What does it cost to buy a house in Dubai?
Currently, Dubai’s real estate market is showing strong signs of sustained growth as it undergoes an accelerated rebound. Buying a house in Dubai has become a popular choice for many people. As a result, the property sector offers a wide variety of properties, including beachfront villas, luxurious penthouses, apartments, and townhouses. Whether you’re a resident or a foreigner, you can own a house in Dubai without any restrictions.
Property experts in Dubai suggest now is a good time to buy a house because property values are expected to steadily increase in 2023-24. When it comes to buying a house in Dubai, it remains one of the most attractive options. Because Dubai’s property prices are unbeatable compared to other cities, foreign buyers flock to Dubai in droves.
Dubai property costs
Global consultancy Knight Frank reported that the average house price rose from AED 1,021 in January 2021 to AED 1,235 in October 2021. Nevertheless, prices vary depending on the region.
As per ValuStart’s report, villa sales increased by 20% in September, with 22 transactions totaling AED 30,000,000 registered, as the UAE is experiencing strong demand for villas and townhouses. In response to the 2020 lockdown, people are now seeking more outdoor space and gardens in their residential areas. Regarding brand-new apartments, demand is also high.
In Dubailand, Reemram offers luxury 2 and 2+ bedroom apartments with an average price starting at AED 700,000. At Remram, Dubai Properties offers luxury 2-bedroom apartments with all the luxuries of modern life, while living in the midst of nature.
The Mudon Views community offers one, two, and three-bedroom apartments as well as two-story duplexes, ensuring an active lifestyle thanks to its well-designed outdoor areas.
Dubai Properties has launched the latest residential development, La Violeta at Villanova. This impressive off-plan development in Dubailand (completion scheduled in 2025) features 3- and 4-bedroom townhouses with maid units starting at AED 1.45M. Family life will bloom here for generations to come, thanks to its optimized floor plans and elegant interior design.
Ready-to-move-in or off-plan?
There are advantages and disadvantages to both ready-made properties and off-plan properties in Dubai.
In a ready-to-move-in property, you get to inspect and check every detail and finish of the residence you intend to buy, so there are no nasty surprises waiting for you when you move in! In the case of pure investment, you can immediately rent out the property. When market prices spike, a completed property offers better returns. However, buying a ready-made home can also be frustrating. It is not just the price that is higher than that of an under-construction property but the down payment, which accounts for 25% of the total cost. It is also pertinent to remember that ready-made properties are usually pre-owned and might need some repairs or enhancements, which can add to their already high cost.
Off-plan or under-construction properties can sometimes be cheaper to purchase directly from the developer. The biggest advantage is that you are buying a brand new residence at a price 10-20% lower than a ready property. Generally, developers require a small down payment. Prices generally increase closer to completion. Off-plan projects can pose a number of risks, including the possibility that the project will take longer than expected or that market conditions will change during the construction process.
Costs that are not included
Remember that you are negotiating a starting point, not the final price, when buying a home and be aware of all the costs involved.
The Dubai Land Department requires that all purchases be registered within 60 days of the transaction, otherwise, they are considered void.
DLD charges 4% of the sale price.
Registration fees: AED 2,000 + 5% VAT
Agency fees: Real estate agents charge 2% of the purchase price plus 5% VAT
Conveyance fees: A licensed conveyancer who ensures all documentation, contracts, and financial arrangements associated with the transaction are legally valid must charge you between AED 6,000 and AED 10,000.
Initial deposit: A RERA registered broker must collect the deposit amount until the property is transferred to the buyer. The deposit amount can start at 10% of the purchase price.
Insurance charges: AED 1,000 for a home insurance policy. In spite of the fact that home insurance is not mandatory, it is highly recommended to obtain one. This is due to the fact that insurance offers protection against potential losses or damages, such as those caused by theft, accidents, fires, and natural disasters.
Service fees: Annual maintenance charges on a property are payable to the Dubai Land Department based on the RERA Service Charge and Maintenance Index and may vary according to each community. This amount is used for the upkeep of common areas of a building or community.
Your mortgage value should always be limited to what you can afford. As a rule of thumb, the monthly mortgage payment should not exceed 20 percent of your household income.
Ensure that the developer is punctual and reputable before making any purchase.