Sign in
Sign up
When moving to the UAE, for example, to Dubai, it is quite difficult to choose housing because of the many properties on offer. First of all, you need to decide what you are looking for, whether it’s a house or an apartment. To understand which property in Dubai is better for purchase, you need to compare both options and assess your needs.
Content:
- Types of Real Estate, and their suitability for
- Demand Trends
- Apartment and House Comparison
- Conclusion
Types of Real Estate, and their suitability for
Urban lifestyle enthusiasts or professionals who need to live close to the workplace often choose apartments in Dubai for permanent residence.
Families with children, pensioners, and people who live more secluded lives and desire more freedom prefer spacious houses.
Demand Trends
In the May 2022 report of the real estate consulting company, Asteco, villas, and houses remained the leading demand. Switching to remote work during the coronavirus pandemic led tenants to look for more spacious spaces, which increased the demand for villas in the suburbs. As a result, rental rates in Arabian Ranches and Dubai Hills rose by 47% and 48% year-on-year, respectively. Currently, the focus is still on houses. A limited number of offers increased rental rates and accelerated the process of buying real estate.
The annual rental growth in the Dubai villa market in the first half of 2022 averaged 25%, while the average apartment rental rates increased by 14%.
Prices also grew in 2022, especially in the villa segment. The average quarterly increase in value was 5%, and the average annual increase was 40%. The high demand for villas led to a rise in apartment sales, which increased in the first quarter of 2022 by 5% compared to the fourth quarter of 2021 and by 22% compared to the first quarter of 2021.
Apartment and House Comparison
Both villas and flats have their advantages. To determine which housing is right for you, let's analyze their characteristics.
Space
Houses are more spacious than apartments. Unlike the latter, they include a plot of land, a private garden, a swimming pool, a children's playground, and private parking, making them advantageous for families with children and pets.
When moving into a flat, you have to face limitations regarding space, privacy, and parking spaces.
Return on Investment
Depending on the area, the return on investment in houses and apartments may differ. Flats are more profitable, with an average return of 5.5 to 10% per year. The yield of the villas varies from 4 to 5.61% per year.
These are the areas of Dubai with the highest apartment yields:
- International City – 10%;
- Barsha Heights – 10.1%;
- The Greens – 10.2%;
- Al Warsan – 10.8%;
- Dubai Studio City – 10.9%.
Dubai's most profitable districts with detached houses:
- Meydan City – 5.32%;
- The Lakes – 5.36%;
- Mudon – 5.41%;
- Reem – 5.60%;
- Green Community – 5.61%.
Prices for Houses and Apartments in Dubai
Prices for villas are higher on average than for flats. The average cost of apartments in Dubai in May 2022 was AED 1,340,000 ($364,821, ¥2,447,951). The average price of villas in the same month was AED 4,500,000 ($1,225,146, ¥8,220,733).
Expenses
Owners of private houses in Dubai, as a rule, pay more than apartment owners. This is due to the larger area of the property. The house has higher electricity and water consumption, especially in summer and if the territory has a swimming pool and garden.
Utility costs in Dubai:
| Water | Air conditioning | Service fee to the management company RERA | Electricity | |
|---|---|---|---|---|
| Houses | On average, AED 900 ($245, ¥1,560) per month | From AED 257 ($70, ¥445) ‒ AED 440 ($120, ¥762) in summer to AED 147 ($40, ¥254) ‒ AED 257 ($70, ¥445) in winter | From AED 3 ($0.8, ¥5.2) to AED 30 ($8.1, ¥5.2). The amount of the fee depends on the area, so this cost item will be higher for houses. | 20 Fils (1/AED 100) per unit of electricity |
| Apartments | On average AED 600 ($163, ¥1,040) per month |
In addition to the above, a private house has extra costs:
- cleaning of drinking water tanks – from AED 478 ($130, ¥828) ‒ AED 918 ($250, ¥1,590) annually;
- pool cleaning/lawn or garden maintenance – AED 3,670 ($1,000, ¥6,350) annually.
Atmosphere
Houses have more space and are closer to nature. The air in cottage settlements is cleaner, and they are far from any noise pollution. You will have a free-standing house hidden inside a garden and away from the hustle and bustle of the city, with all the benefits of living in a community. Flats cannot provide you with the same level of privacy and freedom.
Conclusion
Choosing a house or villa is a matter of personal taste, needs, and financial capability. If you are in doubt about which option is better, you can receive professional support from an Emirates.Estate specialist! The consultant will help you choose the right property for you, answer all your questions, and assist you to buy real estate in Dubai profitably and safely.
