Demand for renovated homes in UAE 'as high as ever'

As more buyers look for upgraded properties, more investors are purchasing houses to flip

Natasha Hatherall has renovated a three-bedroom apartment on Palm Jumeirah. Photo: Natasha Hatherall
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Demand for property in the UAE that is fully renovated and upgraded is “as high as ever”, real estate experts have told The National.

There is an increasing number of buyers, particularly from Europe, looking to buy houses ready to move into, they said.

This in turn has driven more property investors to buy houses to renovate and sell on at a profit, a strategy widely referred to as flipping.

“I'd say the majority of flipping has happened over the past two or three years,” said Jamie Grimshaw, co-owner of Luxury Invest Group, which has offices in the UAE and the UK.

“After Covid, everyone wanted more space or a new house as they were spending more time in their properties. I think this fuelled this investor-led house flipping market as there was demand for something completely done, brand new and I'd say this demand is as high as ever.”

'A little side hustle'

Natasha Hatherall, founder and chief executive of TishTash marketing and public relations agency in Dubai, recently started a side business flipping houses with her husband.

“We’ve bought and sold two properties that were our homes here in the UAE and we’ve enjoyed renovating them and selling for a good profit to help us go up the property ladder and boost our equity,” she told The National.

“Given we have learnt a lot about property and renovation, coupled with the fact that we enjoy it, it makes sense as we start planning for our retirement to make this a little side hustle.”

The long-term Dubai resident said this is not a new concept here.

“You only have to think back to the early days with the new developments being bought and sold a day later at a high profit. This still continues with the vast number of off-plans sales,” she said.

“Now, though, we’re also seeing a lot more renovation and flipping, as properties in the country age and offer a great canvas for renovation, space optimisation and upgrades to add value.”

Increased confidence in the market is also key, she added.

“Ultimately, the country is maturing and growing and this comes with it,” said Ms Hatherall.

“It’s great to see more unique properties coming from it too.”

'Running at full speed'

While most investors are looking to upgrade older properties across the country in areas such as the Springs or Meadows, estate agent Ricardo Scala started flipping houses in the newer Sidra communities in Dubai Hills Estate almost three years ago.

Recently, he finished a 10-month renovation on a four-bedroom property in Sidra 2, which he bought for Dh6.5 million and is now selling for Dh13.5 million after investing about Dh3 million for renovations, excluding costs paid to Emaar for the extra square footage.

“The community is amazing, but the villas are mediocre and they deserve to be made so much better due to the location,” he told The National.

The secondary market side of things is very much now in force, running at full speed. If I had the funds to do 10 to 15 renovations at once, I would
Ricardo Scala

There are now three sectors within the property market, he said, and those are apartments, standard villas and renovations or brand-new builds.

Last year, a total of 118,993 residential transactions were registered in Dubai, the highest total recorded to date, with off-plan sales growing by 31.9 per cent in this period, and secondary market sales increased by 26.3 per cent, according to CBRE's UAE Real Estate Market Review.

“The secondary market side of things is very much now in force, running at full speed,” said Mr Scala.

“If I had the funds to do 10 to 15 renovations at once, I would, because so many people want this.”

Mr Grimshaw agreed.

“There are probably more end users looking to just move into this perfect property and, effectively, they're just financing the renovation, instead of having to pull all of the cash in and renovate it themselves,” he said.

It's not just villas, either, he added, as it's becoming common in apartments, too, including on Palm Jumeirah and in Dubai Marina.

Ms Hatherall is currently selling a three-bedroom apartment on Palm Jumeirah and with the money they make on that property, they will have enough to pay off their mortgage on their next home, plus buy one or two more to start renovating at the same time.

“The idea being to scale up and keep investing back in,” she said.

To do that, it's imperative to be realistic when budgeting, she added.

“Add a third of extra time and budget to any project,” said Ms Hatherall.

“Also make sure you factor in any fees – land fees, estate agent fees, etc – which can add up and take a lot from potential profit.

“Make sure you are clear on all costs you need to factor in or you could do a lot of work for little to no profit if not budgeted properly.”

Interiors with wide appeal

It's also important to design interiors that have mass appeal, said entrepreneur Stephanie Farah, who recently renovated her own three-bedroom home in Springs 10, which she bought in 2022 for Dh2.65 million.

Now she's getting offers of up to Dh4.8 million every day and she enjoyed the process so much she's moving into the flipping market.

It also inspired her to start an interior-upgrade company called The Tile and Wrap Society, which specialises in architectural wrapping and 3D stickers.

“Choose a design that's going to appeal to a wider audience versus your own taste. Modern farmhouse is very popular, for example,” said Ms Farah.

“I've walked into Springs villas that were renovated, but they were hideous, with the colours that they chose on cabinets, counter tops, tiles and nothing matched.

“Then they would try and sell it for an extortionate amount and that just made no sense because nobody was buying it.”

Mr Grimshaw said contemporary and minimalist European styles are very on trend across the market.

“You have to look at the people who are actually buying these properties once they're finished and, predominantly, I'd say a heavy portion are Europeans,” he said.

“We sell a lot of properties in the UK as well and if you look at all the projects that are being built, they're generally very similar in style; very modern, with a contemporary finish.”

Statement walls and multipurpose rooms are also popular, said Ms Hatherall.

“Our plan for all properties is high-quality, contemporary but flexible living space to work to modern-day family needs,” she said.

“For example, rooms that can be bedrooms, offices, dining rooms, TV rooms – whatever that household needs.

“We are all about maximising space, but we also make each one different so there is personality and a uniqueness.”

Mr Grimshaw, who is currently embroiled in a court case with a contractor stemming from renovations on his own home, advised anyone looking to get into the market to find a reliable team first.

“I would say only use a contractor that one of your friends or someone that you know has used before and they've completed the job and they're happy with it,” he said.

“Because, otherwise, that whole industry is really poorly regulated and monitored.”

The challenge doesn't put him off, however, as he plans to flip houses in the near future, too.

“I think you just have to have a little bit of flexibility,” said Mr Grimshaw.

“Make sure you know the market of the area you're entering and make sure you pick the right contractor. And then there are huge profits to be made in that market.”

Updated: May 26, 2024, 9:30 AM