Want to make even more profit from Dubai’s continued real estate boom? Take a look at the growing number of offers of ready-made or near-ready apartments for sale in some of Dubai’s trendiest residential areas.
And here’s another incentive: these apartments are offered fully furnished. The idea is that the builder or seller reduces the delivery time of the unit and the set-up time by the buyer. In fact, by buying a fully furnished apartment, the buyer can start renting it with immediate effect. (Or move for personal use, if that’s the purpose.)
Of course, these units ready or ready to be inhabited, with all the comforts, come with a high price tag, but at the moment, investors want to limit the time it takes to get a return on investment. “We have seen units that need to be delivered within 3 months be purchased – the advantage is that the buyer already has a tenant,” said a real estate agent. “The market is seeing a sharp increase in offers for apartments that are ready or about to be moved in, not only from property developers, but also from existing owners who want to monetize.”
The sources add that these buyers are looking for tenants for shorter stays, whether they are less than a year or at most one or two years. In some cases, future rent payments are the responsibility of the tenant’s employer.
- Firstly, the increased demand for Class A and super premium offices, some of which could be completed in the next 12 to 18 months.
- Two, for furnished homes in and near some of the newer and more luxurious office towers.
In essence, one set of demands lays the groundwork for another.
“In areas such as Downtown Dubai and Business Bay, high-quality furnished one-bedroom apartments can typically be rented for between 100,000 and 150,000 dirhams, while two-bedroom apartments can cost between 170,000 and 240,000 dirhams per year,” said Aakarshan Kahthuria, managing director of consultancy RiseUp.
“In these areas, the cost of rents is borne by expatriates, typically white-collar professionals, who consider immediate employment their first criterion and focus more on a trouble-free life.”
At Palm Jumeirah, furnished one-bedroom apartments can cost anywhere from 140,000 to 180,000 dirhams per year, while two-bedroom apartments cost from 250,000 to 320,000 dirhams, particularly “when paired with a super-premium address.”
Now, these kinds of numbers, and future returns, are just what investors want to subscribe to.
The ‘simple’ product is no longer sold
This explains the high number of branded service residency projects launched in Dubai, and also in Abu Dhabi, in the last two years. The current trend is that non-branded projects offer the possibility of furnishing the units as part of the purchase contract.
“Traditionally, off-plan properties dominated the market due to flexible payment plans and the potential for higher returns,” said Vasilii Fetisov, managing partner at Housebook Real Estate. “However, the demand for ready-to-use properties is increasing, prompting developers to react accordingly.”
This means that there are now offers with preferential payment plans and lower down payments even for units that are already ready or about to be ready. This, in itself, represented a turning point, allowing even individual property owners to adjust to the offers of real estate developers in the search for a new buyer.
Furnished apartments are particularly attractive for those who want to move in quickly or for investors who are aiming for immediate rental income,” Fetisov said. “This convenience often translates into a surcharge for these units.
For example, in areas such as Emaar Beachfront, property owners have observed resale premiums of up to 120% compared to the original purchase price 2-3 years ago. Similarly, properties in DIFC Living saw an increase of around 15% in resale value compared to the original price.
A new generation of property buyers in Dubai hopes to match those returns in due course. For now, they are looking for a home that is ready or soon to be ready, with furniture included.
New trends will help Dubai’s real estate market
A real estate market, especially one that has been growing for over 3 years, is always looking for new growth engines to maintain momentum. If there is enough accumulation of demand for ready-to-move homes, then it is just what the Dubai real estate market needs. Because new buyers can easily tap into new pockets of demand for rent, even in cases where they don’t intend to be end users.
Furnished Homes Award
Dubai’s real estate market is experiencing a “significant turn” towards furnished and ready-to-live apartments. In this context, these properties enjoy “significant premiums” deriving from their immediate usability. Dubai’s real estate developers, who never miss an opportunity, are supporting this trend with targeted offerings and flexible payment plans to meet demand.
