As Dubai property market nears peak, ready homes get buyers’ full attention
Sellers with ready homes are asking for more - and getting what they demand
Dubai: Apartment owners in Dubai - those who bought for investment purposes - are finding now is a good time to be selling. And get some super-sized returns.
If it’s a ready home that they have to sell, buyers are willing to pay a premium for that. This is showing up in the prices that ready homes are selling for, as sellers look to land the best possible deals in a market that continues to pull in heavy demand. Across the established locations, property values are close to their 2014 peaks, while in the newer freehold hubs, latest deals show new price thresholds have been set.
Over the last few weeks, as offplan project launches dipped - for a summer break? - ready homes are catching a lot of the buyer attention. So much so, the gap in prices between offplan properties and ready homes have narrowed, by quite a bit.
Typically, offplan sales prices are higher by 20-40 per cent over ready units in the same location and for similar property types. In 2022, that gap had widened to even 50 per cent plus.
Through recent weeks, though, the price difference has shrunk at some of Dubai’s most in-demand locations.
Sell at the peak
“There’s a feeling among investors holding properties that the Dubai property market across locations is reaching its price peak,” said an estate agent. “These investors want to cash in close to/or at a market peak. Ready homes are the biggest beneficiary of this, which could be why the price gap with offplan is shrinking.
“Individual property sellers seem to be thinking that if developers are getting their prices, so can they.”
It’s happening on the Palm Jumeirah and at Dubai Marina, and in Downtown Dubai. Same for the Greens and the Views, as well as over at Meydan One and Dubai Creek Harbour. In fact, Dubai Creek Harbour is fairly buzzing these days, with buyers starting to find some real value in the completed towers at this emerging destination. (In Creek Harbour, average selling prices are topping the Dh2,000 a per square foot mark these days, after being stuck in the Dh1,800 range for an extended period.)
Even with the recent upswing in ready homes sales, offplan still has the edge overall. In 2021, ready home sales had taken the lead as end-user investors mopped up whatever was available in the market, thus setting off the post-Covid boom. In the last two years, offplan sales have come to represent well over 50 per cent of overall deals in Dubai.
Can this mini-boom in ready homes last?
“Right now, investors in Dubai are seeing more value in ready properties relative to offplan prices, or ready property owners have sweetened the deals with payment plans,” says a new report brought out by GCP-Reidin. “These incentives are readily available in the ready apartment space.
“The greater consistency in price increases of ready apartments has also allowed the gap with offplan to narrow by almost 15 per cent.”
Today’s sellers are even willing to spend more on sprucing up their properties if that means they can get more at the time of the deal. These makeovers have worked well for villa sellers - by getting a price boost - since 2021. The same can happen for investors looking to sell their upscale apartments.
According to a half-yearly report from Better Homes, apartment sales in Dubai were up a whopping 57 per cent in the period April to end June compared with a year ago. In comparison, villa and townhouse sales were down 9 per cent as this category awaited more launches and with limited ready units available for sale.
According to GCP-Reidin data, Business Bay, Downtown Dubai and Dubai Creek Harbour accounted for the biggest share of luxury offplan apartment transactions. And sellers with ready homes do not want to miss out on this action.
Multiple industry sources talk about these sellers with apartments in these locations testing out demand - and liking what they are getting by way of offers.
“One can expect a rise in sales of ready homes as investors cash out post-summer,” said an estate agent. “The feeling among sellers is they want to catch the peak of the Dubai property market. That’s happening now.”
Looking at the asking prices of ready homes, it sure seems to be the case…
Recent launches have seen the size of the property being trimmed, as developers cater predominantly to investor-buyers, who would then lease these units out.
This trend in the Dubai property market is not an isolated one.
“As has been the case in international markets, newer projects such as at Dubai Creek Harbour have smaller median apartment sizes than established communities,” says the GCP-Reidin report. “Overall, across 1-4 bedroom apartments, the older communities' median offplan size is 41.79 per cent larger on average than their newer counterparts. This indicates a higher value innate in the older communities.“