Dubai: Want to make more profit from the Dubai boom? Next, take a look at the growing number of available or near-simple apartment offers for sale in some locations in Dubai.
One more benefit is that these apartments are fully furnished. The idea is for the developer or seller to reduce the time it takes for the buyer to get the unit and then outfit it. In other words, a buyer can start renting out a fully furnished flat as soon as they buy it. (Or move in for their own use, if that is the objective.)
Although these completely furnished, ready-to-move-in flats are more expensive, investors are aiming to speed up the return on their investment. “We have seen properties that will be handed over in three months being purchased; the nicest thing is that the buyer already has a renter for it,” remarked one estate agent. “The market is seeing a distinct increase in offers for ready/soon to be ready apartments, not just from developers, but also from existing owners looking to cash in.”
The source adds that these buyers are looking for shorter tenants, regardless of whether this is a year, a year or two. In some cases, future rent payments are provided by the tenant’s employer.
According to sources in the real estate market, two sub-trends are at work:
A rise in demand for Grade A and super-premium offices, some of which could be finished within the next 12 to 18 months, is the first possibility.
The second is for furnished residences in and around some of the more recent high-end office skyscrapers.
Essentially, one set of demand is laying the ground for another.
“In areas such as Downtown Dubai & Business Bay, high quality furnished one-bedroom units can typically rent for Dh100,000 to Dh150,000, while two-bedroom units can command Dh170,000 to Dh240,000 annually,” said Aakarshan Kahthuria, Managing Director at RiseUp consultancy.
“In these areas, the rental premium is driven by expats – typically white-collar professionals – putting immediate occupancy as their first criteria and focusing more towards hassle-free living.”
Furnished one-bedroom homes in Palm Jumeirah can cost between Dh140,000 and Dh180,000 per year, while two-bedroom units cost between Dh250,000 and Dh320,000 per year, especially if matched to a super-prime address.
Those types of data, as well as prospective yields, are exactly what investors are looking for.
No longer selling ‘plain vanilla’
This illustrates a huge number of residential projects using brands launched in Dubai and Abu Dhabi over the past two years. The current trend is that projects do not offer the brand the opportunity to submit units as part of a sales and purchase agreement.
“Traditionally, offplan properties dominated the market due to flexible payment plans and potential for higher returns,” said Vasilii Fetisov, managing partner of Housebook Real Estate. “However, the demand for ready properties has been on the rise, leading developers to respond accordingly.”
This means that a simpler payment plan and lower deposit offer will be ready or sooner. In itself, this was a player that allowed individual owners to achieve offers from developers when it came to finding new buyers.
“Furnished apartments are particularly appealing to those looking to relocate swiftly or investors aiming for prompt rental income,” said Fetisov. “This convenience often results in a premium on such units.
“For instance, in areas like Emaar Beachfront, property owners have observed resale premiums of up to 120% compared to the original purchase price from 2-3 years ago. Similarly, properties in DIFC Living have seen approximately a 15% increase in resale value vs. the original price.”
A new group of Dubai property purchasers hopes to replicate those gains in the future. For the time being, they are looking at a furnished home that is ready or will soon be ready.
New trends will help Dubai real estate
The real estate market, which has grown for over three years, is constantly looking for new growth engines to continue its dynamics. If there is sufficient demand for the preparers, then you need exactly what you need for the Dubai real estate market. Because new buyers can easily use new demand for rentals that they don’t plan to become end users.
Premium for furnished homes
Dubai’s real estate sector is experiencing a “notable change” towards ready-to-move-in, furnished apartments. That being the case, such features attract “substantial premiums” due to their immediate usability. Developers in Dubai, never one to pass up an opportunity, are supporting this with targeted deals and flexible payment arrangements to satisfy demand.
