Dubai is experiencing a proliferation of fresh ventures and advancements.
You might want to commit to some of the property undertakings! But, prior to doing that, consider conducting a property valuation of properties in Dubai.
Don’t know how to go about that? Worry not!
This guide will provide you with everything necessary to stay ahead of the learning curve on “Dubai property prices”.
We will discuss…
-the ways you can determine Dubai property prices(valuation);
-latest trends and highlights of the industry market in 2022;
-Answer the central question, “How to buy property in Dubai?”
Ways to determine Dubai property prices: (Valuation)
Sales Comparison Approach
The most common method, sales comparison determines the Dubai property prices or valuation, with the help of comparison.
You simply compare the property characteristics to other similar properties. This way you get to estimate a value for each and simply compared once the numbers are obtained.
To ensure accuracy, each comparable must meet certain criteria, including being similar to the subject property, sold within the past year in a competitive market, and under typical market conditions.
Size, features, and location of the subject property are important factors to consider when selecting comparables, as they can significantly impact its market value.
To get the value of an entire property, usually cost approach is deployed. It helps in estimating the value of a property that has been improved by one or more buildings.
The depreciation is noted after which the overall estimation is performed to get the value.
The cost approach ensures that a buyer must not pay more for an improved property than it would cost to buy a comparable piece of land and construct an equivalent building.
This approach is particularly useful for valuing properties that are not often sold and do not generate income, such as churches, schools, government buildings, and hospitals.
Income Capitalisation Approach
It is performed for properties that generate income like:
This approach is based on the relationship between the net income generated by a property and the rate of return required by an investor.
Market Analysis Approach
This approach is also known as comparative market analysis (CMA). This involves examining recently sold properties in the surrounding area that are similar to the property in question and using those prices as a benchmark. The CMA method might also consider the unique selling points that the property may have.
The main objective of the CMA is to help the real estate agent establish a fair and accurate price for the property.
The launch of new developments in an area can affect market trends, such as the introduction of a new hotel or tourist attraction that can boost popularity and impact demand and property prices in Dubai.
That’s why agents often consider market trends when determining Dubai property prices.
Neighbours & Neighbourhood Study Approach
Location matters–more if the property is present in Dubai!
But agents and ex-pats often overlook this important aspect while determining Dubai property prices. Developments surrounding a particular property also play a significant role in Dubai property prices valuation.
Let’s understand with an example!
If a property is located near an ongoing construction project that is expected to take a long time to complete, it can negatively impact the value of the property.
In the above case, developers are unlikely to set a high price for the property.
Similarly, if the property is situated near a noisy market or a household with loud neighbours, the value of the property may be adversely affected, and the seller may not be able to achieve a high price for the property.
Evaluation through Dubai Land Department Approach
We’re sure you didn’t think about this but, If you’re new to the real estate market and looking to buy or invest in a property in Dubai, you can easily request a Dubai property price or valuation through the DLD (Dubai Land Department) website or the Dubai REST App.
Dubai property prices trends & highlights
Record Breaking Sales
The Dubai real estate market saw a surge in sales in 2022, with a record-breaking $72.2 billion which amounts to 265 billion in Dirhams (Dh) in transactions(A 61% year-on-year increase). This was one of the most significant Dubai property price trend observed in the previous year.
The areas that recorded the highest sales transactions for villas and townhouses were:
The top three areas for apartment sales were:
Jumeirah Village Circle
In December, Al Arabiya English reported that the high Dubai property price trend forced many residents to move out of their homes to smaller properties or relocate to cheaper areas due to the steep rental prices outpacing their salaries.
Tenants relocated to more affordable areas due to significant year-on-year rental price increases, as reported by Allsopp.
In 2022, residents began to move back to the city, specifically into apartments, as prices in popular villa and townhouse communities continued to rise.
According to Allsopp, apartments were the most popular rental choice, accounting for 83.5 per cent of total rental contracts, while villas and townhouses represented 8.4 per cent of all rentals.
How to buy property in Dubai?
It is crucial to find the right real estate agent who understands your needs, is knowledgeable about legal procedures, and market conditions, and has a proven track record.
The buying process in Dubai is relatively simple – once both parties agree to the terms of the sale, they sign an Agreement for Sale/MoU and a 10% deposit is required as a sign of commitment.
The seller pays off any outstanding fees to the developer, and a NOC is issued to the seller.
A new title deed is then issued in the name of the buyer, officially transferring the property from the seller to the buyer.
The entire process usually takes about 30 days from the signing of the Agreement for Sale.
For off-plan purchases, a Sale & Purchase Agreement (SPA) is signed, indicating the expected completion date of the property.
After signing the SPA, an Oqood document is issued, which serves as a temporary registration until the buyer receives the title deed.
The Oqood fee is generally 4% of the purchase price. When the property is ready, the Oqood becomes a title deed in the name of the new owner.
Although you might think that you can determine Dubai property prices based on the aforementioned factors, it is not a prudent decision. Real estate agents possess vast knowledge of the property market and can use their resources and expertise to predict market trends and their potential impacts. Therefore, sellers should enlist the services of a real estate agent.
Not only can they help to determine Dubai property prices, but they can also assist in selling it swiftly and at favourable rates.
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