Flipping Residential Properties in Dubai Almost Nonexistent

The practice of “flipping” properties quickly after purchase is rare in the residential real estate market in Dubai. This is largely down to the fact that major developers now require substantial upfront payments—between 30% and 50%—before resale is permitted. Previously, properties could be resold after payments of between 5% and 15%.

Despite this, the commercial real estate sector has seen a growth in ‘flipped’ properties in recent years, with land prices experiencing a shocking 300% increase.

Imran Farooq, CEO of Samana Developers, explains that because Dubai’s leading 15 developers control 90% of the market, the opportunity for flipping residential units is almost unseen. These developers typically do not allow the resale of properties unless a significant portion of the purchase price has been paid. Moreover, there’s often an accelerated payment schedule involved, Farooq notes. He defines flipping as the resale of a property within one year of purchase, emphasising that most buyers are looking for long-term investment and residential stability in Dubai.

Farooq further comments that the commercial sector is buzzing with speculation, which is a stark contrast to the residential market, particularly in neighbourhoods that witnessed a huge 300% appreciation in land price over the last two years. Here, the market dynamics are driven by active trading rather than end-use, with commercial lands that were valued at AED 20 million two years ago now being prime targets for speculators

Farooq also pointed out the progress of Dubai’s property market compared to 2008. He said that back then, free transfers were common negotiation points, but today, all transactions must be registered with a 4% upfront fee, and flipping is generally banned until substantial payments are made. Given these conditions, set by 90% of developers, the flipping of properties is effectively off the table.

Original article reference: Khaleej Times.


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