What Should Investors Look for in Dubai Real Estate?

Just like any real estate market, Dubai has undergone a lot of cycles in the past. There was a major peak back in 2005 that led to the crash in 2008. But it wasn’t long before the market made its way back to recovery and experienced an all-time high in 2014 but crashed again in 2018.

A lot of investors are taking a look at these cycles of ups and downs because in 2021, the market was once again at an all-time high. As an investor, keeping a keen eye on today’s market is crucial if you are planning to invest in Dubai's real estate market.

So to help you decide, here are some of the things you should look for in this year’s Dubai real estate market. 

Consider the End User

If you are going to buy property in Dubai, it is always good to make sure that the property is going to be used as an end-user.

The reason is that Dubai is experiencing extremely high population growth, and as a result, demand is high. So real estate developers would do anything to capitalize on this market and oversell their properties.

A good way of determining the end-use of the property is to check the progress of the project. If it is behind schedule, then there is a high chance the project was not sold right away and the developers have to go with whatever they have to generate revenue.

Another thing to look out for is the completed units on the ground floor units. If it is mostly empty, then it is a red flag.

Lastly, check for any signs of alterations. So even though the property is an apartment block, check for houses in the neighborhood. 

Look for Yield and Steady Return

This is an important factor to take into account, especially if you are looking to invest in Dubai’s real estate market.

Your rental yield will directly affect your return on investment. So if you are looking for anything below 5 percent yield, you will be looking at a very risky investment.

That is because the current market is already at a high in terms of rental rates. And people are not going to be jumping for rentals for a return that is way below the current market.

So it is always better to look at a project that offers a rental yield of 5 percent to 6 percent. That way, you will be getting a return that is above the current market value and the project will not be in the red.

If you are looking for a 9 percent to 10 percent yield, you have to look at a project that is already on the ground. So most likely, the project is already under construction.

Become an Old-Fashioned Flipper

There are still investors out there who like to go old-fashioned and flip properties. And this is in relation to speculative buying.

So basically, they will buy properties and then they’ll sell them on the secondary market to get a higher price. This is true for those who bought pre-launched real estate and then flipped them, giving them high triple-digit returns just within a few days or weeks. So when these flipped properties reach the end-user, the price has been doubled and even tripled.

Conclusion

With the current Dubai market at an all-time high, there are a lot of opportunities for investors. As with any other purchase, it is important to look at what you are buying. So ensure that you are getting something great for the price you are going to pay.

Dacha Real Estate is a top property agency that helps you successfully invest in Dubai’s real estate. We also  provide comprehensive property management services. Contact us today!