The luxury real estate sector in Dubai is finding itself in somewhat uncharted waters at the moment. Incredible custom-designed mega-mansions are coming to market, and with skyrocketing demand, there is one burning question on the minds of prospective sellers and landlords: What price is right?
If we are talking about a home designed by a master-developer, either in its original condition or upgraded by the owner, the answer to that is relatively easy. You can look at the selling prices of comparable homes, of the market price in that area for that specific type of property, and nail down a value that will ensure a short realization period with little room for negotiation or offers.
When we’re looking at something that has been fully custom-built and really has no comparables – in the neighbourhood or anywhere in the city – things get a lot trickier. It is somewhat de rigueur now to read about a celebrity home in Los Angeles or a penthouse in Manhattan sold for a record-breaking price. Naturally, homeowners in Dubai may be tempted to follow that trend by listing at a stratospheric price point.
It’s worked out for some, such as the former owners of N100 on Palm Jumeirah who scored one of the most expensive property sales in 2021, or the seller of a mansion in Dubai Hills Estate that sold for a whopping Dh128 million this year.
Certainly, there is no dearth of buyers who are looking at homes in the 100 million+ bracket, but a higher price doesn’t necessarily equate to a more prestigious sales offering. We have been following and mapping out market trends in this space. For anyone who wants to understand how to price their prime or super-prime home in this bustling market, we have a few handy tips.
Rein in emotions
Buying a home is often an emotional decision – after all, this could be someone’s new home (or at the least, their new family winter getaway). Selling a home can become a very emotional process as well, especially when it comes to something built from scratch by the owner. With all of the thought that goes into the design and aesthetic, plus the time, effort and costs associated with construction, sellers will naturally be inclined to assign the highest possible value to their home when putting it on the market.
It’s a labour of love more than a piece of brick-and-mortar.
However, the price of your home needs to be based on practicality and sensible market research. As much as you may believe that your home is so unique that a buyer would be willing to pay any price, you need to understand where the market is and set a price that is realistic. This is also where it becomes hugely important to work with a real estate broker who is both knowledgeable and reliable – a good broker will back up their pricing recommendations with solid data rather than feeding you high-priced fantasies.
Data is key
This point really cannot be overstated, and it is one that applies just as much to a bespoke mansion in a private community as it does to a studio apartment in the middle of the city. You need to understand what homes are competing space, and what really makes your home stand out from the pack. What is the USP of your property, and how much value does that realistically add for a buyer?
The good news for sellers is that there is a shortage of supply in the luxury sector, while demand is higher than it’s ever been. This does make it far more likely that you will achieve your asking price on a sale, as it is unlikely that there is a similar home at a similar price point on the market right now. It’s important to understand that the push and pull of supply and demand does have its limits.
There might be a buyer out there who is willing to pay any price for your property because it is just so unique – realistically, you could be waiting a long time for that specific buyer to come around and market conditions may have fallen out of your favour by then.
Any property needs to be priced in accordance with the movement of the market to achieve a quick transaction on it. This applies just as much, if not more, if you want to put your property up for rent, or even as a holiday home.
Ensure that you are getting the right kind of advice when it comes to pricing your mansion. And more importantly, you should heed that advice for the best results. The ultimate aim should be to find a price that fits the property, suits the market and results in a relatively swift transaction.