Most expatriates rent their housing in Dubai, but property ownership is increasing since the Dubai Government recently lifted restrictions on the purchase of property by foreigners. Expatriates can now buy property anywhere in Dubai on a 99-year lease, or on a freehold basis in specific areas which are designated for expatriate residence. Dubai property owners automatically receive a renewable residence permit for themselves and their dependents, which allows them to work in Dubai.

Property is currently selling for around $1,000 per square metre, a very low price compared to other cities; so many expatriates are seizing the opportunity to buy housing in Dubai both as a home and a longer-term investment.

The main housing options in Dubai are apartments and villas, some arranged in compounds with communal swimming pool and other leisure facilities. Some companies have their own compounds to house their expatriate employees. New complexes are being developed all the time, many of which offer luxury accommodation, smart technology and leisure facilities.

The most popular residential areas for western expatriates are Jumeirah, Umm Suquiem and Safa. These are upmarket, expensive areas, located between the coast and the Sheikh Zayed Highway, south of the Dubai Creek. One of the newest and largest developments is the Palm Island resort. Other new developments targeted at expatriates include the 20-storey residential tower at The Waterfront, Andalucia villas at Emirates Hills, a Spanish-style villa development with beautiful landscaping, and Jumeirah Beach Residence, which is to consist of 35 residential towers.

More reasonably priced villa accommodation can be found in Satwa and in Garhoud, while apartments are mainly found in the Bur Dubai area, the Sheikh Zayed Road and, at lower cost, in Deira, Satwa and Karama. The lower cost property areas of Rashidiya, Mirdif, Al Barsha and Al Quoz are also becoming increasingly popular with western expatriates who are looking for reasonably priced accommodation.

The mortgage market in Dubai is not well developed, but there are opportunities for expatriates to obtain property loans from local lenders such as Amlak, who offer up to 90% of the purchase price to UAE residents, up to a maximum of Dhs 5 million. The loan is payable over a maximum of 15 years for non-UAE nationals. Borrowers have to be in full-time employment and must be able to meet the repayments using no more than 55% of their monthly salary. For Muslims, property loans of up to Dhs 150,000, payable over 12 years, are available from the Dubai Islamic Bank. Major local and international banks may also offer finance for the purpose of buying property in Dubai. Many property developers have links with financial institutions that provide loans on satisfactory evidence of at least three month's salary and a recent bank statement.

If you are buying a new property, you are likely to have to pay a 10% reservation deposit, with subsequent payments to be agreed with the developer and made in advance of completion of the development. There are no property purchase taxes in Dubai, but you may have to pay municipality tax to contribute to the funding of public services.

To rent property in Dubai, you will generally be asked to pay a whole year's rent up-front, or with up to four post-dated cheques, and a refundable security deposit of up to Dhs 5,000. There will also be a fee of around 5% payable to the estate agency if used. Most properties are rented out unfurnished, but furnished accommodation can also be found.

Typical annual rental costs are around Dhs 50,000 for an unfurnished apartment, and between Dhs 110,000 to Dhs 265,000 for a 3-bedroom villa, depending on quality, location and facilities. Utilities costs are normally additional, and bills are sent out every month depending on usage. There may also be maintenance charges for communal facilities, and you may be asked to pay municipality tax, usually 10% of the rent. Landlords are not allowed to increase the rent during the contract period, normally one year, and there is currently a limit of 15% on the amount of any increase on renewal of the contract.

It is quite easy to find a house or apartment to buy or rent in Dubai, because there so is so much residential development, with new properties constantly becoming available. You can find details of available properties via a large number of real estate agents who advertise in the classifieds sections of local newspapers, and online, or direct from property developers who also advertise widely. Houses and apartments for rent are also often advertised by private owners on supermarkets noticeboards.

Added 18/01/2006 courtesy of I.Malik:
Additionally newly developed & very desirable areas include Jumeirah Islands, Meadows, Arabian ranches.

Added March 2007 by Prof M.L Arora:
If someone is interested in buying a property in Dubai, in many cases you need to pay between 15%-30% and the rest can be financed by financial institutions. 50% to 60% deposit is not required.