5 Major Factors that affect House Prices in Dubai

The current property value is frequently taken into account when purchasing or selling a home in Dubai. The health of the Dubai real estate market, location, and property condition are some of the elements that affect the values of real estate on either side of the price range.

According to a report by ASTECO UAE Real Estate Q2 2022, apartment supply increased noticeably in the second quarter of 2022, rising from 6,000 units in the first quarter to 7,000 units. Handovers of new luxury villas for sale in Dubai increased to 520 completed properties.

Property costs in Dubai are subject to change. Therefore, it is essential to take into account the variables that affect property value. However, there are always some important reasons and factors that influence whether a property’s price rises or falls. This article outlines the 5 major factors that affect house prices in Dubai.

1.  Location

Your current residence may be excellent for you since it is close to your parents’ home, your parents’ business, your school, or your local hospital. However, appraisers take location as an important consideration when buying an apartment or luxury villas for sale in Dubai. Close proximity to necessities including hospitals, entertainment areas, and shopping malls is usually preferred thereby increasing house prices of areas with good location.

Furthermore, the price of a property is also impacted by a location’s proximity to highways, utilities, and public transportation. Location is more important than size and condition when determining the cost of a home in Dubai.

2.  The Economic Situation

Given that Dubai has one of the most stable economies in the world, you should be aware that property prices there will be higher if you decide to invest in the market. This is so because in a strong economy, people have secure finances thanks to respectable wages and income. They can thus purchase real estate.

The majority of Dubai’s properties are more expensive because of the city’s generally strong and stable economy.Therefore, people who make a good living have a stronger buying power and can hence afford astronomical rates and fees.

3.  Unemployment

Property values will consistently decline in nations with high unemployment rates. And there are a lot of good reasons to back the cause.

First, unemployment breeds apprehension and a lack of confidence in the future. Additionally, a person without a job lacks the purchasing ability to invest in a new house or piece of land. The price of the property typically decreases due to lack of interest, volatility, and poor purchasing power.

Speaking specifically to Dubai, it has the lowest unemployment rate. Permanent residents and foreigners both earn well. As a result, more people express interest in purchasing real estate in Dubai as prices increase.

4.  Age and Condition of the Property

In general, new residences are expensive. The buyer may save money since essential components of the house, such as the roof, electrical system, plumbing, and appliances, are still brand-new and rarely disintegrated.

In comparison to an older home where the roof may need to be replaced in a few years. If a roof has a 15-year warranty, the owner will be able to save money for more than ten years.

Many property purchasers in Dubai will pay the maximum price for a home that is ready for immediate occupancy, thus buyers must insist on an inspection contingency in the contract. They will bargain for repairs so as to avoid significant post-sale fees.

Updates & Improvements

The cost of a house in Dubai is also based on advancements and upgrades done on the property. For instance, the value of your home will be lower than a home with the best amenities if it is in poor condition.

Remodeling the kitchen or adding a full bathroom can raise the value of small homes. Additionally, adding a pool or wood floors to a large home might increase its worth.

5.  Availability of Finance

The cost of real estate in Dubai is generally high. The majority of consumers therefore obtain financing from lending organizations to purchase real estate in Dubai. Banks, investment banks, insurance companies, brokerage firms, and others are examples of such lending institutions. if these financial organizations adopt more flexible rules. In Dubai, more people will be interested in taking out loans and purchasing real estate.

In contrast, fewer people will borrow money from lending institutions if their policies are rigid. People won’t have enough money as a result to buy the house. Therefore, in order to draw in buyers, property owners must lower their asking price.

Real Estate Overview in 2022

In spite of inflation, supply chain problems, and geopolitical tensions, Dubai kept defying the trend and growing, recording outstanding real estate growth rates.

The supply and demand for real estate in the emirate were increasing, according to Asteco’s UAE Real Estate Report Q2 2022.

Dubai Real Estate Supply Overview in Q2 2022

Conclusion

Prior to selling or purchasing a property, it is essential to understand its value. In addition to the ones we have just covered, there are numerous other considerations that determine the property price in Dubai. Working with an experienced real estate agency like Next Level Real Estate is therefore essential, especially when it comes to Dubai real estate. The expert team of agents have the knowledge and expertise to offer you the best and most valuable listing of properties, whether it’s an apartment or luxury villas for sale in Dubai.