The Cost of Buying a House in Dubai
Perhaps you have pondered on buying and renting a house in Dubai, as most people usually do, and you have decided to go for a home purchase as it appears to be a better investment based on your findings, but then you are uncertain and you want to know the cost of buying a house in Dubai. Your confusion is not very unusual, and that is what this article is set to address. We will unravel the intrinsic costs associated that buying a house in Dubai to make your task of home-buying an easy one.
You must understand that the decision to buy a house is a very crucial one, as it can cost millions of dollar here in Dubai. However, your resolve to buy a house as opposed to renting an apartment is quite commonsensical as it pays off in the long run and you do not get to offset someone else’s mortgage by way of rent payment.
Buy a House at Dubai Price– Should I Prepare for Additional Costs?
To accurately determine the actual cost of buying a house in Dubai, you need to factor in expenses on all the additional costs, the fees associated with procuring real estate in the United Arab Emirate at large. The sum of this value can increase the price of the house by some 10 percent.
Most assuredly, you will need ready cash in procuring a house. Nonetheless, if you want to know the cost buying a house in Dubai, you ought to calculate the total value beforehand, to estimate how much you can conveniently spend on the property itself. You need to mind the fact that you will pay running costs, such as yearly service fee for the developer and maintenance dues for management of your apartment. Water charges alone can elevate ongoing expenses to an unexpected level.
Besides, you have to get some money ready, as you might be asked to make an initial capital commitment of, say, 25 percent to secure the property you intend buying. You also need to take note of the compound interest cost. Should you be using a mortgage to finance the other parts of your purchase, you need to know what the compound interest amounts to over the period the loan will last, when determining the price of the house to buy.
Understand the Housing Market to Know the Cost of Buying a House in Dubai
In recent times, home buying cost seems to be increasing exponentially. That is because the various bodies and commercial organizations who keep raising their statutory dues, which the home-buyer cannot bypass. These agencies include the Dubai Land Department, the agreement lawyer, estate developer, mortgage institutions, and the real estate agents. All this professionals and organizations review their service fees and dues from time to time, and it has a direct telling effect on the price of a house in Dubai. For instance, if you are obtaining a house loan, the mortgage charges you are to pay will be determined by the type of loan you got. However, be it a standard loan or Islamic finance, you will need to pay additional charges.
What are the Factors that Determine the Cost of Buying a House in Dubai?
For a better understanding of how the housing market in Dubai works, for instance, you are taking up AED 2 million which you will pay in installments for 20 years, and you have been asked to pay some 5 percent over the 20 years as the average interest. Within the 20 years, you will have to repay an average of AED 3,167,788, and by that, you must have repaid about AED 1 million as interest only on the mortgage you obtained. Now after all this analysis, you must be asking yourself if it still makes any sense to buy a house in Dubai, but then when you compare the alternative of renting and do the calculations as well, purchasing a home always pay off, in the long run.
Now that you have been pre-informed on the intricacies surrounding the cost of buying a house in Dubai, let’s take a quick look at the expense of buying properties in Dubai:
Firstly, you will need to pay the transfer fee for the Dubai Land Department which is 4% of the value of the building, then the Abu Dhabi transfer fee which is 1 to 2 percent. After that, you will pay the registration fees which could be AED 2000 or AED 4000 depending on the property type. The mortgage registration fees are 0.25 percent of the interest while the mortgage processing fees could be up to 1 percent. In appropriate situations, conveyancing fees are AED 6000 while the valuation fees are fixed at AED 2500. The down payment is 25 percent of the total price of the house.
‘I want to buy a house in Dubai Price’ – Here is the complete process:
If you desire to know the cost of buyimg a home in Dubai because you are likely going to purchase one soon, then we got you covered. Let’s look at what it costs to buy a typical 2-bedroom apartment in Dubai Marina under a 7-year mortgage arrangement.
The total cost of the building is AED 2,000,000. The down payment at 2.5% is going to be AED 500,000 while the Dubai land development fees at 4% of property price will be AED 80,000. The broker’s fee at 2% of property price is AED 40,000. The mortgage processing fee which is 1% of the loan amount is AED 15,000 and mortgage registration fees 0.25% of loan fees is AED 3,500. The total up-front cost is AED 641,250 while the mortgage value is AED 1,500,000. The EMI on a loan tenure of 25years at 3.99% per annum is AED 7,500 and the total EMI payment for seven years is AED 663,600.Annual house maintenance charges for seven years is 140,000 and the total cost of buying spread over seven years -EMI and maintenance inclusive is AED 803,600.
Do You Need Help to Buy or Sell a House in Dubai?
You need real estate experts to guide you and make your home buying success as stress free as possible. Déjà Vu Properties helps you overcome the challenges that may arise when selling or buying a house in Dubai.
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