The Dubai property market is experiencing unprecedented growth, but not all projects are keeping pace.
Challenges Faced by Projects
Let's start with a panoramic view of Dubai. The city is continually evolving, creating innovative and creative new communities that surpass those from a decade or two ago. Investors must ride the right wave by selecting projects with enduring value. I categorize the market into two segments: the primary market (during construction) and the resale market (completed properties). The success of a project lies in end-user demand, determining its enduring value. Two main factors contribute to the challenges faced by some projects. Firstly, a few projects never recovered due to investors paying massively overpriced amounts a decade ago. This occurred mainly at the developer level, where inadequate research led buyers to buy properties that were overpriced in every way. Secondly, the introduction of a new generation of properties impacts supply and demand dynamics. As seen in Business Bay, newer projects with better features overshadowed older ones, affecting their demand and growth.
Exploring Hidden Opportunities
Now, onto the hidden gems often overlooked in the market. These underpriced and unnoticed projects present a golden opportunity for investors seeking rental income. Consider prime examples such as U Bora in Business Bay which you can buy today at more or less the same price as 10 years back, Mada Residences 2014 was sold for an average of 1600 dirhams per sqft and today you can buy from the resale market at 1800 to 1900 dirhams per sqft only, RP Heights in Downtown the same more or less as Mada Residences and both are strategically located 30 seconds walking to Dubai Mall, like literally just across the road. This does not only apply to apartments but also lands, such as the freehold villa plots in Jebel Ali Hills. Remarkably, plots sold a decade ago for 150 AED per sqft are now available at an enticing 250 to 300 AED per sqft. The absence of marketing hype, driven by excessive commissions to real estate agents, has obscured the true potential of these apartments and plots of land. Any individual with average real estate experience visiting these projects will realize the opportunity to acquire units that are underpriced compared to the broader market.
Strategic Investment Approach
Investors should strategically exit projects facing declining demand and seize opportunities in emerging projects. Investors have to also be very careful about overpriced projects that have massive marketing budgets behind them. Nevertheless, there are many genuine cases where new developments have massively outperformed the old projects. The appeal of new developments lies in providing a superior living experience, starting with design, amenities, ceiling heights, modernity, insane amenities and facilities, and much more. particularly those post-COVID, where the appreciation of a quality living environment has become pivotal in every new development's planning. This exploration provides a comprehensive guide for smart investors looking to unlock Dubai's diverse property landscape, offering insights into both the booming market and the hidden gems that often go unnoticed. It navigates through both the success stories and challenges, providing a holistic view of Dubai's real estate odyssey.