Fri, Nov 15, 2024 | Jumada al-Awwal 14, 1446 | DXB ktweather icon0°C

Dubai: Property owners rake in up to Dh15 million in profits by flipping units in 4 years

According to experts, profit margins rise further for those who do upgrades on their properties

Published: Thu 26 Sep 2024, 6:00 AM

Updated: Thu 26 Sep 2024, 7:43 PM

Top Stories

Several Dubai residents who bought property during the Covid pandemic and in its immediate aftermath are cashing in on soaring property prices in the city — with some raking in up to Dh15 million in resale of their units.

“While many buyers from 2020 to 2021 are holding onto their investments due to significant market improvements, we're also witnessing a notable trend of property flipping, especially in central areas like DIFC and Downtown Dubai,” said Lewis Allsopp, chairman of Allsopp and Allsopp group.

“This is fuelled by the desire to capitalise on the current market upswing. In some cases, particularly in villa communities, we've seen investors achieve remarkable profits, with some reaching as high as Dh15 million.”

Stay up to date with the latest news. Follow KT on WhatsApp Channels.

Dubai property prices have increased astronomically in the last three years as thousands of expats, including high-net-worth Individuals (HNWI), have flocked to the country.

Louise Heatley, owner and managing director of Exclusive Links Real Estate Brokers, said the profit margins of resale were higher in some areas. “On the conservative side, profits have exceeded 30 to 40 per cent,” she said.

“However, in highly sought-after areas such as Downtown Dubai, Palm Jumeirah and Dubai Marina, we have seen properties double in sale value since the trough of the market in 2020. Also in off-plan, Tilal Al Ghaf is a great example of an off-plan project launching in a Covid price environment and now owners are selling with 100 per cent return on investment.”

Upgrade properties

According to experts, the profit margins are higher for those who have upgraded their properties.

“We have seen Garden Homes on the Palm Jumeirah that were originally purchased for Dh8 million to Dh10 million being refurbished and re-entering the market to be sold at more than Dh50 million,” said Louise.

Dubai resident Mansoor Ali is among those who upgraded and flipped a property. He bought a villa in Dubai Hills in 2021 for Dh3 million. In a span of three years, he added some beautiful landscaping and built a pool. He also redesigned the home to have one extra bedroom on the first floor. Earlier this year, he sold the villa for Dh8 million, earning a profit of more than 150 per cent.

Mansoor Ali's flipped property

Mansoor Ali's flipped property

“I have been investing in properties in the UAE for a while now,” he said. “However, I did not expect that kind of profit. Dubai Hills got a lot of appreciation in the last few years, thanks mainly due to its location and the really good facilities of the community.”

Lewis Allsopp, Chairman of Allsopp and Allsopp group.

Lewis Allsopp, Chairman of Allsopp and Allsopp group.

Lewis said the demand is very strong for such renovated properties. “These properties are often selling quickly, even before they're officially listed, and are commanding premium prices,” he said.

“This trend reflects a growing preference among buyers for high-quality, move-in ready homes with unique features, rather than the standard offerings from developers. Many investors are recognising this demand and focusing on renovating properties to capitalise on this lucrative market segment.”

Trends

Those who are selling their properties are not holding on to their profits, instead choosing to reinvest the money. “Most sellers are reinvesting their profits back into the market, often in newer off-plan developments or upgrading to more premium properties,” said Louise. “Dubai’s evolving real estate landscape offers a continuous stream of opportunities, and savvy investors prefer to keep their capital circulating.”

According to Lewis, even though many people have made significant profits flipping their properties, the margins are likely to cool off, especially in villas.

“Flipping properties, particularly one-bedroom units or lofts in prime locations, can yield substantial profits,” he said. “We've seen clients realise gains of up to 25 per cent within just a few months. However, profit margins in villa communities are shrinking due to increased fees from master developers.”

In addition to this, there are some other trends that experts have noticed. “There’s a rising interest in sustainable, eco-friendly properties as buyers become more conscious of energy efficiency,” said Louise.

“The luxury market is also booming, with high-net-worth individuals seeking unique properties, especially in waterfront locations and branded residences. Off-plan sales continue to dominate the market share of transactions. We are also seeing a rise in buyers demolishing villas and rebuilding in areas like Emirates Hills and Palm Jumeirah. This is starting to reveal what buyers are willing to pay for prime land.”

ALSO READ:



Next Story