Signs That You Should Sell Your Home Now

Dubai's real estate market has been on a remarkable upswing, breaking records and attracting investors worldwide. However, certain signs indicate it might be the right time to sell your home in Dubai. Considering the current state of the real estate market in Dubai, let's explore the signs that suggest it is time to make a move and sell your property.

Rapid Price Appreciation

One of the most obvious signs that it is time to sell your home in Dubai is rapid price appreciation. Over the past year, Dubai has experienced an extraordinary surge in property prices, with an average increase of 16.4%. It is the largest annual increase in over a decade. The price of property in Dubai is currently at AED 1,281 per square foot. This price is 4% higher than the highest ever recorded in September 2014 when the market peaked. If you have owned your property for a long time, there is a high chance that its value has appreciated a lot. Selling now can allow you to maximise your return on investment and capitalise on the rising market.

High Sales Transaction Volumes

Another strong indicator that it is time to sell your home in Dubai is the high sales transaction volumes. In the last three months, i.e. December 2023, January 2024, and February 2024, over 25,580 properties (apartments, villas, and townhouses) have been sold. These properties generated a combined sales value of AED 67,997,619,670. On average, each property had a built-up area of 1,417 square feet and sold for AED 2,658,442. The average plot size for these properties was 4,103 square feet, with an average price per square foot of AED 1,723. The high sales transaction volume indicates a strong demand for properties in Dubai.

Breaking Price Records

Dubai's real estate market has witnessed several instances of breaking price records, especially in the luxury segment. For example, a penthouse in Palm Jumeirah recently sold for AED 500 million, breaking the apartment price record for the third time in a year. Such records indicate a strong market and can be a motivating factor for selling your property, especially if you own a high-end or luxury property.

Mortgage Transaction Volumes

If you are considering selling your home in Dubai, the increasing mortgage volumes can be an encouraging sign. Dubai's real estate market recently surpassed a new annual record, with over 35,000 loans issued. It is a 27.5% increase compared to the highest number of loans given out in any previous year. A big reason for this increase is that developers and big investors who buy properties in bulk are getting more loans. Their loan market share has grown by 5.5% to 19.0%.
 

There were 491 bulk loans issued for various projects in January 2024. Some of the notable ones include:

• Rukan Tower 3 in Rukan 51 loans
• South Residence 1 in Dubai South 42 loans
• Creek Views I in Dubai Healthcare City II 19 loans

Loans for refinancing existing mortgages and releasing equity from properties increased their market share by 1.2%, reaching 36.3%. The average loan amount borrowed was AED 1.79 million, with a loan-to-value ratio of 75.4%. This means borrowers borrowed about 75.4% of the property's value as a loan.

High Rental Yields

Selling the property might not be the first choice for everyone, but the relatively high rental yields in Dubai can make it an attractive option. Gross rental yields have remained relatively stable at 6.8%, with a slight increase of 0.15% compared to the previous year.
 

The first two months of 2024 recorded a total volume of 65,436 rental contracts. The total yearly rent price amounts to AED 4,873,005,486 so far. On average, the rent price per contract is AED 74,470, with an average built-up area of 1,217 square feet per property.
 

If you are an investor looking for passive income, selling your property and reinvesting the proceeds in other income-generating assets might be wise.

Future Outlook and Market Forecast

The real estate market has experienced remarkable growth, but there are indications that price appreciation might slow in the coming years. There are over 150 projects in the planning and pre-launch stages. We anticipate the rapid pace of new project launches will continue throughout the year's first two quarters. Moreover, there is a trend of new and smaller developers entering the market.
 

In 2023, close to 100,000 new residential units were launched, and this trend is expected to continue, with over 40,000 units anticipated for this year. The supply of properties is set to increase even further over the next 3 to 5 years. As these new projects are completed and units become available for occupancy, the balance between supply and demand will shift, favouring buyers and tenants. This trend is likely to put downward pressure on prices.
 

Population growth will play a crucial role in absorbing the increased supply. In 2023, Dubai experienced approximately 3% annual population growth, with a steady monthly growth rate of 0.25%. The growth rate needs to increase to accommodate the upcoming supply without facing oversupply issues and entering a market downturn.

Conclusion

Considering the current dynamics of the real estate market in Dubai, it may be advantageous for property owners to sell their properties. The remarkable growth experienced recently and an anticipated increase in supply over the coming years might lower property prices in the future. So, it is the right time for sellers to capitalise on the market's current conditions.

Ready to sell your home? Trust Betterhomes to help you get the best deal! Contact us today to get started.