Amid Dubai’s surging luxury property market, experts counsel sellers and buyers to judiciously plan their actions to optimize returns, considering factors such as location, condition, and investment objectives.
Given the robust demand in the Dubai property market, particularly post-COVID-19, more buyers are flocking to the flourishing market than ever before. However, with prices soaring, owners may question whether it’s opportune to sell their investments now.
The upsurge in tourism, trade, and finance has bolstered economic growth, fostering greater prosperity. Furthermore, tax incentives and foreign ownership regulations have enticed significant overseas investment. Government expenditure on infrastructure has also played a pivotal role in elevating Dubai’s global prominence.
With increasing populations comes a heightened demand for housing, rendering property investments attractive for their strong rental returns this year.
However, is it wise to dispose of a property in 2024? Here’s what specialists advised Arabian Business:
Selling a Dubai property in 2024
Ujjwal Goel, Director of Teraciel Group, emphasized that purchasing a property during the COVID-19 downturn and flipping it amid the pandemic recovery could have resulted in exceptional ROI for investors. Conversely, selling a property during COVID-19 might lead to regret a year later, as holding onto it longer could have yielded greater profits.
Paul Kelly, Operations Director at Allsopp & Allsopp Group, echoed the sentiment, stating that the decision to sell depends on an individual’s subsequent actions.
“He noted that with Dubai’s market currently at its peak, many individuals likely have accrued a significant amount of profit from their properties. The crucial question, he emphasized, revolves around what action one intends to take upon selling.
In his view, if the objective of the investment is to realize capital gains for reallocating funds or pursuing other opportunities, selling at this juncture might be advantageous.
While it’s plausible that the market could continue its upward trajectory, achieving perfect timing is improbable, Kelly asserted. Furthermore, he pointed out the availability of high-quality development phase investments, presenting opportunities to reinvest the proceeds into early-stage projects expected to appreciate substantially throughout their construction phases until completion.”
“There are also favorable opportunities for individuals seeking to upsize, downsize, or relocate within the community. For those opting to upsize, the accrued equity in their property can significantly enhance their affordability going forward. Likewise, those considering downsizing can capitalize on selling their property to secure a larger lump sum for their next purchase, resulting in a smaller mortgage burden,” he remarked.
Kelly elaborated on the “several advantages” of selling property at present, emphasizing the necessity for sellers to have a clear “onward plan” for their next steps. “Otherwise, it’s surprising how easily even a substantial sum of money can dwindle away,” he cautioned.
Not ideal to sell now, but good time to buy Dubai property
According to Teraciel Group’s Goel, the forecasted capital growth rates for luxury properties in Dubai are expected to significantly slow this year to 4-5.9 percent, compared to 17.4 percent in 2023. Thus, investors would have been better off selling last year.
While selling now may not be ideal, it presents a potentially favorable time to buy. Dubai’s real estate market is anticipated to continue outperforming globally, with an expected growth of 8-9.9 percent in 2024, driven by an influx of high-net-worth individuals (HNWIs).
Should this projection materialize, super-prime real estate—properties valued at $25 million and above—could offer substantial returns, making them a sound investment choice. These developments are sought after not only for their profitability but also for the unparalleled quality they provide, encompassing interiors, appliances, security, and more.
Regarding properties likely to yield profits if sold in 2024, Goel emphasized the importance of location. He stated that properties situated optimally, near central landmarks or offering scenic views, have the potential to generate strong returns for investors.
“He emphasized that neighborhoods such as Palm Jumeirah, Downtown Dubai, and Dubai Marina are highly coveted for luxury real estate. Additionally, Dubai Hills has become a prominent investment destination. He highlighted that innovative projects like these are crucial for bolstering Dubai’s luxury real estate market and adapting to changing market needs. Consequently, investing in a project like this guarantees a lucrative return on investment when flipped.”
Renovated Dubai properties yield more profits
Kelly from Allsopp & Allsopp mentioned that individuals are currently reaping substantial profits from both renovated properties and those purchased three to four years ago.
According to Kelly, renovating a property in Dubai demands a significant investment of time and money, often accompanied by unavoidable challenges. He noted a rising demand for “turnkey” properties, which allow buyers to move in immediately without any additional work. Those who invested in properties three to four years ago are likely to see considerable appreciation and enjoy favorable financial outcomes upon selling.
Kelly emphasized that profit margins are not contingent on the property’s location but rather on factors such as the purchase date, renovation status, overall condition, view, plot size, and similar attributes.
Nevertheless, properties with certain drawbacks, such as dimly lit rooms, clutter, unconventional designs, or poor conditions, may face difficulties in the selling process.
Kelly mentioned that dealing with tenanted properties can pose challenges for buyers as they inherit the role of landlord and must wait for tenants to vacate. Consequently, many landlords are opting to rent out their properties as holiday homes instead, enabling them to sell the property vacant if necessary.
Buyers will be spared from the task of managing tenants, while renting out as a holiday home typically yields higher returns.
In conclusion, the benefits include renovations, upgrades, ample light, spacious and uncluttered interiors, pleasant views, attractive room dimensions, generous plot sizes, and properties that are move-in ready.
