Leave aside the run-up in market prices for residential real estate in Dubai, buyers looking for purchasing houses in the resale market or expats who are scouting for leased accommodation in Dubai will now have to cough up more money on the back of an estimated 10 percent jump in renovation and home staging costs, industry insiders said.
Costs for home staging – design and decoration of an apartment or house to improve its appearance and increase its market value – and attended repair costs for a two-bedroom apartment can cost up upwards of AED45,000, while that for a studio could cost a minimum of AED30,000 due to significant cost escalations for materials, furniture and labour.
“Over the past year, the cost has increased by approximately 10 percent,” Anton Kaptur, Head of Project Management at Colife, a Dubai-headquartered global property management and rental firm, told Arabian Business.
Senior executives at other city-based property management companies said the costs can even be higher depending on factors such as the volume and complexity of the work, the quality of materials, and the qualifications of specialists.
With potential buyers or tenants becoming more and more demanding in terms of the looks, cleanliness and stylish organisation of the space, homeowners in Dubai tend to spend hefty amounts for pre-sale or pre-lease preparations of their units to make them more attractive and comfortable.
“The buyers or tenants ultimately will have to pick up the price tag for home staging by way of increased sale prices or rentals,” Kaptur said.
How much more buyers or tenants have to fork out?
Industry insiders said though the increase in resale prices or lease costs could vary depending on the costs incurred by respective owners, it could easily be in the range of 8-10 percent.
Consultants at property management firms said in general, the costs involved for house renovation will include payment for construction and finishing materials, homesteading – necessary furniture, appliances, and decorative items, besides labour costs.
Senior executives at Colife said potential buyers, especially expats, prefer to live in only such refurbished apartments or houses in Dubai.
“We usually work with properties from studios to 2-room apartments on the secondary market because owners can immediately rent them out as soon as renovation works are done.
“In some apartments, only minor, cosmetic repairs are required; in others, more serious ones – replacing tiles, plumbing, installing new locks, etc will be required, usually taking from 9 to 13 days for one apartment”, said the Project Management Head at Colife.
When it comes to luxury properties, the refurbishments go beyond mere upgrades, incorporating lavish features such as cinema rooms, indoor and outdoor pools, gyms, steam rooms, spas, and elevators, enhancing the living experience to unparalleled levels of luxury.
“The refurbished homes boast exclusive interior and exterior designs, complemented by breathtaking views, rivalling or surpassing new constructions in elegance and functionality,” executives at Maria Morris Real Estate, said.
Industry experts said the cost escalation due to the house renovation will be over and above the general price rise in the residential real estate market in Dubai.
Apartment renovations in Dubai becoming a more expensive affair
Industry players said the cost of home staging and repairs in Dubai has increased by 5-10 percent over the past 12-month period.
They said not only construction materials and furniture have become more expensive, but the cost of contractors’ work has also seen a significant increase recently.
“[Material and labour] prices move up in tandem with the increase in the market prices of the apartments or rentals,” Kaptur said.
He said investors who buy an apartment in Dubai for renting out need to take into account possible costs for renovations, in addition to the cost of the apartment itself.
“They can, however, easily recover these costs as apartments with a new stylish renovation, high-quality home staging, and everything necessary for life are rented out faster and can fetch higher rentals than those properties that lack all this,” Kaptur said.
Property management firms such as Colife try to minimise renovation costs by directly sourcing furniture and few other items from factories at special prices and production times.
As for other items, Kaptur said they buy from online sites such as IKEA, Home Centre, Ebarza, Homes r Us, Home Box, OC home, etc.
“Every year, it becomes more and more expensive to renovate an apartment in Dubai, Kaptur said, adding that he foresees the average cost of apartment renovation to increase by another 10 percent in 2024.
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