Cost of Housing In Dubai: Finding The Right Option In 2023

If you are looking for the perfect place to call home in Dubai in 2023, we are here to help. We understand that finding an affordable 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. The flourishing economy of Dubai and its high quality of life have led to huge housing demand in the city. Before finding the right home, it is important to understand the different housing options and their cost, so let's explore them.

Types of Housing in Dubai 

Apartments

Apartments are the most popular housing option in Dubai. They are a great choice for people looking for low-cost living 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 and stunning views mean that penthouse apartments are considerably more expensive than conventional apartments. Dubai Marina, Jumeirah Lake Towers and Downtown Dubai are some of the desirable areas to own a penthouse. 

Duplex Apartments: These two-story apartments offer more space and separation between living areas. Duplex apartments can be found on any floor of the building, unlike a Penthouse. 

Serviced Apartments: These furnished apartments come with additional services like regular housekeeping. 

Villas

Villas are one of the most luxurious and expensive housing options in Dubai. 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. 

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. 

Co-living Spaces

Co-living spaces are popular among young professionals looking for affordable living without compromising quality or amenities. They are smaller than apartments but still offer all the necessary facilities, such as Wi-Fi, laundry services and housekeeping staff.
 

Shared Accommodation

Shared accommodation is one of the lowest-cost housing options available in Dubai. They primarily consist of single bedrooms that are rented out separately within an apartment or villa. In this way, tenants enjoy privacy while paying far less than renting an entire apartment. Shared accommodation is great for people on a tight budget who don't mind sharing their living space with others.

Average Cost Of Housing In Dubai

Here is a breakdown of the associated costs of renting and buying a property in Dubai.

Rental Costs

Apartments

The average monthly and yearly rental costs for an apartment in Dubai are as follows:
 

Villas

The average rental price for villas in Dubai are:

Townhouses

The average rental prices for townhouses in Dubai are:

Additional Costs Of Renting A Property In Dubai

When renting a property in Dubai, it is important that you consider the following additional costs that you may incur. 

Security Deposit

Renting a home in Dubai requires a security deposit, typically 5% of the annual rent for unfurnished properties and 10% for furnished ones. This deposit safeguards the landlord against potential damages and is refundable at the end of the tenancy, minus deductions for damages.

Agency Fees

When renting in Dubai, expect to pay an agency fee of 5% of the annual rent (+5% VAT) to a reputable real estate agency. They will help you find a suitable property at a competitive price.

Ejari Registration

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

• 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 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

This fee is refundable, but non-refundable activation charges apply:

• Meter 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, usually included in the DEWA utility bill for residential properties.

Chiller Fees

Certain Dubai properties with shared central air conditioning systems have chiller fees based on unit size. Cooling services in Dubai are provided by Empower and Emicol.

Sales Prices

Apartments

The average sales price for an apartment in Dubai according to its types are:

Villas

The average sales prices for various types of villas in Dubai are:

Townhouses

The following table provides an overview of the average sales price of townhouses in Dubai.

Costs Of Buying A Property In Dubai

As well as the purchase price, there are a number of 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

It is important to use a reputable real estate agency when buying a property in Dubai because they will help you find a suitable property at a good price. 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 entire purchase process, including all of the legal and administrative requirements, whilst keeping you updated at every step. This is a worthwhile investment to ensure that you don't encounter any issues, and will typically cost from AED 5,000 to AED 10,000.

Mortgage Fees

If you are financing the purchase using a mortgage, you will incur the following costs:

• Mortgage Arrangement Fee: 1% of the loan amount + 5% VAT
• Property Valuation Fee: From AED 2,500 – AED 3,500 + 5% VAT

Factors Influencing Housing Costs in Dubai 

The cost of housing is influenced by factors such as: 

Economic Conditions: Economic conditions are one of the main drivers of housing costs in Dubai. When the economy is doing well, there tends to be an increase in demand for real estate that drives up prices. On the other hand, during an economic downturn or recession, prices tend to decrease as demand for properties falls. 

Supply and Demand: Supply and demand also play a major role in influencing housing costs in Dubai. If there is higher demand for properties than available supply, then prices will rise as buyers compete with each other for the limited number of properties. Conversely, if there is more supply than demand, prices will decline as owners try to attract potential buyers with lower prices.

Location and Amenities: Location plays an important role in determining housing costs in Dubai. Areas close to shopping malls, schools, beaches and public transportation are more expensive than those further away from amenities due to their greater desirability among tenants or buyers. Moreover, areas with attractive views also have higher prices due to their aesthetic appeal. 

Government Policies and Regulations: Government policies can have a significant impact on the cost of real estate. Changes in property laws, visa regulations, and foreign ownership restrictions may impact the demand for property and subsequently affect prices.

Tips for Finding Affordable Housing 

Finding affordable housing in Dubai in 2023 can be challenging, but these tips could help you reduce your housing costs while still 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

Conclusion - Housing Costs In Dubai In 2023

In the vibrant real estate market of Dubai, finding suitable accommodation demands a strategic approach. With rising property prices fueled by economic growth and huge demand from expatriates, understanding the different housing options and associated costs is essential. From apartments to villas, co-living spaces to shared arrangements, diverse choices cater to various needs and budgets. 

The right planning is crucial, considering factors such as security deposits, agency fees, and governmental charges. While Dubai offers a plethora of great housing options, using a reputable real estate agency, doing diligent research, and fully exploring your options are pivotal in securing an affordable yet quality home in this dynamic city.
 

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