UAE property buyers to pay higher upfront as banks stop financing DLD & brokerage fees
Some banks used to roll DLD and agency fees into the mortgage. That's changing — and it raises the cash you need on day one. Here's what to plan for.
Buying property in Dubai has always come with additional costs beyond the property price — such as Dubai Land Department (DLD) registration fees and brokerage commissions. Traditionally, some UAE banks would include these costs in mortgage financing, making it easier for buyers to manage their cash flow.
However, the latest market update indicates that UAE banks have now stopped financing DLD and brokerage fees, meaning property buyers will need to pay these charges entirely upfront.
What does this mean for property buyers?
This move has a direct impact on affordability and upfront financial planning. Here's what buyers should know:
- Higher initial payment. Buyers now need cash for not only the down payment but also the full 4% DLD fee and the 2% brokerage fee (on average).
- More savings required. Previously, including these fees in financing let buyers spread the cost over the loan term. Now, buyers must ensure they have adequate liquidity before committing.
- Impact on first-time buyers. First-time investors and end-users may feel the pinch most, as they often rely heavily on mortgage financing to cover all costs.
- Market stability factor. Analysts believe the change could filter out speculative buyers and ensure more financially stable investors enter the market.
Example of the cost impact
Assume you're buying a property worth AED 2,000,000:
- Down payment (20%): AED 400,000
- DLD fee (4%): AED 80,000
- Brokerage fee (2%): AED 40,000
How can buyers prepare?
- Plan early: factor in all fees when calculating affordability.
- Build a savings buffer: have funds set aside beyond your down payment.
- Negotiate brokerage fees: some agents may be flexible with their commission.
- Seek expert advice: a mortgage broker can help structure your financing in the most cost-effective way.
Final thoughts
The decision by UAE banks to stop financing DLD and brokerage fees marks a significant shift in Dubai's real estate landscape. While it increases the upfront cost burden, it also promotes a healthier, more stable property market by encouraging buyers to be financially well-prepared. The key takeaway is simple: plan your finances carefully, save more upfront, and work with professionals who can guide you through the new process.