Due to its highly lucrative nature, the real estate prices in Dubai are constantly rising. For example, there is a 12% rise in the prices of Villas in Dubai when compared with the prices in Jan 2023.
Therefore, whether you’re an investor, a homeowner looking to sell, or someone interested in buying a new home, knowing the value of a property is crucial.
However, the problem is that factors like market trends, property conditions, community, and lack of negotiation skills can all affect the value of a property. Ultimately, the only way to ensure accuracy is getting property valuation from an accredited and authorized institution.
In the text to follow, we will discuss all you need to know about property valuation Dubai. Let’s start from the basics.
What is Property Valuation in Dubai?
Property valuation is a process through which sellers/buyers determine the current market value of a particular property. Also known as real estate appraisal, it is an essential step in property trade and helps both parties make a deal on mutually agreeable terms.
Factors such as the property’s location, condition, age, size, and market value of similar properties affect the valuation. In Dubai, real estate agents, certified valuers, and DLD (Dubai Land Department) carry out property valuation.
Uses of Property Valuation in Dubai
Beyond obvious uses like buying or selling a house, there are other cases when property valuation in Dubai becomes essential. Some examples include:
a) Better Investment Decisions
Investors don’t always purchase a property to live in it. An accurate property valuation allows investors to gauge the appreciation potential and rental income they might be able to generate.
b) Debt Financing
Lenders often appraise properties before approving a mortgage or loan for real estate. Property valuation allows them to determine whether the amount being borrowed is justifiable or not.
Let us now take a look at the options you can use to request Dubai property valuation services.
Benefits of Property Valuation in Dubai
In Dubai, property valuation is beneficial in ways that are hard to ignore. Apart from calculating a property’s worth, it can help you with other aspects such as:
1. Resolution of Property Disputes
A documented valuation before the sale/purchase of a property can protect both parties from legal disputes. It can also help support claims in a court of law if the other party behaves fraudulently.
2. Debt Financing
Lenders often appraise properties before approving a mortgage or loan for real estate. Property valuation allows them to determine whether the amount being borrowed is justifiable or not.
3. Rental Income Potential
Investors don’t always purchase a property to live in it. An accurate property valuation allows investors to gauge the rental income they might be able to generate.
4. Evaluation of Property’s Profitability
The income capitalization approach of property valuation allows investors to estimate the value of a property based on the income it will generate. Therefore, whether it is a rental property or a property bought with the intent to sell, accurate valuation helps determine its rate of appreciation and income trend.
5. Evaluation of Pros and Cons
A property valuation report outlines many aspects of the property that help you weigh its pros and cons. It includes details like location, structural integrity, market worth, location, benefits, and pictures. This information helps make better buying decisions.
Three Different Methods of Dubai Property Valuation
In Dubai, institutions like DLD offer property valuation services. You can also hire independent real estate agents to appraise properties for you.
However, regardless of the platform you choose, there are 3 distinct methods of property valuation. They are as follows:
a) Sales Comparison Method
In this method, the value of the property is determined by comparing it with similar properties sold recently. Also known as the “market data approach”, this method has certain criteria for comparison with another property. The criteria are:
- Compared property must be similar to the subject property in its size, location, and features
- It must have been sold in the last year in the open market
- It must have been sold under the normal market conditions
b) Cost Method
The cost method is used when one or more buildings have been added to a particular property. This method calculates the value of the land and the building(s) separately while accounting for depreciation. In the end, the separate values are added to estimate the total worth of the property.
Many investors prefer this approach because they don’t want to pay more money for an improved property instead of purchasing land and developing a similar structure at the same (or lower) cost.
Generally, this method is used for properties that don’t generate income and are rarely sold (schools, churches, hospitals, government buildings, etc.).
c) Income Capitalization Method
The income capitalization method takes into account the potential return a property promises.
It is useful for investors who want to purchase a property that generates a consistent and viable income. Examples of such properties include residential units/complexes, hotels, office buildings, shopping malls, etc.
Factors Affecting Property Valuation Dubai
Whether you want to purchase or sell a property, you must have a clear and thorough understanding of the factors that affect its valuation. Some of these factors are controllable, while others are not. Let’s take a look at these factors:
1) Condition and Age
A well-maintained and newer property will be worth more than an older one. That’s because an older property may require more frequent maintenance and renovations.
2) Market Trends
Generally, when there are more buyers than sellers, the value of properties in that region will rise. Therefore, it is recommended to consider market trends when purchasing/selling a property.
3) Size
The greater the square footage and usable space, the more a property will be worth. Additionally, aspects like more bathrooms and bedrooms will also increase a property’s value.
4) Location
Lastly, the property’s location plays a significant role in determining its value.
If it has commercial zoning, it will be worth more compared to the properties with residential zoning. Similarly, proximity to schools, shopping malls, parks, or city centers will also raise a property’s value.
Requesting Property Valuation Dubai Using DLD
Whether it is land, a villa, or an apartment, requesting property valuation through the Dubai Land Department is one of the easiest and most accurate options.
The DLD has developed smooth processes to assist you in property valuation and help you determine applicable taxes, mortgage value, and other related aspects.
Property valuation through DLD also helps you determine estimated ROI and market value projection in the future.
Let’s dive a little deeper into how you can go about requesting DLD property valuation in Dubai.
1. Documents Required: Requesting Property Valuation Dubai
The basic documents required for requesting property valuation from DLD are as follows
- Letter from the owner
- Filled property valuation request form
- Copy of the owner’s Emirates ID or passport
- Copy of the planning map or municipality
However, besides the basic documents mentioned above, you may also need to submit the following documents depending on the property type.
For a vacant land designated for a real estate project (or its different stages)
- Sale/purchase agreement
- NOC from the bank or the building developer
For a residential project or a residential building
- A detailed document listing the number of residential building units/villas
- Built-up construction area
- Ejari permits for each unit/villa you want to appraise
- Expense statements for the last three years
For a hotel building
- Hotel management contract
- Details like room rental value, halls, restaurants, and facilities on the premises
- Built-up construction area
- Expense statements listing net profits over the last three years
- Tax letter from Dubai municipality
Additionally, when you’re purchasing a property on mortgage, you’ll also require mortgage registration from DLD. Lastly, you can use DLD to request property lease valuation when looking for a rental apartment.
2. Property Valuation Dubai—Fees
Let us take a look at the fees for property valuation in Dubai, which depend on the property type.
Valuation fees for residential vacant lot
- AED 2,000
- AED 180 + VAT (service partner fees if requesting valuation from real estate services trustees centers)
Valuation fees for a large-scale real estate project (or its stages)
- AED 10,000
- AED 430 + VAT (service partner fees if requesting valuation from real estate services trustees centers)
Valuation fees for a residential apartment or a villa
- AED 4,000
- AED 230 + VAT (service partner fees if requesting valuation from real estate services trustees centers)
Valuation fees for a hotel building (including its land)
- AED 15,000
- AED 530 + VAT (service partner fees if requesting valuation from real estate services trustees centers)
Additionally, you will need to pay AED 10 as innovation fees and AED 10 as knowledge fees when requesting property valuation in Dubai (residential or commercial) from DLD.
3. Property Valuation Dubai—Payment Methods
You can use the following payment gateways to pay the fees for Dubai property valuation using DLD:
- ePay
- Cash
- Credit or debit cards
Requesting Property Valuation Using Dubai REST App
In addition to DLD, you can also request property valuation in Dubai using the Dubai REST app (iOS and Android). The process is the same for requesting the valuation from Real Estate Service Trustee Centers.
Let us take a look at the process in detail:
- Start by logging in to the Dubai REST app or creating a new account
- Choose the property valuation service
- Submit the required documents and details
- Submit fees using the preferred payment method
- Wait for the DLD verification of documents and data
- After verification, you’ll receive an email stating the approval of the valuation request
- In 5-10 days, you’ll receive the valuation certificate via email
How Can Real Estate Agents Help with Property Valuation in Dubai?
Even though you can choose DLD or Dubai REST app to raise a property valuation request, an experienced real estate agent can help you significantly with the process.
Let us take a look at some key benefits of letting a real estate agent help you with property valuation in Dubai.
- Real estate agents are equipped with the latest real estate knowledge and market trends. This knowledge helps them determine the value of a property with greater accuracy.
- These professionals are also aware of the economic pulse, local changes, and interest rates, as all these factors can affect property valuation in Dubai.
- Real estate agents are expert negotiators. Based on factors like market trends, neighborhood, property condition, etc., they can help you negotiate a better price whether you’re selling or purchasing a new property.
- Moreover, real estate professionals are good at identifying hidden issues in a property that could decrease its value. A new buyer might overlook these things, but a real estate consultant will help you catch these things and negotiate a better price.
- Real estate agents can also prevent you from the headache that comes with a lot of paperwork. They’re well aware of all the processes, so handling paperwork and other legal technicalities of Dubai property valuation is easy for them. This saves your time, protects you from legal troubles, and gives you peace of mind.
FAQs
- How long does a property valuation take in Dubai?
After the application and submission of documents and fees, it may take anywhere between 5-10 days for you to receive a valuation certificate in Dubai.
- How much does it cost to get a valuation on a property?
Dubai property valuation cost ranges from AED 2000 to over AED 15000, depending on the type of property you want to get appraised.
- What can I expect from a property valuation Dubai?
Generally, property valuation includes relevant professionals visiting your property and analyzing things like location, condition, age, future development potential, community, security, and proximity to schools, hospitals, etc.
- How often should I verify the value of my home?
We recommend you verify your home’s value regularly to keep up to date with the latest real estate trends. This could protect you from being taken advantage of when it comes to selling your house.
Final Words
The process for requesting property valuation in Dubai is quite simple. You can choose DLD or Dubai REST app to apply for it. After the submission of documents and fees, you can get your valuation in just about 10 days.
However, with the help of an expert real estate agent, you can protect yourself even more from settling on the wrong price. At Orchid Homes, you’ll find real estate professionals ready to help you with Dubai property valuation.