When is the best time to sell an investment property?

Best and Worst Seasons for Selling an Investment Property in Dubai

Understanding the seasonal dynamics of Dubai's real estate market can help you determine the best time to sell your investment property.

Summer Season

Dubai's summer period, particularly during the months of June, July and August, tends to see a slowdown in real estate activity. The extreme heat and the school holidays lead to a large number of expatriates choosing to leave the country over the summer and this is also a quiet period for international visitors. 

These factors contribute to reduced buyer interest which has historically meant that it has taken longer to sell an investment property at a favourable price during the summer period. However, this trend has been shifting in recent years. Recently, we have seen a more stable property market during the summer with an increasing number of residents staying in Dubai during these months.

Winter Season

The winter months, particularly from November to February, are generally considered the best time to sell an investment property in Dubai. The cooler weather attracts tourists and potential buyers, leading to increased market activity. Additionally, major events like the Dubai Shopping Festival can boost interest in real estate.

Ramadan and Eid

The holy month of Ramadan and the Eid holidays can also impact the property market. While some buyers might be less active during Ramadan, the post-Eid period often sees a resurgence in interest, making it a potentially good time to sell.

Factors Influencing the Best Time to Sell an Investment Property

There are several economic and market factors that can influence the best time to sell your property.

GDP Growth

Increasing GDP typically indicates a strong economy, which can boost investor confidence and increase property demand. Monitoring Dubai's current and expected GDP growth can provide insights into the best times to sell your investment property. As of May 2024, The International Monetary Fund (IMF) projected strong economic growth for United Arab Emirates, with overall real GDP expected to increase by about 4% this year, higher than earlier estimates. 

Inflation Rates

High inflation rates can erode purchasing power and lead to high interest rates, making it harder for potential buyers to afford property. Conversely, low inflation rates lead to lower interest rates and can make real estate more attractive to investors, providing a good opportunity to sell. 

Since 2022, interest rates have increased by more than five percentage points as the US Federal Reserve battled to reduce inflation. This has made mortgages more expensive, which could dampen demand for property. However, interest rates have not increased since late 2023 and the Fed is expected to start cutting interest rates in the second half of 2024. This could boost demand for real estate, providing a good opportunity to sell. 

Current Supply and Demand

The balance of supply and demand in the property market is crucial. An oversupply of properties can drive prices down, while high demand with limited supply can lead to higher selling prices. Understanding current market conditions can help you determine the best time to sell. 

Property Type and Location

The type and location of your investment property can significantly influence its marketability. Prime locations and high-demand property types, such as luxury apartments or commercial spaces, often sell faster and at better prices. Understanding the demand for your specific property type and location is essential.

Historical Price Trends

Analysing historical price trends can provide valuable insights into the best times to sell. Look for patterns in property price fluctuations over the years to identify periods of peak prices.

Forecasted Market Changes

Staying informed about future market forecasts can help you time your sale strategically. Anticipated changes in the market, such as new infrastructure projects or regulatory changes, can impact property values.

Tourist Seasons

Dubai's tourism industry can also influence the real estate market. High tourist seasons, such as the winter months, often lead to increased demand for short-term rentals and investment properties. Selling during these periods can be advantageous.

Top Areas in Dubai to Sell an Investment Property

Certain areas in Dubai are known for their high demand and strong property values. Selling an investment property in these locations can yield higher returns.

• Downtown Dubai: known for its iconic landmarks and luxury properties.

• Dubai Marina: Popular among expatriates and tourists for its waterfront living.

• Palm Jumeirah: Renowned for its exclusive villas and high-end apartments.

• Business Bay: A growing business district with a mix of residential and commercial properties.

• Jumeirah Lake Towers (JLT): Offers a variety of property options with strong rental demand.

Indications that it is Not a Good Time to Sell an Investment Property in Dubai

There are certain indicators can suggest that it might not be the best time to sell your investment property.

Economic Uncertainty

During times of economic uncertainty, such as global financial crises or regional instability, property prices can be volatile. There could be lower demand from buyers, who are also more likely to heavily negotiate on price. Selling during these periods might result in lower returns.

Oversupply

An oversupply of properties in the market can drive prices down and make it harder to sell at a desirable price. Monitoring construction activity and new property launches can help you gauge market supply.

Government Regulations

Changes in government regulations, such as new taxes or property laws, can impact the real estate market. Understanding the regulatory environment is essential before deciding to sell.

Conclusion

Timing is crucial when selling an investment property in Dubai. By considering seasonal trends, economic indicators, and market conditions, you can make an informed decision that maximises your returns. Keep an eye on the factors influencing the market and stay updated on the latest developments to ensure you sell at the optimal time.

Choose Engel & Völkers for unparalleled expertise and personalized assistance throughout your property selling journey, ensuring a seamless experience and optimal results.