Note: This is a sponsored article by Emirates.estate.
Dubai’s strategic location makes it an attractive destination for not just tourism, but also for investment. Its positioning as a city-state with a stable political environment, low taxation, and a business-friendly ecosystem makes it a conducive destination for investment. These factors also make Dubai a major tourist destination, attracting millions of visitors each year.
Many wealthy investors consider buying apartments in Dubai by the sea for the luxurious amenities and stunning views. If you’re looking to join the ranks of those investors, then it’s important to understand the market before plunging in. The article delves into the importance of location, views, and overall property quality. It also examines external factors such as the economic climate, political stability, and environmental concerns.
What’s the location?
The oft-repeated mantra of real estate investing is location, location, location. Everyone has heard that phrase, but one only truly appreciates it after being burnt for ignoring it! Let’s take a further look at the important factors, so that you do not repeat these mistakes.
Is it on the first line, with a view of the sea, or is it away from the beach?
Property location is crucial when buying real estate near the sea in Dubai. The Dubai Marina area, for example, is a popular location for beachfront properties and has a mix of expatriates and locals. Expats come from across the world, but tend to be primarily from from European and Asian countries. A multicultural community in the area can attract those who prefer a cosmopolitan lifestyle.
Dubai is known for its beautiful beaches, and properties near the sea offer stunning views and a relaxing atmosphere. The Palm Jumeirah, for instance, is known for its luxurious beachfront villas and apartments that offer breathtaking views of the Arabian Gulf. Properties located near popular tourist attractions or the beach can therefore provide a potential source of rental income.
According to recent data, properties on the first line in Dubai have an average selling price of AED 8,500 per square foot, which is significantly higher than properties located farther from the beach. Properties located away from the beach sell at a much lower price of around AED 4,500 per square foot.
Additionally, properties with a sea view have a higher rental yield than those without. Dubai sea view properties can generate up to 7 to 9% rental yield on the higher cost base! In contrast, properties without a sea view yield 6%.
Properties within walking distance of the beach have higher values than those that require transportation to the beach.
Shops, restaurants, banks, educational institutions
Apart from aesthetic appeal, proximity to essential services can also influence the decision to purchase a property near.
In Dubai, properties within a five km radius of popular shopping centres, such as the Dubai Mall or the Mall of the Emirates, have a higher asking price than properties located further away. Additionally, properties near healthcare facilities, such as the American Hospital or the Dubai Healthcare City, have higher demand from buyers and renters.
Finally, properties located near highly-ranked schools, such as Dubai College and the Indian High School, have a higher asking price than properties located elsewhere
Infrastructure – Accessibility & Quality are important
Infrastructure quality naturally plays a role in property values. Areas with well-maintained roads, reliable utilities, and efficient public services will naturally have higher demand from buyers and renters alike.
Luckily, Dubai has great infrastructure, so this is perhaps not as big an issue as other countries. Nevertheless, it’s important to pay attention to the accessibility of public transit. Even though the metro system is large and growing, not all locations have access to speedy transit.Properties located on the green and red lines, which reach all major residential and commercial areas in the city, will carry greater values and command higher premiums for rent.
Another critical aspect of infrastructure is accessibility. Areas that are easily and quickly accessible from key business districts, airports, and ports attract more investors and businesses. It can drive up demand for properties in the area.
Technological amenities are also important factors for potential buyers.
The presence of security measures such as guards, CCTV surveillance, gated access, or intercoms greatly influences property purchase decisions.
Condition of real estate
The age and condition of the building, availability of repairs, equipment, and technical equipment are all very important factors in the valuation of a property. Newer properties will of course command premium valuations.
However all old properties are not bad. The condition of a real estate property plays a significant role in potential buyers’ decision-making, especially when buying a property by the sea in Dubai. Firstly, the age of the building is crucial as older buildings tend to have more wear and tear, leading to higher maintenance costs.
Additionally, the state of the building’s maintenance can positively or negatively impact the property’s value and appeal. Dubai’s hot and humid weather conditions, along with the frequent sandstorms, can deteriorate building infrastructure faster than in regions with milder climate. Therefore, regular maintenance is essential, and property developers who offer such after-sales services have a higher chance of selling their properties.
According to Bayut, the most sought-after amenities for a beachfront property in Dubai include a swimming pool, gym, and beach access. Many developers invest in community amenities such as parks, schools, and shopping centres to create a complete living experience for their customers.
Don’t forget building maintenance fees, land taxes, and utilities
The up front prices are not the only factor to look at when buying real estate. Many other factors add up to the all-in cost of carrying a property.
A critical consideration is the annual cost of property maintenance, which can range from 3-5% of the property value. It includes landscaping, cleaning, and security fees. Also don’t forget the “normal” operating costs such as taxes and the cost of utilities.
Similarly, financing cost is also an important factor. Properties that are not in good condition, or have trouble being rented out, or are in an odd location may attract higher cost of financing. Naturally banks do not want the additional risk of an investor being unable to make the mortgage payment on their property.
Dubai’s seaside property investment attracts many buyers. With high rental yields, capital appreciation potential, a strategic location, and a strong economy, investing in beachfront property in Dubai could be a wise choice for long-term gains.
The government’s continued efforts to attract investors through various initiatives and policies have made investing in Dubai’s real estate market even more appealing. These initiatives include allowing 100% ownership of properties in designated areas and granting residency visas for property owners. These incentives provide a favourable investment climate for buyers, further increasing the desirability of properties in Dubai.
In conclusion, a beachfront property in Dubai offers a luxurious lifestyle and a lucrative investment opportunity with the potential for significant long-term gains. Say goodbye to low returns – invest in real estate with guidance and enjoy high yields for years. Discover the benefits of property investment by exploring the website and making informed decisions today.