The hidden risks UAE property buyers still overlook — even in a strong market

Anyone living in the UAE today can sense the energy around real estate. New launches fill up within hours, entire communities seem to appear almost overnight, and conversations across cafés and office corridors often drift into rents, returns, and which neighborhood might be “the next big thing.

However, strength creates its own blind spots. What many buyers do not realize is that even in one of the most stable, well-regulated, and fast-growing markets in the world, there are risks that do not always appear on the surface. These are not dramatic risks, but quieter ones that reveal themselves months or years after the purchase, when the excitement of the transaction has faded and the realities of ownership begin.

One of the biggest of these overlooked risks is the gap between projected rental yields and the returns that materialize. Buyers often hear figures of eight, 10, or even 12 percent. These numbers sound compelling, and in some cases, they are possible, but only under very specific conditions. In most real-world scenarios, yields shrink once furniture, vacancy cycles, maintenance expenses, service charges, agency commissions, and mortgage payments are accounted for. A property that appears to promise double-digit returns may produce five to six percent.

These details are not hidden, but they are not highlighted either, and many buyers do not run the full calculation before making a commitment. Service charges are another quiet but powerful factor that can reshape an investment. In some communities, service charges are modest; in others, especially waterfront districts or amenity-heavy master plans, they can reach very high levels. Over eight to ten years, this difference compounds significantly. Buyers often negotiate property prices at length, but very few spend adequate time understanding how service charges will impact net income. The result is a long-term mismatch between expectation and reality.

The off-plan market, although very well regulated and protected through escrow laws, carries its own form of risk. Construction delays are not common, but they do happen, and when they do, the financial impact is subtle but real. A one-year delay may not threaten capital, but it can mean a year without rental income, a missed appreciation window, and a postponed residency plan for those hoping to qualify for a Golden Visa. The protections are strong, but the opportunity cost is not covered by any regulation.

Another commonly misunderstood area relates to residency. Many buyers still assume that any property acquisition qualifies them for the Golden Visa. This is not the case. The minimum threshold remains Dh2 million, and mortgage rules, cash-contribution requirements, developer approvals, and joint ownership complexities often surprise buyers who discover these details only after signing contracts. These misunderstandings can lead to frustration and unnecessary restructuring in the future.

Liquidity risk is another quiet dimension of the market that is frequently overlooked. It is easy, during a booming cycle, to believe that a buyer will always be available when it is time to sell. However, resale behavior varies widely between property types and communities. Studio apartments may rent quickly but resell slowly. Villas hold value well but appeal to a narrower buyer base. Emerging communities may require many years before they reach the level of maturity that attracts consistent resale demand.

A good property is not always an easy property to exit, and this distinction matters. The rise of social media has added another layer of complexity. Real estate commentary has become widespread, and while some content creators are insightful and experienced, many are not. Oversimplified comparisons, exaggerated yield claims, and market commentary lacking context circulate widely. These short, engaging videos often shape buyer decisions far more than detailed research does. The challenge is that real estate decisions require nuance, while social media rewards simplicity.

A final blind spot that has appeared in recent years is related to ownership structures. Following the introduction of corporate tax, many investors rushed to set up Special Purpose Vehicles (SPVs) without fully understanding the implications. SPVs can be valuable tools, but they come with annual audits, accounting obligations, compliance requirements, and, in some cases, higher long-term costs. For many everyday buyers, an individual purchase with well-structured estate planning is actually simpler and more cost-effective. The complexity is not the risk; misunderstanding that complexity is.

None of these issues dilute the strength of the UAE market. In fact, the country remains one of the safest, most transparent, and most investor-friendly real estate environments in the world. Regulatory bodies are active, developers are increasingly sophisticated, and population inflows continue to create genuine demand rather than speculative surges.

However, strong markets can create a sense of immunity. When everything is moving upward, it is easy to believe that the details do not matter. But they do. They always have.

The risks in the UAE property market are not dramatic. They are subtle. They hide in assumptions, overlooked clauses, unasked questions, and the speed with which people sometimes feel pressured to act in a rising market. The encouraging part is that every one of these risks is manageable. A little more patience, a little more clarity, and a little more diligence can turn an ordinary purchase into a well-considered one.

Buying real estate is still one of the most meaningful decisions people make, financially, emotionally, and increasingly in terms of residency and long-term planning. In a market as dynamic as the UAE’s, the most successful buyers over the next decade will not only be the ones who acted early. They will be the ones who acted wisely.

Shweta Soni serves as the Head of Kairo Realty and Head of Licensing at MICS International, where she advises on real estate strategy, corporate licensing, and market entry across the UAE. Her dual expertise in property and regulation positions her as a trusted voice for investors and enterprises navigating growth, compliance, and opportunity in the region.