As the Dubai villa market matures, the emerging factor influencing buyers is now new versus older properties, says Simon Baker, Managing Director at haus and haus
Having grown up in an English village, in a home over 250 years old, Dubai has always been ‘brand new’ to me. The idea that any property less than 15 years old could be considered as old was difficult to get my head around.
Regardless of the way we choose to categorize a property’s age, villas and townhouses built over a decade ago certainly require some TLC and, in all cases, would benefit from an upgrading of internal finishes to bring them to a level that by today’s standards can be classed as a luxury.
Many of the villas and townhouse transactions we complete as a company are between an investor seller and end-user (typically finance) buyer. The fact that many of these properties have been rented to multiple tenants over the last decade has, for all but the most astute professional landlords left these homes in a slightly sorry state. Whilst the structures are usually very sound, the use of cheaper materials was from a period pre-2007 when prices were significantly lower – and things are now looking tired.
But then again, is this the only reason they look so dated or is it that the world has moved on and now expects an increased level of luxury? I suspect a combination of the two. By comparison, the same developers are today using much a higher caliber of internal finishes – this is naturally a big draw for Mr & Mrs end-user looking for the perfect family home.
This leaves all owners with a decision to make; Invest money in upgrading the older villa with the hope of increasing its value, or sell in ‘as-is’ condition.
The word ‘upgraded’ itself is a term used very loosely by brokers trying to express that their property has in fact been freshly repainted and as such is worth more than their next door neighbour’s identical unit type.
While leaving a property in good condition is a decent starting point, the properties attracting a true premium are the ones with high-quality upgrades – kitchens and bathrooms being high on a buyer’s agenda.
The demand for these renovation works and fit-outs has grown, in part due to the softening of the market in the past three years – meaning homeowners are more inclined to stay put and upgrade rather than sell to buy new again.
My waffle brings me finally to the question at hand – why would you buy a fifteen-year-old home in need of renovation if there is a brand new one just around the corner?
Well, everyone has slightly different priorities when it comes to buying their perfect villa, however, plot usually appears high on the wish list. How big is the garden? What about a pool? How is the outlook and direction? Is the property overlooked? Is it a favorable orientation north to south? Does it apply to the principals of Vastu?
At the risk of making a huge generalization, most of the newly completed and under construction options available today feature smaller plots than their older contemporaries. As such, the demand for villas with large, well-situated plots is bigger than ever – buyers are realising that the ‘brand new’ options will also slide into the old category in a few short years, and with a huge range of companies now offering home improvements, refreshing the interiors is no longer as challenging as it once was.
For those who can’t decide between all the ready properties, a third option presents itself – provided the home isn’t required for occupation soon – and that is following the route of investment buyers by purchasing off-plan.
Increasingly flexible payment terms are making the required fifty percent cash portion of the purchase more palatable with smaller down payments and construction linked installments. This method provides the potential for a growth in capital whilst being able to move into the dream ‘brand new home’ upon completion. This is clearly a popular option; figures for the first ten months of 2017 show 18,000 off-plan transactions as opposed to only 9,000 ready units.
In Dubai all that glitters can be gold, and buyers are voting with their wallets when it comes to purchasing the new versus old. As a company, we have helped numerous end users understand all the options open to them. Much of the time this involves a trip around the metaphorical block just to arrive at the same place we started at.
This is what we are here to do, to guide and advise on every step of the process. Not just to find a home that suits, but to ensure that you have eliminated all the options and can rest assured you are one hundred confident in your decision.
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Written by Simon Baker Managing Director haus & haus
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