What the research finds
The premium depends on elevators. A study of registered transactions in Taipei from 2012 to 2020 found a premium of 0.55% per floor in residential buildings with an elevator, but a discount of 4.21% per floor in walk-up apartments (Chen, Peng and Yang, 2022). The same floor, a different building, the opposite effect.
Top floors can sell at a discount. Using 1.9 million resale transactions in South Korea, researchers found top-floor discounts of 1.3% to 8.3% of resale prices. Their evidence links the discount to higher heating and cooling costs for top-floor units, which face more extreme indoor temperatures (Hwang and Ma, 2022).
Effects vary by price level. In the same Taipei study, the floor premium in buildings with elevators grew in the more expensive part of the market. In Dubai itself, a study of 140,039 transactions found that price drivers are non-linear and differ across price levels (Worku, 2017). A single average floor premium would hide this.
Why Dubai may be different
- Heat, not cold. In Dubai the dominant energy cost is cooling. If the South Korean mechanism carries over, top floors and facades exposed to the afternoon sun could carry a cost that buyers eventually price in.
- Elevator capacity in tall towers. Dubai's towers are tall, and waiting time for elevators rises with height and with the number of units per elevator. The Taipei result suggests that vertical access is part of what buyers pay for.
- Views can be temporary. A high-floor view over an empty plot can disappear when the next tower is built. What buyers value is the view, not the floor number, and the two can separate over time.
- Off-plan pricing. A large share of Dubai sales are off-plan, priced from developer price lists. A floor premium set in a price list is not the same as a premium confirmed in later resales.
What we will test
The question is not "is there a floor premium?" but "under which conditions does it appear, flatten or reverse?". Inside each building, we plan to test floor level together with elevator capacity, view type, facade orientation and noise exposure, allow for curves rather than a straight line, and estimate the effect separately for different price segments. The methodology page describes the approach in more detail.
What this means today
Until the evidence exists, a floor premium is an assumption. A buyer comparing two units in the same building can still ask useful questions: how have registered resale prices differed between floors in this building, how many elevators serve how many units, which way does the unit face, and could its view be built over? We do not publish building-level results, but these questions apply to any comparison.
Sources
- Chen, Y.-H., Peng, C.-W. and Yang, C.-H. (2022). Vertical Housing Price Gradient and Ground Floor Premium in Taipei City. International Real Estate Review 25(2), 199 to 216.
- Hwang, S. and Ma, J. (2022). Top-floor discounts in residential buildings: Evidence from South Korea. Real Estate Economics.
- Worku, G. B. (2017). House price drivers in Dubai: nonlinearity and heterogeneity. International Journal of Housing Markets and Analysis 10(3), 384 to 409.
This article is general information, not investment, legal or tax advice. UAE Portfolio is a validation-stage project and not yet licensed. Join the waitlist to follow the research.