How hard is it to sell luxury property in Dubai?
What does it take to sell a Dh20-million signature residence on the Palm Jumeirah or an equally super-prime property at Jumeirah Golf Estates? Sound knowledge of the market, a can-do attitude or plain luck? Andrew Cummings, co-founder and managing director of Luxuryproperty.com, says selling super luxury in Dubai to investors around the world is all about the relationships he builds with his clients. Cummings has had a good, if not great, 2018 where he has sealed the deal for a signature penthouse at The Palm Jumeirah and a Golf Course Hillside villa at the Jumeirah Golf Estates, each more than Dh20 million.
“Selling luxury is very different from selling mass market realty. For us, it’s the professional advisory that helps clinch a deal. Our clients hire us for our advice, just as they would do with their lawyers or accountants,” he says.
Cummings’ high-net-worth clients who recently purchased the two luxury properties in Dubai are from the UK and Monaco, with assets around the world. For such clients, when he sells “brand Dubai” he goes an extra step to woo them by understanding their requirements in full detail.
“We have to first observe and understand their lifestyles carefully. For some of my clients, the investment in Dubai could be for their first, second or their fifth home. We have to advise them correctly, and not just about their property. It could be advising them on schools, the lifestyle here, how to hire staff or set up a company, where to go for their interior design and furniture needs. We act as a lifestyle concierge and not just a broker,” explains Cummings.
The family from Monaco that bought the Jumeirah Golf Estates Hillside Villa (pictured above) was contemplating a possible move to Dubai for three to four months, according to Cummings. Portugal was another option for them, but they wanted to come and see Dubai “as the wife wasn’t really convinced about the place”. Cummings arranged their visit.
“So they came for a holiday and I arranged an Airbnb for them and advised on school options and recreation in the emirate,” he says. “At the end of the week, they bought the villa. People who invest in Dubai’s luxury market are generally clued in about what’s happening internationally, says Cummings. “That requires us to know the local market well,” he says. “It also means we have to be super responsive, always reachable on phone, email, on WhatsApp, even on Instagram or YouTube. International clients track us digitally as well, so being active on social media platforms is also very important.”
Zorro Ghura, a senior global property consultant at Gulf Sotheby’s International Realty, says most investors for the luxury sector have portfolios around the world. “So it helps to know your market and advise the client accordingly,” says Ghura. “You need to show them what’s new in Dubai, for example, in MBR City District One, Dubai Hills, The Palm Jumeirah or the Jumeirah Golf Estates. Selling super luxury is more about the sales strategy, it’s about the trust factor.”
Ghura, who has sold property in the UK before, sealed a deal of Dh28 million in District One in 2017.
Most of his clients, he feels, are aware of what’s happening in Dubai. “They know government plans, infrastructure spending, and the value of investing in Dubai, population growth, safety and tourism potential quite well,” says Ghura. “What they often don’t know is the new development that’s coming into the market, so here our market knowledge comes handy. For example, The Bvlgari Resort & Residences in Jumeirah Bay by Meraas has been very popular with East Europeans, particularly the Russians.”
Having sold signature villas worth Dh37 million and Dh24.5 million on the Palm in 2016 and 2017 respectively, Yasin Valimulla, associate partner with Keller Williams, says the trick to clinch a deal is to be a part of your clients’ lifestyle to understand them well. “I try to find out in detail what they are looking for, and at that level, it is important for investors to open up and let you into their personal world,” says Valimulla, who specialises in properties on the Palm.
Selling properties on the luxury island, Valimulla feels, has become more competitive as there are many options in the market. “In 2009 and 2010 you could sell almost 15 villas in a year in the price bracket of Dh15 to Dh30 million. But in 2017 and 2018, that number has gone down to five in a year, in the price bracket of Dh8 to Dh12 million. The buyer has more choices now in Dubai.”
Patience is key
So how long does it take to close a luxury deal? Three months to over a year, says Cummings. “It takes a lot of patience and for such high-net-worth individuals we are just a small thread in their complex life tapestry. They have several homes, hobbies and business interests that sometimes it takes weeks, if not months, to get a conversation going.”
For the past six months Cummings says he has been communicating with a client in France through Google Translate about a Dh24-million penthouse on the Palm. “Now he wants me to physically walk through it as I air it live for him to see every bit of the property,” he says. Cummings is also in touch with a client from Germany since February last year about purchasing a Dubai property valued between Dh50 million and Dh80 million. “[The client] is finally due to arrive in Dubai for the first time this month. Patience is the key as it can really take a while for things to get going.”
But somewhere down the line there is also the risk of fake leads, and sometimes after talking to a client for months, brokers like Cummings can feel shortchanged. “We do get the due diligence done,” he says. “Asking for passport copies is the first thing we do, and we also ask for proof of funds through bank statements, but it’s still a tricky issue and we could be chasing a lead for months till we actually know that it was rubbish.”
Ghura also cautions about illegal fund movements. “While we are careful to protect investor interests, we also have to be careful that we are not cheated in the end. We make all background checks and find out if the buyer has the capacity to buy and the funds are all legal.”
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