E-Paper
Sign In
iPhone | iPad
Android
Mon, Dec 23, 2024 | Jumada al-Aakhirah 22, 1446 | DXB
0°C
Dubai: Flipping virtually non-existent in residential property
However, commercial property in Dubai sees massive flipping as prices skyrocket
Flipping is virtually unheard of in the residential property market due to top developers now requiring around 30 to 50 per cent of payment before owners can sell it.
However, when it comes to commercial land, there is a lot of flipping happening as prices have rocketed by around 300 per cent in the past couple of years.
“As far as demand for residential units is concerned, whether you’re buying under Dh1 million or Dh10 million property, we don’t have a traces of flipping because 90 per cent of the market is controlled by top 15 developers. And reselling of the property by these developers is not allowed until you pay 30 per cent to 50 per cent, depending on the developer. Secondly, in most cases, there is an accelerated payment also. In my opinion, 90 per cent of the people don’t have any intention of flipping,” said Imran Farooq, CEO of Samana Developers.
Imran Farooq, CEO Samana
Farooq categorises flipping where a property has been sold in under one year. “Most of the buyers are pretty mature and they have a long-term vision and to diversify their investments in Dubai for living and long-term rentability.”
“As far flipping is concerned, the majority of the action is happening in lands, where we have seen 300 per cent appreciation in the last 24 months. That is where active buying and selling is taking place and that is not an end-user item anymore. Commercial land, which was worth Dh20 million two years back, is where the majority of the speculators have stepped in. Limited speculation is happening with flippers in townhouses but that activity is very small. So flipping has moved from residential to commercial plots,” Farooq told Khaleej Times in an interview.
Angelika Egoschin, founder of Real Estate Blondies, also added that flipping doesn’t exist due to property developers mandating buyers not to sell before paying up to 50 per cent of the unit’s price.
Angelika Egoschin, founder of Real Estate Blondies
“Nowadays, demand is very high so developers are putting more restrictions. We had quite a high appreciation in prices in a short period since the pandemic… It is not risk-free and easy any more. Because more people know about strategy now than Covid. And now the supply of off-plan is way higher than a few years ago. Because the market started to move again after Covid and there is a huge plan. Developers have tightened regulations around off-plan property. In Covid, it was possible to sell property based on 5 to 15 per cent payment. Many people entered the flipping market and ruined the prices so for the safety of the investors, developers require payment of up to 50 per cent of property value to get the NOC to resell. This restriction made it harder to flip because now developers have put restrictions,” she said during a recent webinar.
Imran Farooq added that the characteristics of the Dubai property market are completely different now as compared to 2008, when people used to negotiate free transfers. “Today, you don’t have that feature because you need to register your Oqood and need to pay four per cent upfront. So the chances of flipping are out completely. Secondly, because there is a ban on flipping the property before you pay 30-50 per cent of the property, so gone are the chances of flipping the property. If 90 per cent of developers have these conditions, then flipping obviously doesn’t exist,” he added.
Waheed Abbas
Waheed Abbas is Assistant Editor, covering real estate, aviation and other business stories that directly affect the lives of UAE consumers. He frequently reports human interest stories, too.
Sign Up For Breaking News Alerts
Be in the know. Get the latest breaking news delivered straight to your inbox.
