According to experts, profit margins rise further for those who do upgrades on their properties
Overview
During the past few years, several Dubai residents who bought property during the pandemic have seen significant increases in value. Many are now cashing in on the rising real estate market, with some reselling their homes for up to Dh15 million in profits. “While many buyers from 2020 and 2021 are holding onto their investments due to the improving market, there has been a noticeable increase in property flipping, especially in high-demand areas like DIFC and Downtown Dubai,” one expert noted. “This trend is driven by the desire to take advantage of the market’s current upswing. Investors in villa communities, in particular, have achieved impressive profits, with some earning up to Dh15 million.” Over the last three years, Dubai property prices have skyrocketed as thousands of expatriates, including high-net-worth individuals, have moved to the country. Another real estate expert pointed out that profit margins in some areas have exceeded 30 to 40 percent. “In prime locations like Downtown Dubai, Palm Jumeirah, and Dubai Marina, property values have doubled since the 2020 market low,” they explained. “Off-plan developments, such as Tilal Al Ghaf, have also seen a 100 percent return on investment for owners who bought during the pandemic.”
The Impact of Property Upgrades
Owners who have upgraded their properties are enjoying even higher profit margins. “We’ve seen villas on Palm Jumeirah purchased for Dh8 million to Dh10 million, refurbished, and then sold for more than Dh50 million,” the expert added.
Dubai resident Mansoor Ali is one example. He bought a villa in Dubai Hills in 2021 for Dh3 million and added landscaping, a pool, and an extra bedroom. Earlier this year, he sold the property for Dh8 million, earning a profit of more than 150%.
“I’ve been investing in properties in the UAE for a while, but I didn’t expect such a large return on this one,” Mansoor shared. “Dubai Hills has appreciated significantly due to its location and excellent community facilities.”
High Demand for Renovated Homes
The demand for renovated homes has been strong, with properties often selling quickly and at premium prices. “There is a growing preference among buyers for move-in-ready homes with unique features, rather than standard developer offerings,” said one market expert. “Investors are tapping into this demand by focusing on renovating properties to maximize their returns.”Reinvesting Profits into New Opportunities
Many sellers are reinvesting their profits back into the market, often opting for newer off-plan developments or upgrading to more premium properties. “Dubai’s constantly evolving real estate market provides a steady stream of opportunities, and many investors prefer to keep their capital circulating,” explained another source. While property flipping, especially in prime locations, continues to yield significant returns, experts note that the margins are beginning to shrink, particularly in villa communities. “We’ve seen clients achieve gains of up to 25 percent in just a few months, but rising fees from master developers are impacting profit margins in some areas.”
Emerging Market Trends
In addition to property flipping, several other trends are shaping Dubai’s real estate market. There is increasing interest in sustainable, eco-friendly homes as buyers become more conscious of energy efficiency. The luxury market is also thriving, with high-net-worth individuals seeking unique properties, particularly in waterfront locations and branded residences. Off-plan sales continue to dominate the market, and there has been a noticeable rise in buyers demolishing villas and rebuilding in areas like Emirates Hills and Palm Jumeirah. This trend highlights the premium that buyers are willing to pay for prime land. Dubai’s real estate market remains dynamic, offering numerous opportunities for investors who are willing to adapt and reinvest.Ownership Trends: What Buyers are Looking For
When it comes to property ownership, 59% of buyers are focused on apartments, while 41% are interested in villas or townhouses. Among those searching for apartments, 33.6% are looking for one-bedroom units, 35.2% prefer two-bedroom options, and 13.7% are interested in studios. For villas and townhouses, 39.8% seek three-bedroom units, and 44.9% are looking for four-bedroom or larger options. Popular areas for apartment ownership include Dubai Marina, Jumeirah Village Circle, Downtown Dubai, Business Bay, and Palm Jumeirah. Meanwhile, Dubai Hills Estate, Al Furjan, Palm Jumeirah, and Akoya by Damac are the top choices for villa and townhouse buyers.Rental Trends: Preferences and Popular Areas
In the rental market, 80% of tenants are looking for apartments, with 60% preferring furnished properties and 38% opting for unfurnished ones. Among those seeking villas and townhouses, 57% are interested in unfurnished units, while 42% prefer furnished options. For apartment rentals, 37% of tenants are looking for one-bedroom units, 31.7% prefer two-bedroom apartments, and 20.9% are interested in studios. Rental seekers for villas and townhouses show a balanced preference, with 43.1% searching for three-bedroom units and 35.4% looking for four-bedroom or larger options. Top rental areas for apartments include Dubai Marina, Jumeirah Village Circle, Downtown Dubai, Business Bay, and Deira. Popular choices for renting villas and townhouses are Jumeirah, Al Barsha, Dubai Hills Estate, Akoya Damac Hills, and Umm Suqeim.
