Dubai Keen To Trim Property "Flipping"

The Dubai freehold property market has made a lot of people a good deal of money. With prices increasing in the range of 800% since 2002, if you got in early you certainly reaped the benefits and even recently good money has been made by many investors who have bought wisely. How have these investors achieved there success you might be inclined to ask? Well the Dubai property market since the introduction of freehold ownership for foreigners has been characterized by ‘flipping’. This is simply the act of purchasing and then quickly selling a property at a profit. This is a tactic that has had phenomenal success in Dubai, with properties quickly changing hangs such is the demand for real estate here. And in many cases, due to the installment payment systems in place, many investors are able to sell on their property at a profit having sometime only paid 15% of the properties value since buying Dubai off plan property.

Clearly this has great short term benefits to the investors and owners of the properties being sold, but the long term effect on property prices is certainly not so beneficial. Such selling methods lead to high levels of speculation and a potential overvaluation of property prices, which will inevitably lead to correct at some point in time. In order to maintain some stability in the freehold property market, Dubai’s two main property developers, Emaar and Nakheel has brought about measures to ensure owners must hold on to their properties for a year or so before reselling. And such measure could soon be in force across all Dubai properties if the Dubai Real Estate Regulatory Authority acts upon their reported intentions to make such measures law. 

So what is the effect for buyers and sellers of Dubai property? Well for the most part it will be beneficial. Those looking for a quick buy and sell will no longer find this so easy, but then recently as the market has matured, there has been less opportunity for such tactics. Dubai property will still offer great investment potential, but the introduction of any such law will allow the market to avoid overheating based on speculation, which can only be a good thing. Hopefully this can go someway to help the Dubai freehold real estate market to maintain a good level of growth whilst also increasing stability within the market. It will also help to minimize the risk of a sudden downturn in prices, which I think all involved in Dubai property will agree is a good thing.    

For Dubai Property Sale or Property Dubai we can always assist.
 

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