Service charges on Dubai properties are the monthly protection rate to be paid to the Dubai Land Department. These prices can be collected from the homeowners and used to preserve unusual regions and facilities. Service charges in Dubai are anticipated to increase by up to 10%, pushed by rising operational costs, such as the maintenance of common regions, better district cooling costs, and accelerated utility prices. Industry supervisors highlight that these service charges appreciably impact property buy selections, with some landlords elevating rents to compensate for the effect of higher charges.
Industry Experts on Service Charge Increases
According to Hadi Hamra, managing partner at Driven Properties, service prices throughout Dubai rose by about 10%. He defined that the boom varies depending on the network, as one-of-a-kind features have precise amenities and maintenance necessities.
“In many cases, the upward push in service charges has been pushed by higher operational costs — such as upkeep of common areas, energy consumption, and staffing appetites,” stated Hamra. Looking ahead to 2025, he predicts an additional growth of 5 to 10% in service charges, depending on the age and situation of each improvement.
What Do Service Charges Cover?
Service charges are ordinary fees that owners pay to keep and control residential buildings and communities. These charges generally cover the following:
| Service Charges | Description |
| Cleaning and Maintenance | Routine renovation of elevators, escalators, and mechanical systems.Plumbing and electrical maintenance in common areas. Painting, tiling, and restoration of shared spaces.Structural inspections and preventive maintenance. |
| Security Services | Hiring security personnel for entry monitoring, patrolling, and emergency response.Installation and maintenance of CCTV cameras for 24/7 surveillance. Access control systems for secure entry to residential and commercial buildings. |
| Landscaping | Seasonal landscaping upgrades and decorative plant installations.Irrigation system maintenance to ensure proper water supply. |
| Waste Disposal | Daily garbage collection from residential and commercial units.Recycling programs and waste management initiatives.Maintenance of garbage chutes and disposal areas.Hazardous waste handling for proper environmental management. |
| Repairs and General Upkeep | Salaries for property management staff and administrative personnel; legal and compliance costs for regulatory requirements; insurance coverage for property and liability protection; and financial planning and budgeting for maintenance operations. |
| Management and Administration | Salaries for property management staff and administrative personnel.Legal and compliance costs for regulatory requirements.Insurance coverage for property and liability protection.Financial planning and budgeting for maintenance operations. |
| Utilities | Daily cleaning of common areas (lobbies, hallways, staircases, elevators, parking lots). Glass and façade cleaning to maintain exterior aesthetics. Deep cleaning of amenities such as pools, gyms, and recreational areas. Pest control services to prevent infestations.Regular sanitisation and disinfection for a hygienic environment. |
RERA oversees service charges, ensuring they remain transparent and constant with marketplace costs. However, fluctuations in operational prices, inflation, and regulatory updates often bring about periodic increases.
Areas with the Highest and Lowest Service Charges
Hamra emphasised that older properties require more common renovation, infrastructure enhancements, and system replacements, which push charges higher. In evaluation, more modern or well-maintained features can also reveal a lower increase. However, constant marketplace boom and inflation may preserve service charges on an upward trend.
Areas with the Highest Service Charges
| Area | Service Charge (Dh per sq. ft.) |
| Bulgari Resorts and Residence, Jumeirah Bay Island | 53.7 |
| Dubai Marina | High |
| Business Bay | High |
| Downtown Dubai | High |
| Bluewaters | High |
Areas with the Lowest Service Charges
| Area | Service Charge (Dh per sq. ft.) |
| Jumeirah Village Circle | Low |
| Marjan | Low |
| Jumeirah Lake Towers | Low |
| Dubai South | Low |
Breakdown of Dubai Service Charges Index
The comprehensive prices related to the service charges index on a property in Dubai are stimulated by a myriad of things, which encompass:
- Community Location: The precise vicinity or neighbourhood where the properties are situated plays a significant role. The attraction and demand of certain regions can lead to higher service costs compared to more economically priced locales.
- Project Type: The nature of the community’s construction or sub-network determines the service costs implemented. It encompasses diverse retail areas, business properties, residential gadgets, offices, villas, and serviced apartments.
- Property Usage: The property’s intended use—whether or not for retail, business purposes, or residential dwelling—also impacts the service charges levied.
Properties in high-demand areas frequently incur higher service charges than comparable houses in less expensive regions. The Dubai Land Department regulates carrier expenses through the Service Charge and Maintenance Index, ensuring transparency and fairness in levied costs. Property owners are recommended to stay informed about the legitimate service fee index and engage with property control agencies to understand the breakdown of fees relevant to their houses.
Inflation and Rising Costs Impacting Service Charges
Anmol Shroff, founder and chairman of Elton Real Estate Development, stated that inflation and rising fees of materials, hard work, and utilities have contributed to the increase in service charges.
“Higher Dubai Electricity and Water Authority (Dewa) bills and multiplied district cooling fees have substantially impacted operational charges. As buildings age, preservation prices enhance, requiring extra common upkeep and upgrades,” stated Shroff.
Additionally, regulatory compliance with stricter government protection and sustainability measures has added to the monetary burden. Facility management charges for security, landscaping, and cleansing continue to rise, even as community enhancements such as upgraded gyms, pools, and landscaped areas similarly contribute to higher charges.
Impact of DLD Service Charges on Property Buyers
Shroff noted that property owners often boost rents to compensate for better DLD service charges. However, bypassing those prices depends on marketplace demand and Real Estate Regulatory Authority (RERA) condominium index regulations. “In aggressive regions, landlords may additionally soak up costs to preserve tenants, while high-demand locations can also allow for rent increases,” he defined.
Hamra delivered that even as service charges influence property customers, they may not usually be the primary deciding element. “Location, capability return on investment, and the overall lifestyle provided via a network tend to rank better on maximum buyers’ checklists. Of course, steep or hastily rising service charges can be a deterrent, but in most instances, they’re just one part of the general equation that potential purchasers don’t forget,” he stated.
How to Navigate the Changes?
To manage the approaching upward push in service charges in Dubai:
- Stay Informed: Regularly look for updates from property management and the Dubai Land Department.
- Budget Accordingly: Anticipate these will increase your monetary making plans for the coming 12 months.
- Engage in Community Discussions: Collaborate with fellow residents and homeowners’ institutions to discover cost-saving measures.
Impact of Rising Service Charges on UAE Economy and Off-Plan Properties
Rising service charges could have a broader impact on the UAE economy, affecting property investment tendencies and marketplace dynamics. Higher service costs increase the general property ownership price, which can decrease investor self-assurance, especially among expatriates and overseas buyers. Increased operational fees may deter companies from investing in industrial properties, circuitously influencing the economic boom.
Rising service fees may discourage buyers from buying under-construction developments in the off-plan properties area, as they count on better future fees. Developers must also provide incentives to attract consumers, such as lower service charges for the preliminary years or advanced charge plans. Additionally, fluctuating service fees can affect off-plan properties to influence demand and overall sales performance.
Conclusion
With service charges set to increase due to growing operational charges, property owners, tenants, and potential buyers must incorporate those charges into their economic planning. While service charges are essential, place, services, and funding potential remain the key drivers of property decisions in Dubai. Moreover, the broader impact on the UAE economic system and off-plan property market highlights the importance of service charge hikes with sustainable boom strategies.
