Dubai’s real estate market has shown steady growth over the years, and the residential property sector has been no exception. In the second quarter of 2021, the average residential property price in Dubai increased by 0.6% compared to the previous quarter, according to data from Dubai Land Department.
Similarly, the total value of real estate transactions in Dubai reached AED 72.5 billion in the second quarter of 2021, a 39.9% increase from the previous quarter.
Residential property valuation plays a massive role in real estate transactions in Dubai. When it comes to buying or selling residential real estate, property valuation services can help you find an estimated number that you can use to guide your real estate transaction decisions.
We will go through residential property valuation, its significance, and the advantages these valuations provide in this article.
What is Residential Property Valuation Service in Dubai?
Residential property valuation is calculating the estimated value of a residential property at the time of the valuation. The valuation can be conducted in several ways, from the cost approach to income capitalisation.
Residential property valuation is conducted by skilled professionals who offer expert assistance to property buyers and sellers, helping them make informed decisions regarding real estate transactions.
Why Consider Residential Property Valuation in the Dubai Real Estate Market?
Property valuation is essential for property buyers as well as sellers. For property sellers, it is important to learn about the estimated value of a property so that they can take steps to further improve the value before selling it for profit.
For property buyers, an independent property valuation can help them get an estimate of the property’s value that they can use as a guide during the negotiation process.
Difference Between Property Valuation & Property Appraisal
Property valuation and property appraisal are often used interchangeably. There is not much difference between these two, but a distinction between them is still worth knowing.
A property appraisal is generally a free service offered by real estate agents. It involves estimating a property’s value based on current real estate market trends.
On the other hand, property valuation is a paid service, and its deliverables include a written report describing the conditions and value of a property.
Factors That Affect the Value of a Residential Property
- Property size is the primary factor that affects the value of a property.
- The number and type of bedrooms in a residential real estate impact the result of the property valuation.
- Residential buildings with multiple units and additional equipment can impact the property value.
- The building design and structure also affect the value of a residential property.
- Location and the amenities surrounding a residential property affect the value as well.
- Market conditions and recent sales in the area affect the value of comparable residential properties.
Common Valuation Methods for Residential Property in UAE
The most common valuation methods for residential property are as follows:
Sales Comparison Approach
It is the most common residential property valuation method that helps calculate the value of a property based on the recent sales of similar properties in the area. The valuation team looks at the market pricing trends to determine the property’s base value. After that, they consider the differences between the properties to determine the best possible estimate.
Income Approach
For residential buildings that generate income through rent, the amount of income generated affects the property’s value. This valuation method is typically used for investment properties.
Cost Approach
In the Cost approach, the Market Value is estimated using the current gross replacement costs of improvements fewer allowances for physical deterioration.
How to Prepare For a Property Valuation in Dubai?
Here are a few tips for first-time residential real estate sellers and buyers ‘in Dubai that can help them prepare for a property valuation:
- Decluttering can help the valuer better understand the property’s key features.
- Property sellers need to make sure that they keep the relevant paperwork nearby. These documents may include building plans, leasing contracts, maintenance documents, etc.
- Lastly, write down any questions about the valuer or the valuation process. It will help you get a better understanding of the valuation process.
Tips to Increase the Value of a Property in Residential Valuation
Here are a few tips that you can use to increase the value of your residential property:
- Keep the finish of your home updated before property valuation.
- Upgrade energy-efficient features.
- Maintain the curb and garden appeal.
- Update the kitchen and bathroom spaces with the latest equipment.
- Clean and declutter your home before the property valuation.
Conclusion
Residential property valuation helps establish a property’s current market value that assists buyers and sellers in making a deal that benefits both parties. An independent real estate valuation can help you make the most out of your real estate investment from the perspective of the buyer and the seller. Visit Land Sterling to learn more about residential property valuations in Dubai.
