Luxury Dubai Property Renovations Double Return on Investment in 2024

Dubai property

According to specialists speaking with Arabian Business, Dubai property renovations are becoming a profitable investment plan for homeowners in some of Dubai’s most prestigious villa communities, where owners are reaping millions of dollars in profits.

Some high-end villa communities realize profits of up to 100%, or more than $10 million, shortly after remodeling costs about $3 million.

These renovations are more than just updates. Owners of villas or any Dubai property include ultra-luxurious amenities like bowling lanes, gyms, steam rooms, spas, and even movie rooms with indoor and outdoor pools. Completed to high standards, these improvements can raise about $10 million.

According to Street, Arabian Business, “The refurbished homes boast exclusive interior and exterior designs that rival or surpass new constructions in elegance and functionality.”

Rising real estate costs for opulent luxury Dubai property or villas are the main driver of this trend, as foreign demand for the emirate’s best homes remains unabated. According to the Valu Start Price Index, properties in Dubai worth more than $10 million have increased at one of the quickest rates in the world since the beginning of 2024. For the first time in ten years, the average cost of a villa in Dubai has surpassed $560 per square foot. Because of this, many homeowners have remodeled their homes to satisfy the desire for uniquely designed luxurious living areas.

Dubai property improvements are also increasing in places like Jumeirah Park, The Lakes, and Jumeirah Islands. The majority of these areas have witnessed a rise in sale prices of more than 20% year over year, according to Cushman & Wakefield Core data.

“After renovations, these villa districts can command and achieve substantial premiums because of their central locations with well-established schools and amenities as well as their spacious layouts,” stated Prathyusha Gurrapu, director and head of research and consulting at Cushman & Wakefield Core.

There is a desire for investors to buy a turnkey Dubai property

Regardless of the property’s age—10 or 2 years old—fully renovated, turn-key Dubai property or villa presents the most profitable chances, according to Dubai’s real estate professionals searching for optimum profits.

Investors are not ready to pay a premium for partial upgrades because they can purchase a standard villa unit for the same amount. It seems that everything has to be done if remodeling increases.

A recent international real estate consultant Knight Frank study states that 57% of high-net-worth people (HNWI) looking to buy Dubai property this year prefer fully furnished turnkey homes. According to Street, many purchasers for completely furnished and remodeled villas, as if they were “literally coming to the country and moving in straight away.”

Renovations determine prices for villas:

While it can be difficult to pinpoint the precise worth of a given modification, Dubai property owners should concentrate on identifying the renovations required to attract higher prices based on past listings.

The Dubai property priced between $9 and $10 million has spacious bedrooms, walk-in closets in the master suite, a pool, and an office. A movie theater would be expected in properties sold for more than $11 million, and properties listed for more than $12 million would likely contain larger rooms, a gym, a wellness center, and more family and visitor entertainment spaces.

Rearranging rooms and layouts to suit different lifestyles is another aspect of renovations. Updated features in bathrooms, kitchens, and living rooms not only increase the value of a property but also provide countless customizing options.

Trends in renovation that increase a property’s worth

The founder and director of the design-architecture firm Elicyon, Charu Gandhi, asserts that it is no easy feat to add opulent facilities to a building to sell it for $20 million whose skills were crucial to the One Palm penthouse’s record-breaking $28 million sale.

Very high net worth clients see a lot of high-quality projects, and they pick up on poor quality work quickly,” Gandhi stated. it is not a good idea to work on quantity for its own sake.

The Dubai property buyers are getting pickier about the design and chic layout of the room, high-quality finishes are occasionally a better value addition than tack on a health spa.

Good quality door handles, lighting, and switches are value-added improvements for people to see and touch. To provide each area its unique sound insulation, she also mentioned how important good acoustics can be.

Sustainability is the top priority for rich people

Gandhi says that among HNWI purchasers, longevity and sustainability are important. “We are finding that our clients are becoming concerned with sustainability as a topic and want to know where products and materials are sourced from as well as the history of the legacy.”

Even though some clients spend as much as $4 million on upscale finishes and materials, money allocation can be more skillfully handled with proper planning and knowledge.

Dubai property owners might only need to spend between $500,000 and $800,000 and still achieve results that look like they’ve spent $1.5-$2 million if they know the right contractors and construction to use. The cost of renovations will vary depending on the size of the plot and the materials used.

However, industry analysts warned that no matter how much you budget, the cost of home renovations will rise above the average in Dubai’s residential real estate market.

According to Anton Kaptur, Head of Project Management at Colife, “It gets expensive to renovate an apartment [or villa] in Dubai every year.” He also predicted that the average cost of renovations will rise by an additional 10% in 2024.

“The rise in the market prices of the Dubai property and villas is accompanied by an increase in the prices of labor and materials,” said Kaptur.

Industry participants reported that the cost of furnishings and building supplies has increased, and work performed by contractors has also given a project enough time to figure out what you want from it at the outset is crucial, as doing otherwise sets it up for failure. Gandhi went on, “It’s to receive advice from an expert on the best way to divide the money and when to make the big improvements to the property.”

This article explores the effectiveness of Dubai property renovation as an investment strategy in Dubai’s real estate market. It highlights the benefits of property renovation, such as increased property value, faster sales and rentals, enhanced rental yields, and market differentiation. and also discusses the challenges and considerations of property renovation, including the cost, regulatory hurdles, market timing, and quality of the renovation. It provides case studies of successful renovation projects in Dubai and concludes that property renovation can be a viable strategy for investors to maximize their returns in the city.

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