Holiday homes in high demand
According to the industry executives, Holiday Homes have gained a growing popularity among small investors and private developers. This is because these properties offer higher returns in comparison to other properties in Dubai.
In Dubai, the average rental return is about 7-8 percent. However, Holiday Homes suggest up to 25 percent more rent to the investors. This is the reason why they are among the most desirable properties to investors. These properties can be used for short-term rental. Also, they are available for sale.
Among different unit types, studios are more appealing among investors because tourists are more interested in studios.
It is interesting to note that the market for Holiday Homes forms two percent of Dubai’s total households. This proportion is highest among all other global hub cities. In the market of Holiday Homes, there are 10,766 active listings out of 20,395 properties that have been registered on Airbnb since 2010.
The total number of listings has showed a rise in the last couple of years. In fact, active properties recorded a growth rate of 161 percent since 2016. Homes or apartments accounted for 61 percent of total active listings, while rooms made 31 percent of it. Shared rooms were the remaining eight percent.
Developers have put their full focus on studio units, and still there is a high demand for studios. The question here is why developers don’t build studio units only. This is because in Dubai, there should be one parking for each unit. So, when developers build a 400sqm studio, they are building non-salable area as well as salable area. This is the reason why the developers are more interested in studios.
Also, the operators of Holiday Home business are moving towards B area. This is because they can suggest their clients a price as low as Dh999 weekly or Dh140-150 per night.
Pranav Mehta, country head for Oyo UAE, thinks of Dubai Holiday Homes as a unique opportunity for owners of Holiday Homes and operators. The reason is that about 20 million people are expected to visit Dubai during Expo 2020.
In other words, the investors with multiple properties are more interested in Holiday Homes, but not long-term renting. The reason of such tendency is the tourist-friendly nature of Dubai.
According to Firas Al Msaddi, CEO of Fam Properties, the Holiday Homes have also other benefits for tourists. For instance, these properties are situated within walking distance to Dubai’s major landmarks such as the Burj Khalifa and Dubai Mall. Besides, they are close to Dubai’s pristine beaches.
For developers, now is the best time in terms of the status of Holiday Home market. The reason is that they can furnish their properties, stage them and use them as a source of income.
Therefore, according to the above, Holiday Home brings enormous benefits not only for the investors, but also for the residents. Holiday Home gives the investors 25 percent more returns. In addition, flexibility to rent, flexibility to sell, better occupancy and having a well-maintained unit are other benefits.