The Dubai property market has long been driven by strong demand, especially after COVID-19, driving more buyers to the thriving market than ever before. With prices sky-high though, is now the right time for owners to sell their investment?
Economic growth in tourism, trade, and finance increased prosperity, along with tax incentives and foreign ownership laws attracting overseas investment. In addition, government infrastructure spending has further helped put Dubai on the global map.
Rising populations also create high housing needs, making property investments appealing for solid rental yields this year.
But is it a good idea to sell a property in 2024? Here’s what experts told Arabian Business:
Selling a Dubai property in 2024
“If you purchased a property during the downturn seen in COVID-19, and flipped it amidst pandemic recovery, your ROI as an investor could have been through the roof. On the other hand, if you had sold a property during COVID-19, one year later you would likely regret having not held on to it a little longer in the name of larger profits,” Ujjwal Goel, Director of Teraciel Group said, adding that there is no one-size-fits-all answer to if it is a good time to be selling property.
Echoing the sentiment, Paul Kelly, Operations Director at Allsopp & Allsopp Group added that “it depends” on an individual’s next move.
“The market is at the highest it’s ever been in Dubai, so the likelihood for most people is that they will already have an amount of ‘profit’ sat in their homes. The key question is what you are going to do once you have sold [property],” he said.
According to him, if the investment goal is capital gains to reallocate funds or seize another opportunity, then selling now could make sense.
While the market may continue rising, perfect timing is impossible, Kelly said, adding that there are also quality development phase investments offering chances to re-deploy proceeds into early phase projects expected to appreciate meaningfully over construction until completion.
“There is also good opportunity for those looking to upsize, downsize or move community. To upsize, for a lot of people, the equity that they now have in their property will help to elevate their affordability moving onwards. For those looking to downsize, there is the chance to sell and have a bigger lump sum for your next purchase which will mean a smaller mortgage,” he said.
Kelly explained that there are “several advantages” to selling property right now, however, the seller will need to have an “onward plan” of what to do next. “Otherwise, you would be surprised how easily even a large sum of money can be chipped away at,” he said.
Not ideal to sell now, but good time to buy Dubai property
Capital growth rates for luxury properties in Dubai are forecast to slow significantly this year to 4-5.9 percent vs 17.4 percent in 2023. So investors would have been better off selling last year, according to Teraciel Group’s Goel.
While not ideal to sell now, it could be a good time to buy, as Dubai’s real estate market is still expected to outperform globally and grow 8-9.9 percent in 2024, he said.
“An influx of high-net-worth individuals (HNWIs) is contributing to this belief. If this projection is realised, super-prime real estate – assets valued at $25 million and above – could prove to be a sound investment with handsome returns.
“Beyond profitability, super-prime residential developments are also known to offer end-users the best possible quality in the entirety of a project; from interiors to appliances, and security, as well as so much more. This is why investors are increasingly seeking out these developments, as the quality they offer is synonymous with the luxurious standing of Dubai,” he said.
When asked which properties are likely to see profits if sold in 2024, Goel said properties “optimally located” have the potential to yield strong returns for investors.
Optimally located properties include those that are within the proximity to central landmarks or overlooking scenic views, according to Goel.
“For this reason, areas such as neighbourhoods like Palm Jumeirah, Downtown Dubai and Dubai Marina are among some of the most sought-after areas for luxury real estate. Dubai Hills has also emerged as a notable area of interest worth considering investment into,” he said adding that ground-breaking developments like this are “not only playing an integral role in the strength of Dubai’s luxury real estate sector but also future-proofing the residential segment by meeting evolving market demands. As a result, if an investor chooses to flip a project like this one, they will inevitably realise a profitable ROI.”
Renovated Dubai properties yield more profits
Allsopp & Allsopp’s Kelly added that people are “taking good profits” out of renovated properties as well as properties that were bought three to four years ago.
“Renovating a property in Dubai takes an incredible amount of time, and money – with quite a few unavoidable headaches along the way. There is a large and growing demand for ‘turnkey’ properties, which are properties that people can turn up and move in, without the need to do anything. Anyone that bought three to four years ago, will have seen significant appreciation and should be in a favourable financial position on selling,” he said.
Kelly also explained that profits are not “area-dependent” rather more to do with the date of when the property was purchased by the seller, if it has been renovated and the condition of the property, view, plot size, and other similar factors.
However, properties can be harder to sell if they have certain negatives like dark rooms, clutter, unusually customised designs or if they are in poor condition.
Tenanted properties can also be more difficult as the buyer has to take over being a landlord and wait for the tenants to vacate, Kelly said, adding that this is why many landlords are choosing to rent their properties as holiday homes instead, as it allows them to sell the property empty if needed.
The buyer won’t have to deal with tenants. Renting as a holiday home also provides higher returns generally.
“The positive impacts are renovations, upgrades, light, an uncluttered space, nice views, attractive room dimensions, good plot sizes, and regarding the above, properties that are also ready to move into,” he concluded.
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