Cost of Housing in Dubai: Finding The Right Option in 2024

If you are looking for the perfect place to call home in Dubai, we are here to help. We understand that finding a place to live in Dubai can be difficult. As one of the most sought-after cities in the world for people looking to relocate and invest in real estate, property prices have risen significantly in recent years. According to the Property Monitor, the property price in Dubai is AED 1,360 per square foot, which is 10.25% higher than the previous highest price in September 2014. The flourishing economy of Dubai and its high quality of life have led to huge housing demand in the city. So, let's explore and understand the different housing options and their cost in Dubai.

Types of Housing in Dubai and their Costs

Renting or buying a house in Dubai is one of the major expenses. But you can take control of this expense by choosing the housing option that fits your needs. The most common types of housing in Dubai and their costs are:

Apartments

Apartments are the most popular housing option in Dubai. They are a great choice for people looking to live at a low cost in an urban setting. The common types of apartments are:

Studio Apartments

One-bedroom apartments

Two-bedroom apartments

Three bedroom apartments

Apart from these common types, the other types of apartments are:

Penthouses

These luxurious apartments are on the top floors of high-rise buildings. Their premium location, luxury amenities, and stunning views make them more expensive than conventional apartments. Dubai Marina, Jumeirah Lake Towers, and Downtown Dubai are desirable areas to own a penthouse.

Duplex Apartments

These two-story apartments offer more space and separation between living areas. Unlike a penthouse, duplex apartments can be found on any building floor.

Serviced Apartments

These furnished apartments come with additional services like regular housekeeping.

Average Cost of Apartments in Dubai

Villas

Villas are among Dubai's most luxurious and expensive housing options. These large homes offer ample space and privacy and often have gardens or outdoor spaces. They are ideal for larger families or residents requiring more space than an apartment can provide. Palm Jumeirah, Dubai Hills Estate, and Arabian Ranches are some of the most desirable neighbourhoods to buy or rent a villa.

Average Cost of Villas in Dubai

Townhouses

Townhouses are another popular option in Dubai's real estate market. They are usually between two and four stories high and offer a middle ground between apartments and villas. They provide more space than apartments but at a lower cost than villas. Jumeirah Village Circle, DAMAC Hills and Al Furjan are popular areas to buy or rent a townhouse in Dubai.

Average Cost of Townhouses in Dubai

Costs Associated with Buying a Property in Dubai

There are some additional costs which you should consider when buying a property in Dubai.

Government Fees

All property sales transactions must be registered with the Dubai Land Department (DLD). This will incur the following fees:

DLD Fee: 4% of the purchase price + AED 580

Property Registration Fee: AED 2,100 for properties valued below AED 500,000 and AED 4,200 for properties valued above AED 500,000

Mortgage Registration Fee: 0.25% of the loan amount + AED 290 (only applicable if the home is bought using a mortgage).

Agency Fees

When buying a property, you should expect to pay an agency fee of 2% (plus VAT) of the purchase price.

Conveyancing Fees

A conveyancer will oversee the legal and administrative requirements, costing from AED 5,000 to AED 10,000.

Mortgage Fees

If you are financing the purchase using a mortgage, you will have to pay:

Mortgage Arrangement Fee - 1% of the loan amount + 5% VAT

Property Valuation Fee - From AED 2,500 – AED 3,500 + 5% VAT

Costs Associated with Renting a Property in Dubai

The additional costs which you should consider when renting a property in Dubai are:

Security Deposit

The security deposit is 5% of the annual rent for unfurnished properties and 10% for furnished ones.

Agency Fees

An agency fee is usually 5% of the annual rent.

Ejari Registration

Rental contracts in Dubai must be registered with Ejari, an online system introduced by RERA. During the Ejari process, the following expenses will be incurred:

Registration Fee - AED 100 - AED 120

Knowledge Fee - AED 10

Innovation Fee - AED 10

DEWA Connection

DEWA, Dubai's electricity and water service provider, requires a refundable connection fee at the beginning of your tenancy. The fee varies based on property type:

Apartments - AED 2,000

Villas and Townhouses - AED 4,000

Non-refundable activation charges also apply, such as:

Metre Connection Charges - AED 100 - AED 300

Registration Fee - AED 10

Knowledge Fee - AED 10

Innovation Fee - AED 10

Municipality Tax (Housing Fee)

Dubai Municipality imposes an annual housing fee of 5% of the property's annual rent. It is usually included in the DEWA utility bill for residential properties.

Chiller Fees

Certain Dubai properties with shared central air conditioning systems charge chiller fees based on unit size. Empower and Emicol provide cooling services in Dubai.

Tips for Finding the Right Housing Option

These tips will help you reduce your housing costs while getting quality accommodation.

• Use a reputable real estate agency. They can help you find a great property and negotiate the best price.
• Conduct thorough research into Dubai's different housing options and associated costs.
• Don't settle on the first property that catches your eye. Explore different neighbourhoods before making a decision.
• After finding a suitable property, negotiate the rent or the selling price to get the best possible deal.
• If you are on a budget, explore properties in Al Furjan, Discovery Gardens, or International City. These neighbourhoods also provide easy transportation access.
• Some property developers and landlords offer rent-to-own options, which means you can rent the home, and a portion of your rent payments will go towards buying the house later. Explore this option too.
• Join online forums, social media, or community groups to gain valuable insights, tips, and first-hand experiences from residents and experts.

Final Thoughts

Dubai's real estate market provides great opportunities for investors and diverse housing options for residents. The market is stable and expected to grow, and the government supports it. Investors and Residents should look at popular and up-and-coming areas and keep up with market changes to make the most of Dubai's growing real estate opportunities.