The prices of Dubai properties can shift either way. So it is imperative to consider the factors that influence the property value. However, there are always some critical basis and grounds that make the price of the property increase or decrease. and more information about Top Factors That Influence The Price Of Dubai Real Estate.
How the factors are divided into two categories?
There are plenty of reasons that motivate the price to increase. However, on the other side, the fall in value also has many reasons. The factors can be categorized into two sections.
First, that is directly associated with the property include general condition, location, and status of the real estate market. The second factor is that the property owners do not control them directly, such as covid-19 or government development.
So before you invest in real estate in Dubai, you must have thoroughly understood how Dubai real estate works. In this article, we have jotted down Top factors that influence the price of Dubai real estate.
The most important factor determining the price of a property in Dubai is the economic condition. A country or a state with a powerful and stable economy will have a higher property value than any underprivileged nation. Overall the economic situation of Dubai is very stable and strong that’s why most of the properties in Dubai are of higher value.
Usually, the value of the properties is expansive in developed economies is because people are making a good income and are financially stable. People with decent salaries can pay sky high prices and fees.
Countries with high unemployment rates will always have falling property values. And there are many reasons to support the cause.
First, Unemployment creates uncertainty and a lack of surety about the future. Also, when a person is unemployed, he doesn’t have enough purchasing power to buy a new home or property. The lack of interest, unpredictability and low purchasing power tends to fall in the price of the property.
Talking about Dubai specifically, it has the lowest rate of unemployment. Both expats and permanent residents are making good money. As a result, more people show interest to buy property in Dubai while prices get high.
Weakening US Dollar
The US dollar is one of the major factors that significantly affect property prices. We have noticed on various occasions that whenever there is a rise or fall in the US dollar, the Dubai property market shifts.
For instance, from the end of Q1 2014 until the beginning of 2017, the US dollar showed massive appreciation in value by 29 percent, resulting in a decline in Dubai’s residential property value.
In contrast, from the beginning of 2017 to April 2018, the circa strength is 12 percent. In addition, we noticed that demand for Dubai real estate market increased in this period.
One of the key contributing factors is the location. Dubai is a massive cosmopolitan city, and you will find people from almost every race, color, and tradition. Also, in Dubai, you can find different kinds of homes. From luxury villas for sale in Dubai to apartments for rent AL furjan, you will have the plenty of options to choose.
One of the prime factors that influence the price of a property in Dubai is the location. Might be the current location you are living in is the best option for you because it just takes a few minutes to reach the office. Or the children’s school is just a few kilometers away.
But when it comes to appraisers that value the property based upon different factors. If you are curious to learn about the factors so you can calculate the value of your home. You may go through the points below.
Factors That Determines House Value
- The quality of local schools
- Employment opportunities
- Proximity to shopping, entertainment, and recreational centers
The key points we have mentioned above are among the reason why few locations have higher demand than others. In addition, airports, public transport, and highways also play a vital role in influencing the price of a property.
Last but not least, if you buy home in Dubai where you can find all these facilities at a reasonable budget, then you are truly the luckiest person.
Supply and Demand
Supply and demand always play a critical role in determining the price of Dubai properties. Like any other industry, when the demand increased, the price also increased. When it comes to the Dubai property market, more buyers show interest in buying a home, and the price of the property will rise. And there will be more opportunities for real estate agents in Dubai to receive a commission. On the flip coin, if there are no buyers in the market, the price will fall.
Condition and Age
This strategy does not apply to the Dubai property market but the overall property market across the world. The newly constructed places are expensive and highly valued. This is because the new house has almost everything newly constructed from roof to electrical and plumbing. Also, they will have a longer life span and will take several years to break down.
Learn Better With The Example Below
Take, for example, if you buy a house in Dubai that has just been developed and has a warranty of about ten years. It means for ten years, you don’t have to say a single penny to maintain the roof. But, on the other side, you buy house Dubai that was constructed 20 years ago. And there was no maintenance done for the last 20 years. That means a lot of maintenance work needs to be done. That is why expats and foreigners always prefer to buy home in Dubai that is recently constructed.
Availability of Funds
The overall Dubai real estate market is expensive. So most customers buy properties for sale in Dubai by borrowing money from lending institutions. Such lending institutions include banks, investment banks, insurance companies, brokerage firms, etc. If these lending institutions create easier policies. More people will be interested in borrowing loans and buying real estate in Dubai.
Contrastingly, if lending institutions are inflexible with their policies, fewer people will borrow money. As a result, people will not have enough funds to purchase the property. Therefore, property owners have to decrease the price to attract buyers.
Updates and Upgrades
The advancement also determines the price of a property in Dubai. For example, if your house is in bad condition, the property’s value will be less than the home with the best facilities.
You can increase the value by kitchen remodel or adding a full bathroom for small homes. And for large homes adding a pool or wood floors can raise the property value.
Dubai property is one of the most preferred properties by the investors from the investment point of view. This is because, for the last decade or two, Dubai has been one of the fastest growing markets, which mean investors can expect great returns in term of profit.
However, Interest and mortgage rates are important to consider. If the interest rates are high, there will be a decline in property demand that will directly reduce the price of the property.
What is the Interest rate in Dubai?
In recent times, Dubai’s interest and mortgage rates have been at an all-time low. That allows investors to buy even at a expensive price and still achieve high returns on rental income.
Dubai has always been a top pick for investors, with yields far more attractive than what you can expect from other markets. When you add in a low interest rate on top of that, it leads to a winning investment proposition.
Besides the top factors that influence the price of Dubai real estate, we have mentioned above. There are many factors that affect the property’s price. For instance, due to the Covid-19, we have noticed a decrease in property value. This is due to the fact; that there were almost no buyers in the market.
So whether you are buying or selling a property in Dubai. You must have done enough research to get the best price. Consider these variables when setting a price for your house to attract buyers and avoid long days on the market, which cost money. Or you may get in touch with the top real estate companies in Dubai. They will give you a clearer understanding of how the property market works.
How Time homes real estate can assist you with pricing?
If you are looking for the top real estate agents in Dubai, you must visit Time homes real estate. They have been working in Dubai property industry for several years. In addition, they have also helped lots of expats to buy their dream home in Dubai I hope you understand Top Factors That Influence The Price Of Dubai Real Estate is here.