The UAE property sector is currently a seller’s market, with prices continuing to rise higher on investor sentiment, efficient handling of the Covid-19 pandemic and the government’s fiscal and monetary stimulus measures, real estate experts say.
However, if owners are planning to sell their properties, they should remember that certain renovations could reduce the value of the house rather than add to it, according to experts.
Average residential property prices rose by 11.3 per cent in the first quarter of this year, real estate consultancy CBRE said in its market snapshot. Average apartment prices were up by 10 per cent and villa prices by 20.2 per cent.
“While the original recovery of demand seen at the start of this price cycle was driven by existing residents taking advantage of value in the market, recent demand has largely been driven by the influx of new residents to Dubai,” real estate broker Better Homes said in a recent report.
“Overseas investors have also continued to drive demand as Dubai has increasingly become considered a safe-haven destination in the face of Covid-19, tax rises and global instability. Visa reform, social reforms and a general open-arms approach to new residents are in stark contrast to many traditional expat cities around the world and it is likely that this recent influx will continue for some time while Covid-19 continues to cause serious issues in the Far East, and tax rises and geopolitics continue to loom large in Europe.”
Here, we talk to property experts about the top five renovations that could harm the value of your property. Make sure you avoid them if you are planning to list your property for sale.
Personalising your home
Any upgrades that are overly personalised can hurt the value of your home, says Paul Christodoulou, chief executive of Aqua Properties.
“Things like wallpapers and tiling can be very taste specific. The same goes for other home details such as wall carvings, carpeting and expensive painting jobs,” he says.
Heavily stylised properties may not always be to everyone’s taste. This could limit the number of interested buyers when it comes to selling your property, says Richard Waind, group managing director of Better Homes.
“The more permanent or expensive it is to reverse a renovation, the more it can impact buyers,” he says.
Wallpaper and brightly coloured walls can be a real turn-off for prospective buyers, says Lewis Allsopp, chief executive of Dubai broker Allsopp & Allsopp. In some cases, they can’t see past the decor to imagine the home as their own, he says.
If you’re planning to sell your home, go with traditional white tile flooring and simple, light-coloured walls, Mr Christodoulou suggests.
Combining or converting bedrooms can be a costly mistake. As a general rule, properties with more liveable rooms and bedrooms generally sell for more, Mr Waind says.
Therefore, knocking through bedrooms to make larger rooms, but reducing the number of actual bedrooms could affect the price, he says.
“When owners start eliminating bedroom space, they’ve completely changed the comparable value of their home in the neighbourhood,” Mr Allsopp says.
Brokers pick top three areas to rent in Dubai – in pictures
While combining small bedrooms to create a bigger room or converting a room for office space can be good for couples, it may not be beneficial if you don’t plan on staying long term, Mr Christodoulou says.
“Each bedroom adds value to your home. Imagine if your potential buyer has children, they would want separate rooms for them even if it’s small,” he says.
Any house renovations that have not been granted the required no-objection certificates (NoC) and approvals can hinder sales and affect desired selling prices, says Better Homes’ Mr Waind.
“Buyers may look to reduce the buying price if they find renovations do not have approval. In many cases, the renovations will need to be restored to the original state before NoC for transfer is granted,” he says.
Also, if the home owner adds an extension that is low quality, this can sometimes have the opposite effect and can look like an annex and an eye-sore when looking at the property from the outside, Mr Allsopp says.
“If the renovations diminished your place being Vaastu-compliant, it will not only decrease the number of potential buyers, but you also need to spend again to restore its original orientation and design symmetry,” Mr Christodoulou says.
Although it is exciting to have a lavish garden, it is vital to do your research before planting, Aqua Properties’ Mr Christodoulou says.
“Find out what type of plant will not ruin your home in the long run. There have been reports of trees growing big roots too quickly that crawl up, ruining tiles, flooring, interlocks and pools,” he says.
“Not only will it cost you to repair [the damage], but the tree removal can also set you back by a hefty sum. Some trees also tend to shed more leaves than others. This can make your landscape messy and hard to maintain.”
Bathroom and kitchen renovation
Removing a bathtub or wardrobe space can be detrimental to the value of a home, Mr Allsopp says.
“Some buyers like to have the option of a fully functional bathroom and nearly everyone has storage space at the top of their ‘essential property attributes’ list. Taking this away to extend the space in a room or to extend a bathroom can turn potential buyers away,” he says.
Similarly, although it might be tempting for owners to convert an open kitchen to a closed one, this could affect the property’s resale value, Mr Christodoulou says.
“When remodelling, try to concentrate on areas of the kitchen that are outdated or worn out. Also, buy mid-range appliances instead of more expensive high-end alternatives.”