House prices in Dubai
House prices in Dubai
Check how much you need to buy a property in Dubai with all the expenses involved
Dubai property guide
How to find your real estate agency in Dubai
How to get a mortgage in Dubai
Dubai property investment risks
Property prices trend in Dubai
Property market in Dubai is more attractive than ever as the real estate sector bounces back from a major correction, with plenty of choice for homeowners and investors.
As one of the Middle East’s most stable and successful cities, Dubai is a vibrant hub for business, entertainment and leisure. Dubai is situated in the United Arab Emirates, which consistently ranks amongst the top ten countries preferred by expat workers , attracted by the luxurious lifestyle, high earning potential and tax-free income offered by the country.
In the past, investing in Dubai properties was a near-guaranteed way to grow wealth at an accelerated pace. Following the drop in oil prices in 2014, however, the real estate sector in Dubai has undergone a lengthy correction with significant decreases in buying and renting prices, for villas and apartments alike. A strong comeback from the pandemic and Dubai’s reputation as a safe haven have resulted in a renewed demand for Dubai properties and an increase in estate prices.
In 2021, Dubai witnessed its highest ever volume of real estate transactions in a single year. Q1 2022 was the emirate’s best quarter since 2010, and ultra-prime sales have reached new records as well. There’s still room to grow. According to data from Knight Frank, values are still on average about 25% below their 2014 peak, though villas have performed better and are now only 12.9% below the last market high in 2014.
Supply is catching up to meet demand. 37,000 residential units were delivered in Dubai in 2021. Knight Frank forecasts additional supply of 100,000 new units by 2025, of which 25% will be villas. Overall, 50,000 homes are due to be completed by the end of 2022.
With strong government initiatives to attract new residents and healthy demand for real estate, the time for homeowners and medium-to-long term investors to switch their attention back to the property market in Dubai is now.
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A Buyer’s Market
Before the market rebound in 2021, real estate prices in Dubai had softened considerably as a result of the crash in oil prices and oversupply of units. The UAE government, Central Bank and real estate developers alike introduced a slew of policy changes and flexible payment schemes to revive interest and attract buyers.
Government initiatives to encourage property sales
In recent months, the UAE government has introduced several new initiatives to make home ownership more attractive to expat populations. Expats or foreign investors who invest AED 1 million in property in Dubai can secure a three-year visa, and those who invest upwards of AED 2 million in the country can secure a five-year or ten-year visa. These figures are significantly lower than the previous AED 5 million and AED 10 million requirements. Meanwhile, expats over the age of 55 who invest AED 2 million in property can secure a five-year retirement visa. Retirees who apply for a visa through DLD can secure the same with an even smaller investment. The Central Bank of UAE has also lowered the required down payment for first-time buyers by 5%, to support an uptick in real estate sales.
Real estate developers too are introducing innovative schemes to incentivize home ownership. For example, one developer offers a business trade license upon purchase of property in a specific community, and some developers are offering rent-to-own schemes that eliminate the need for a down payment.
The impact of Expo 2020 on real estate in Dubai
Many speculated that property prices would go up when Dubai won its bid to host the prominent business event Expo 2020, and to some degree this is true. When Dubai was announced as the winner in 2013, the market was immediately flooded with positive sentiment, leading to an increase in property prices for both residential sales and rentals, and the announcement of multiple new large-scale real estate projects. The property market in Dubai peaked shortly thereafter, in Q2 2014.
Re-scheduled to October 2021 to March 2022, Expo 2020 attracted a remarkable 24 million visitors – just shy of the 25 million target it had set pre-pandemic. The investments and interest around Expo 2020 have opened up several new opportunities in real estate in Dubai.
First, it had been the focus on affordable housing, to cater to the new recruits who are from the low-to-middle income strata. New affordable neighbourhoods have emerged in Dubai South (the site of Expo 2020), and existing affordable neighbourhoods such as Dubai Silicon Oasis and Jumeirah Village Circle have surged in popularity.
Second, has been the expansion of the Dubai Metro. The extension to the existing Red Line of the metro, known as “Route 2020,” was first announced in 2015 and completed in 2021. The new line boosts connectivity and provides easy access to affordable neighbourhoods like Dubai Investment Park, Discovery Gardens and Al Furjan. The route will eventually extend beyond the Expo2020 site and connect to the Al Maktoum International airport, and is expected to service 275,000 users a day by 2030.
New neighbourhoods to discover
A snapshot of prices in popular Dubai neighbourhoods
Prices vary significantly across different neighbourhoods in Dubai. According to latest Properstar and Property Monitor data, the average price per square foot for villas in April 2022 range as follows:
• AED 2,997/sqft in the famous Palm Jumeirah • AED 1,187/sqft in popular villa community Arabian Ranches • AED 817/sqft in affordable hub Dubai Silicon Oasis • AED 597/sqft in the upcoming affordable neighbourhood of Dubai South (site of Expo 2020)
Average price per square foot for apartments in April 2022 range as follows:
• AED 2,932/sqft in Downtown Burj Khalifa, the world’s tallest building • AED 1,324/sqft in the new Al Habtoor City towers which overlook Dubai Water Canal • AED 1,289/sqft in expat hotspot Dubai Marina which overlooks the marina and is popular for its nightlife • AED 1,024/sqft in expat hub Jumeirah Lakes Towers which is popular amongst singles and families alike • AED 874/sqft in affordable community of Jumeirah Village Circle • AED 605/sqft in affordable hub Dubai Silicon Oasis
Dubai’s apartment prices pale in comparison to global hubs, where the average price per square foot is much higher. Using data from Numbeo , Dubai’s average upmarket buying price for city centre apartments is USD 359/sqft as compared to London’s USD 1,576/sqft, New York City’s USD 1,389/sqft, Mumbai’s USD 623/sqft and Toronto’s USD 938/sqft.
Resilient neighbourhoods with high rental income
In general, properties in popular expat hotspots such as Dubai Marina and Downtown Dubai can demand comparatively high rental value and experience stronger capital gains over time. In comparison, affordable housing communities command lower rental value and experience slower capital gains – but can cater to larger volumes of people (depending on the number of vacancies in the particular community). For example, Jumeirah Village Circle, Dubai Sports City and Dubai Silicon Oasis are popular amongst budget-minded renters.
Annual residential rents can range from AED 130,000 – 180,000 for a two bedroom apartment in Dubai Marina, to AED 50,000 to 72,000 for a similar unit in Dubai Silicon Oasis. Tools such as Property Monitor’s Rental Index and the Dubai Land Department’s Rental Calculator can offer insight into average rents across Dubai.
Find bargain property in Dubai
Things to know before you buy
Every market has different rules around purchase of property, and this applies to Dubai as well. For starters, expats and foreign investors can only purchase properties in free hold communities of which there are plenty in Dubai (all the communities mentioned above are free hold). Rules and fees vary for purchase of completed properties / transfer of properties and for off-plan properties, and for commercial and residential properties. For example, commercial properties are subject to a 5% VAT while residential properties are VAT-exempt.
For purchase of existing properties in Dubai, the following standard fees apply on top of the listed price:
- 2% fee to real estate agent / broker (unless buying directly from the developer)
- 4% transfer fee to Dubai Land Department authority (typically split between buyer and seller)
- approx. AED 4,000 fee for registration of property (for properties over AED 500,000 in value)
- approx. AED 500 fee for title deed
Thus all the purchase expenses for a flat in Jumeirah Lakes Towers 430 sq feet (40 square meters) with price AED 425,000 will make AED 8,500 of agent commission, AED 17,000 - a transfer fee + AED 4,500 for property registration and title deed. At the end you'll pay AED 30,000 additionally to the property price. And that's quite reasonable, as no VAT is paid.
The process of buying property in Dubai has become increasingly streamlined and regulated in recent years as the market matures. From the hunt for the perfect property to the registration of your property and the on-going management of the property/tenants, an abundance of professional brokers and management services are at your service.