ownership: Dubai versus Bahrain

If you are about to choose between Dubai and Bahrain for property investment, you first need to know about their legal and regulatory differences. Here is a closer look:

Foreign Ownership

As a foreign investor you are only allowed to buy property in  UAE Freehold zones. Those districts include Dubai Marina, Palm Jumeirah, and Downtown Dubai. They are developed aiming to attract foreign investors as much as possible with their incentives and infrastructure. Bahrain has a different story as you can buy property in most locations in the country.

Kind of Property Ownership

Most Dubai ownership transactions are performed in the leasehold agreement. where the land is not owned by the buyer but the buyer has the right to occupy the property for a specified period of time, in Bahrain freehold ownership is also common, where the investor owns the property and the land.

Approved Property Registration

All property transactions need to be registered in Dubai with the Dubai Land Department (DLD). The official registration is necessary to safeguard the rights of the owner. In Bahrain, registration is done by the Survey and Land Registration Bureau. The procedure is the same but the laws, charges, and time period are different.

Other Fees and Property Taxes

An advantage of Dubai is that it has no direct residential real estate taxes. There are a few more, however, such as title deed registration, annual service charges, and real estate agent commission. Similarly, Bahrain has no direct taxes for buying a property except stamp duty and municipality.

Mortgage Options and Financing

Both nations have available mortgage facilities. It is offered by local banks, but the loan period, down payment, interest rate, and repayment period vary. It is easy to finance in Dubai for international buyers, but it is available from some banks in Bahrain for residents or those who meet specific requirements.

Cost of Buying Property: Dubai versus Bahrain

One of the most important factors in the decision to lease or buy a property is the price comparison in various cities. For instance, Dubai’s cost of living, specifically when it comes to housing, is much higher than Bahrain’s. Dubai city center monthly rents are 140% to 185% higher compared to Bahrain. This huge difference must be considered when it comes to financing. Here’s a closer look to Dubai vs Bahrain property prices:

These figures illustrate that when it comes to Dubai vs Bahrain real estate, Dubai offers more space for luxury and long-term investment. Bahrain is a far more affordable option as far as buying and rental prices are concerned. For those investors with smaller capital or simply for the purpose of higher rental returns, the Bahrain market might be the smarter choice. Nevertheless, for those targeting branding, instant capital appreciation, and luxury developments, Dubai will remain the choice.

Rental Yields Comparison: Dubai vs Bahrain

For those investors entering the market in the hope of renting their property out later, here is the rental yields comparison of Dubai vs Bahrain:

Dubai vs Bahrain: Impact of Property Purchase on Residency and Visa

Investment in property in Dubai and Bahrain is not only an investment in their real estate sector but a serious means of securing residency.

In the UAE, buying property worth a minimum of 750,000 AED entitles you to a two-year residence visa. For property worth 2 million AED or more, the investor and his/her relatives may be granted a 10-year UAE Golden Visa. All this is completely legal and is carried out through official registration with the Dubai Land Department.

In comparison, Bahrain offers residency through property investment of a minimum of 50,000 Bahraini Dinar and offers long-term stay extension or even permanent residency provisions. The Bahrain residency is simpler, more laid-back, and friendly to small budgets, a competitive advantage—especially for investors who are considering mid-range and affordable properties.

Advantages of Buying Property in Dubai

An investment in real estate in Dubai offers exposure to a stable economy with international market access and well-developed infrastructure. Also, the diversity of projects and the opportunity for residency or a Golden Visa are two of the strongest selling points. Let us delve deeper into these benefits:

International Market Access and Economic Stability

Dubai property investment means accessing one of the strongest property markets on the globe. The city has European, Asian, and North American property investors and is a bridge between the East and the West. Providing economic security, transparent laws, sophisticated infrastructure, and pro-foreign-investment government policies.

Contemporary Infrastructure and Multiple Options

Dubai offers unparalleled diversity in projects that vary from high-end apartments in signature towers to beach-front villas and top-class commercial properties. Dubai’s proximity to international schools, top-class healthcare facilities, and recreational amenities also makes Dubai an ideal city to live and work in.

The Disadvantages of Buying Property in Dubai

The drawbacks of Dubai property purchases include the high cost of services, registration, and maintenance charges. In addition, high competition in renting can be a disadvantage to the return on investment. Let us discuss these problems in greater detail:

• High Costs and Indirect Taxes: Dubai does not impose a direct property tax, but fees like registration fees, transfer tax (4%), building service fees per year, and real estate agent fees might be a lot.
• Competitive Rental Market: Some locations suffer from oversupply in Dubai. The owners might not receive the kind of ROI they expected in weak demand areas.

Advantages of Buying Real Estate in Bahrain

When it comes to Dubai vs Bahrain real estate, there are a couple of things you needs to explore:

Lower Costs and Simpler Process

Bahrain city center and suburban areas are much cheaper compared to Dubai. The buying and registering process is also very rapid and straightforward.

Peaceful Setting and Safe Market

In contrast to Dubai’s unpredictable market, Bahrain provides a more stable scene. This is a key selling point when it comes to Dubai vs Bahrain real estate. For investors looking for returns that are stable and a less risky market, Bahrain is great.

Disadvantages of Buying Property in Bahrain

Let’s address the disadvantages of Bahrain property investment:

• Smaller Market and Limited Opportunities: Compared to Dubai, Bahrain’s property market is smaller, and there are fewer high-end projects or international brands in development currently.
• Decreased Returns on Individual Projects: Demand for rentals may be low in some places, especially in less developed areas, and the desired returns may not be forthcoming. Picking the right location in Bahrain is thus important.

Difference Between Buying Property in Dubai and Bahrain

Dubai vs Bahrain real estate is all about different benefits, limitations, and possibilities. These must be balanced in relation to your investment goal, budget, and short- or long-term perspective. Dubai, being a city of well-developed infrastructure, international market, and desirable residency, is the appropriate place for investors seeking branding, good returns, and diversification of projects.

On the other hand, Bahrain, being less costly, with a stable market and less bureaucratic legal procedures, is a suitable place for investors in search of secure investments with a medium- or long-term focus. Here is a summary of all the points we explored:

Ultimately, the decision is based on the investments’ individual priorities and requirements. We at Dxboffplan, have direct access to the latest projects and top developers and are willing to offer free and professional consultation. Contact us today for the latest Dubai property prices and set yourself on the way to intelligent investment in Dubai’s global real estate market.