Flipping is unheard of within the residential belongings market due to pinnacle builders now requiring around 30 to 50 percent of the price before owners can promote it.
Flipping happening on commercial land
However, on the subject of commercial land, there is lots of flipping happening as expenses have rocketed through around 300 percent in the beyond couple of years.
Reasons for lack of flipping in the residential market
“As far as demand for residential units is concerned, whether you’re buying under Dh1 million or Dh10 million property, we don’t have traces of flipping because 90 percent of the market is controlled by top 15 developers. And reselling of the property by these developers is not allowed until you pay 30 percent to 50 percent, depending on the developer. Secondly, in most cases, there is an accelerated payment also. In my opinion, 90 percent of the people don’t have any intention of flipping,” said Imran Farooq, CEO of Samana Developers.
Definition of flipping
Farooq categorizes flipping as wherein belongings have been bought in under 12 months.
“Most of the buyers are pretty mature and they have a long-term vision and to diversify their investments in Dubai for living and long-term rentability.“
Flipping in commercial land
“As far flipping is concerned, the majority of the action is happening in lands, where we have seen 300 percent appreciation in the last 24 months. That is where active buying and selling is taking place and that is not an end-user item anymore. Commercial land, which was worth Dh20 million two years back, is where the majority of the speculators have stepped in. Limited speculation is happening with flippers in townhouses but that activity is very small. So flipping has moved from residential to commercial plots,” Farooq told Khaleej Times in an interview.
Developers restrict flipping
Angelika Egoschin, founder of Real Estate Blondies, also added that flipping doesn’t exist due to property developers mandating buyers not to sell before paying up to 50 percent of the unit’s price.
“Nowadays, demand is very high so developers are putting more restrictions. We had quite a high appreciation in prices in a short period since the pandemic… It is not risk-free and easy anymore. Because more people know about strategy now than Covid. And now the supply of off-plan is way higher than a few years ago. Because the market started to move again after Covid and there is a huge plan. Developers have tightened regulations around off-plan property. In Covid, it was possible to sell property based on a 5 to 15 percent payment. Many people entered the flipping market and ruined the prices so for the safety of the investors, developers require payment of up to 50 percent of property value to get the NOC to resell. This restriction made it harder to flip because now developers have put restrictions,” she said during a recent webinar.
Developers’ restrictions make flipping difficult
Imran Farooq brought up that the characteristics of the Dubai property marketplace are absolutely one of a kind now as compared to 2008 when humans used to negotiate loose transfers. “Today, you don’t have that feature because you need to register your Oqood and need to pay four percent upfront. So the chances of flipping are out completely. Secondly, because there is a ban on flipping the property before you pay 30-50 percent of the property, so gone are the chances of flipping the property. If 90 percent of developers have these conditions, then flipping doesn’t exist,” he added.
