How To Choose The Right Luxury Property In Dubai?

However, choosing a perfect luxury property in Dubai is not an easy task. There are so many options. So, how do you choose the right luxury property in Dubai ? Don't worry. We've got you covered. Let's unlock everything step by step.

But wait. Before we look at the details of property finding, let's take a quick look at where the Dubai Luxury Property market is currently standing.

The Dubai Luxury Property Market

The 2023 was a record breaking year for Dubai's luxury real estate. And 2024 is off to an even better start. According to Knight Frank's property consultancy, Dubai's luxury property market soared to $7.6 billion in 2023, surpassing London and New York.

Throughout the year, sales in this price range rose by 91%, with nearly a third (28%) of the 431 transactions occurring in the final quarter.

Reports indicate that Dubai saw an unbelievable surge in luxury property sales. High-priced properties in that city were sold in the first couple of months of 2024, which brought in $1.7 billion to clock its total sales. It's not just a hike; it's continuous to that red-hot streak we've seen.

In Q1 2024, Dubai saw a 26% increase in the sale of properties worth more than $10 million vis-à-vis the same period in 2023. It is not odd, but it is part of a wider disposition that picks up pace.

The luxury property trends in Dubai are pointing towards more growth. It attracts buyers worldwide, using tax-friendly policies and world-class amenities for a classy lifestyle.

In terms of investment returns, the plot length really thickens. While standard properties offer durable ROIs, luxury property ROIs in Dubai typically put a jump on the average. High-end returns are around 6 to 7%, with some ultra-luxury developments reaching higher. To prove the difference between the ROI of a standard property and a luxury property, let’s take an example.

Property A	Property B
Price: AED 1 Million ,ROI: 8%	Price: AED 10 Million,ROI: 6%

Calculating the returns over 5 years	Calculating the returns over 5 years
Year 1 Return = Price x ROI= AED 1,000,000 x 8%= AED 80,000	Year 1 Return = Price x ROI= AED 10,000,000 x 6%= AED 600,00
Year 2 Return = (Price + Year 1 Return) x ROI= (AED 1,000,000 + AED 80,000) x 8%= AED 1,080,000 x 8%= AED 86,400	Year 2 Return = (Price + Year 1 Return) x ROI= (AED 10,000,000 + AED 600,000) x 6%= AED 10,600,000 x 6%= AED 636,000
Similarly	Similarly
Year 3 Return = AED 1,166,400 x 8% = AED 93,312 ,Year 4 Return = AED 1,259,712 x 8% = AED 100,777,Year 5 Return = AED 1,360,489 x 8% = AED 108,839	Year 3 Return = AED 11,236,000 x 6% = AED 674,160,Year 4 Return = AED 11,910,160 x 6% = AED 714,610,Year 5 Return = AED 12,624,770 x 6% = AED 757,486
Total returns over 5 years for Property A = AED 80,000 + AED 86,400 + AED 93,312 + AED 100,777 + AED 108,839= AED 469,328	Total returns over 5 years for Property B = AED 600,000 + AED 636,000 + AED 674,160 + AED 714,610 + AED 757,486= AED 3,382,256

You can clearly see that luxury property with a lower ROI compared to standard property generates more returns. Let’s see some price changes in prominent areas in 1 year.

LUXURY APARTMENTS PRICES IN POPULAR NEIGHBOURHOODS

POPULAR AREAS	ROI	PRICE PER SQ.FT	Avg. Price/sq.ft Change from H2 2023	TRANSACTION PRICE 2023	Avg. Transaction Price Change from H2 2023
Dubai Marina	6.82%	1,918	6.28%	2,165,054	13.6%
Business Bay	6.66%	2,014	3.06%	1,544,041	5.77%
Downtown Dubai	6.25%	2,837	2.16	3,086,406	9.51%

LUXURY VILLAS PRICES IN POPULAR NEIGHBOURHOODS

POPULAR AREAS	ROI	PRICE PER SQ.FT	Avg. Price/sq.ft Change from H2 2023	TRANSACTION PRICE 2023	Avg. Transaction Price Change from H2 2023
Arabian Ranches	4.90%	1,748	14.5%	6,759,526	23.2%
Dubai Hills Estate	4.93%	2,254	9.65%	9,135,297	16.7%
DAMAC Hills	5.91%	1,509	13.7%	4,729,089	7.74%

Now, at this point, you would be thinking, "That all sounds great, but is a luxury property right for me?" Well, let's find out together. Here's how to choose the perfect luxury property in Dubai.

Things To Keep In Mind While Buying A Luxury Property In Dubai

Now that we understand the market better, let's delve into the key factors you should consider when buying a luxury property in Dubai.

Identify Your Property Requirements

Before you go out searching for any property, you should have some idea of what to look for. That is likely to focus your quest and be assured of getting that property which is truly going to fulfill your wants.

Type of Property

There comes a lot of diversity when considering luxury property in Dubai. Think about what best suits your lifestyle:

Apartments: From chic studios to sprawling penthouses, luxury apartments in Dubai often come with great vistas and world-class amenities.
Villas: If you want more space and privacy, Dubai's luxurious villas will offer large living areas, private yards, and often personal pools.
Townhouses: For those who would require a balance between an apartment and a villa, townhouses would be the most comfortable in providing a good balance between space and community living.
Penthouses: When the luxury of space is a matter of concern, penthouses provide a view unequaled by other living spaces, together with amenities tailored only for big space seekers.

Location Preferences

Each neighborhood in the city is different from others and gives a unique living experience of its own. Consider what kind of location fits your lifestyle best:

Beachfront: Places such as Palm Jumeirah , Jumeirah Beach Residence (JBR), or Bluewaters Island offer lavish, direct beach-side living.
Downtown: For those who prefer to be in the heart of the action, areas like Downtown Dubai or Business Bay offer vibrant city living.
Suburban: If you prefer a quieter lifestyle, consider areas like Emirates Hills, Arabian Ranches, or Dubai Hills Estate.
Waterfront: Locations like Dubai Marina or Dubai Creek Harbour offer stunning water views and a maritime lifestyle.
Golf course communities: For avid golfers, property available in the Dubai Hills State or Jumeirah Golf Estates with prime access to some of the best courses will prove to be a dream come true.

Pro Tips: Location also plays a very important role in Your budget. Keep this factor in mind.

Specific Requirements

Determine if you have any specific requirements. You can ask yourself the following questions:

How many bedrooms do you need?
Would you like to work from a property in a separate study?
Would you require a big kitchen?
Would you like to have a separate living and dining area?
How many bathrooms do you need?
Would you like outdoor space? (Balcony, terrace, garden)
By defining the specific requirements, you can easily narrow down your search.

Amenities

Most luxury properties in Dubai offer a very long list of facilities. Think about what matters to you the most:

Private pool
The possibility of using a gym and spa
Concierge services
Valet parking
Smart home technology
Private beach access
Children's play areas
Tennis and other sports facilities
On-site restaurants and retail
Designated parking space

Pro tips: Don’t pick property solely based on flashing amenities. choose one which is right for you.

Purpose of Buying

The intended use of the property will also play an important role in your decision:

For Residential

If you want to make the property your home, amenities close to work, school, and daily amenities come into play.

For Vacation Home

Looking at a holiday property, you might look at centers near tourist attraction sites, beaches, or with strong rental potential, especially for the period when not in use.

For Investment

If you are goal-oriented towards financial gains, you would like to look at areas with high rental yields or major potential for capital appreciation.

Clearly defining your requirements will help you navigate Dubai's luxury property market to find a home that exceeds your needs and aspirations.

Budget Planning

Once your property requirements are laid out, the next most important factor is the identification of a reasonable budget. Luxury properties in Dubai hold a tremendously high price and thus a clear picture of your financial position helps you in property searching.

Determine Your Budget

Consider the following when setting your budget:

Total buying price that you can afford
Amount available for the down payment(generally 20-25% in case of non-UAE residents)
Monthly mortgage payments
Extra costs (charges associated with registration, agent commission, etc.)
Running Expenses (fees for maintenance and other utilities, etc.)

It's always advised to work with a financial advisor to better understand your financial standing and define a comfortable bracket to allocate your budget within.

Financing Options

Today, there are many financing options available even for the luxury segment:

100% Full Payment: If you have the money, then this is typically the easiest and might even provide you with more bargaining power.

Mortgages: If you are willing to buy a ready-to-move property but have financial restrictions, then don’t worry. Most leading banks in Dubai provide mortgage services both to residents and non-residents. Some of the key points you should consider before approaching a lender are:

Loan-to-value (LTV) ratio:
- UAE Nationals
  - For property above or equal to but not exceeding AED 5 million, LTV is at 85%. Properties over AED 5 million have an LTV of 75%. For a second home or investment property, it is 65%.
Non-UAE Nationals
For property below or equal to AED 5 million, the LTV in such a case is 75% for the first property and 60% for second homes or investment properties.
- Expats
  - For property of AED 5 million or less, the LTV is 80%. In the case of those above AED 5 million, it will be 70%.
Interest rates: This can be structured either way.
Loan tenure: Can be up to 25 years.
Age limits: Most banks will have a maximum age limit to loan maturity
Developer Backed Payment Plans: Most developers offer attractive payment plans, especially for off-plan properties. They may include,
Longer post-handover payment plans
1% payment plan
Installment payment plans
Payments During Construction
Lower down payment units

Other Costs To Be Aware Of

This extra cost should be included in the budget:

Dubai Land Department fee (4% of the property value)
Real estate agent's commission (typically 2% of the sale price)
Mortgage registration fee (if applicable)
Property registration fee
Valuation fee
Maintenance fees

Tax considerations: Though Dubai is known to be a completely tax-free city, a few things related to tax need to be kept in mind:

No property tax in Dubai
No tax paid on rental income
No capital gains tax paid on selling property

However, you will have tax responsibilities based on the country of your home residence. Speak to a tax professional who is well versed between the UAE tax laws and your home country's tax laws.

Currency Considerations:

For international buyers, consider the currency you are going to trade. The UAE Dirham is pegged to the US Dollar; this can give a measure of stability, but be aware that the fluctuations in the value of your home currency could affect your buying power.

Future-Proofing Your Investment

While setting your budget, do take into account the following changes which are bound to happen in the future: Possible increases in interest rates (if taking a mortgage)

Potential changes in maintenance fees
Future renovation or upgrade costs
Potential rental income (if you plan to lease the property in the future)

With in-depth budget planning and full understanding of all financial aspects of your buying, you now have a firm footing to invest in the luxury property market of Dubai.

Choose The Right Location Because Location is the Key

As mentioned above, "location" has an added bonus when it comes to this luxury segment in real estate. The right location will ensure a desirable lifestyle, and at the same time, it will play a very important role in potential property appreciation.

Factors to Consider When Choosing a Location:

Proximity to Key Areas

When looking at different areas in Dubai, consider how long it would take to commute to your workplace or business districts. If you have children, think about the proximity to reputable international schools. It's also important to factor in access to hospitals and clinics, shopping malls, restaurants, airports, and cultural attractions. Choosing a location close to your lifestyle needs saves time and offers convenience.

Infrastructure and Connectivity

Opt for areas with good road connectivity, allowing for easier commutes across Dubai. Nearby metro stations, tram lines or bus stops also improve accessibility. Check if any new infrastructure or transportation links are planned for the location in future. Upcoming developments can boost an area's connectivity significantly.

View and Surroundings

Properties with attractive views allow you to wake up to inspiring sights every day. Waterfront units overlooking the Arabian Gulf, Dubai Creek or artificial lakes are very sought-after. City skyline views with iconic structures like Burj Khalifa also appeal to many buyers. Proximity to green spaces and golf courses provides a serene environment.

Community Atmosphere

Think about the lifestyle an area offers. Some communities are very family-friendly while others have an urban atmosphere. Most luxury communities in Dubai have good atmosphere.

Investment Potential

Do research into historical price trends and appreciation in the location you’re considering, to estimate future growth potential. Planned developments in the near future can positively impact property values. Also assess the current rental yield and demand dynamics if you intend to lease out the unit.

Most Luxurious Areas in Dubai

Palm Jumeirah

Known for: beachfront living, high-end hotels, and lavish homes.
Property Types: Villas, apartments, penthouses.
Highlights: Private beaches, marina views, fine dining

Downtown Dubai

Known for: Urban luxury and proximity to the Burj Khalifa and Dubai Mall.
Property Types: High-rise apartments and penthouses
Highlights: City center location, vibrant nightlife, cultural attractions

Business Bay

Known for: Commercial hub with mix of offices, hotels, and residences
Property Types: Apartments, penthouses, hotel apartments, offices, retail
Highlights: Prime location next to Downtown Dubai, Dubai Canal views, mix of businesses and dining options

Dubai Marina:

Known for: Waterfront living with modern high-rises
Property Types Apartments and penthouses
Highlights: Marina views, walkability of the neighborhood, beach access

The Valley

Known for: Suburban community of villas and townhouses
Property Types: 3-5 bedroom villas and townhouses
Highlights: Family-friendly neighborhood, outdoor spaces and amenities, proximity to main roads

Damac Hills

Known for: Upscale community with villas, townhouses and apartments
Property Types: Apartments, hotel apartments, villas, townhouses
Highlights: Trump Golf Course views, retail and dining in community, high-end finishes and amenities

When searching for a location, visit the area during varied times of day. Observe specifically how things occur in terms of traffic, noise, style, and alike. Also investigate any future development expected in your area of interest, since it could make a far-reaching difference in how you are heading and its worth in property before long.

Keep in mind that the "best" area is a matter of personal taste, lifestyle preferences, and investment goals. After this, allocate some time and drive around probable locations, imagining living in each one before you decide on a place.

Research Emerging Areas

While classic luxury hotspots—like Palm Jumeirah or the Dubai Marina—are always in demand, don't ignore what is emerging.

Emerging luxury hotspots offer great value for money and a future chance of appreciation.

For investors, you will end up buying a luxury asset at a slightly lower price and in a few years earn handsomely when the emergence of the area of question takes place.

There could be newer developments, however, in such emerging areas, with cutting-edge amenities afforded to the end-user at more attractive prices compared to some of the older luxury areas.

Here are some emerging areas worth watching:

Damac Riverside
Mohammed Bin Rashid City
Tilal Al Ghaf
The Valley Phase 2
Dubai South

We watched most of these emerging hot spots very closely and could give you inside insights to help you make an informed decision.

Choose a Real estate agent who has good reputation

Now, we've shared some of the basics that you can quite readily research for yourself. But if you find yourself needing to negotiate in Dubai's luxury real estate market, nothing beats a professional hand to guide you through. That is what we're here for.

At Top Luxury Property , we specialize in assisting clients to search for their dream luxury property in Dubai. Be it in any locality, our team of experts knows the pulse of the market and is committed to making your property journey smooth and successful.

Here's how we can help you:

Choose a Trusted Developer: When buying luxury property in Dubai, the credibility of a developer is of utmost importance. We only work with the most trusted luxury developers in the city, such as,
- Emaar
- DAMAC
- Binghatti
- Sobha Realty
- Nakheel
Exclusive Listings Access: Get access to the cream of developers and off-market properties you won't find listed anywhere else.
Extensive In-Market Experience: Providing you with the up-to-date luxury trends in Dubai's properties, and we will help you choose the perfect strategy for an insightful decision.
Individualized Services: Listen to your requirements and preferences to give you a handpicked list of properties that would interest you.
Strong Negotiation: Seek the best possible arrangement for your chosen property with our expert negotiation skills.
End to end support: Right from the viewings to the paperwork and all the way.

Short-listing Properties

Now that we have already defined your exact preferences and your budget, it is time for the most exciting part—property viewings! We will organize the viewings in a specially selected list of luxury properties that best suit your criteria.

Some of the most exciting luxury developments on our radar right now include:

We will walk you through viewings and highlight attributes of a property to make that visualization realistic for you to choose life. Our aim is not just to find a property but a right luxury property for you.

Are you ready to start your Dubai luxury property journey? Let's chat! Our team of professionals is here to help you master this fabulous market and search for the property of your dreams! We will make your Dubai luxury property dream a reality. We join our expertise with your vision, and the dream begins. Contact us today!

Note: If you are not in Dubai, then don’t worry. We have online assistance for you. All you have to do just visit our website Top Luxury Property.com or can call us. Our representative will give you.