Dubai home renovations: enough to drive a man to drink

Real estate may be peaking if the work in my apartment block is anything to go by

December 6, 2024, 3:02 PM

Dubai home renovations — Dubai Marina: real estate prices may be peaking in the emirate if home renovations in one tower in this district are anything to go by

I write these words in what I laughably call my “home office” (desk and laptop in spare bedroom) with a cacophony of growling, rumbling, occasionally ear-splitting drilling and hammering all around me.

The renovators are at work in my apartment block.

It has been like this for about the past six months, when it seemed everybody in my tower – a nice 24-storey building in Marina – decided it was time to gut the whole place and install a brand new kitchen or bathroom, rip out a ceiling, knock down a dividing wall, or lay a new parquet floor.

There are about 100 apartments in the building. But the noise from renovation reverberates around the entire block. If only 5 percent of owners/tenants decide on a makeover at the same time, it makes life hell for the rest of us.

The building managers – Emaar Community – do what they can to alleviate the problem. All renovation work needs a permit, and noisy work – like drilling and hammering – can only take place within certain times of the day.

But those, of course, are exactly the times I want to write or schedule Zoom calls.

I sometimes head up to the Dubai International Financial District, where, despite the distractions, I know I can hunker down in Café Bateel or the Capital Club with a laptop to escape the domestic din.

At home, the noise seems to have reached a crescendo in the past month. There must be work going on simultaneously in at least 10 apartments. Or so it sounds anyway.

From this I deduce that the Dubai real estate market is peaking. Here is the logic.

Since the current frenzy in the real estate market began after February 2022 (when Russia invaded Ukraine) house prices have been soaring. Transactions – according to figures from the Dubai Land Department – have hit all-time highs.

Just take a look at the residential sales price index the department produces. Once the post-financial crisis took hold in 2014, it slogged through the low foothills for a while, then slumped into the valleys of the pandemic, but has now recovered to hit Himalayan heights.

The current year will probably be the third in a row of at least double-digit price increases in residential property. It will be 20 percent plus in some areas (like Dubai Marina).

Property experts (everyone at every dinner party anywhere in Dubai) tell me that the burst of post-Ukraine activity was essentially a period of intense flipping, as buyers realised they could make a quick profit from selling within a few months of purchase. That period has ended, and now owners are either settling down to live in their new homes, or making them fit to yield big rents.

Hence the drilling and hammering.

I expect the noise to abate early next year as house prices begin to plateau and transactions recede. Where it goes from there depends on how fast new supply comes, and how much the rest of the world wants to continue availing itself of Dubai’s “safe haven” status.

But at least I expect to get some peace and quiet.

Cheers to the crucial F&B sector

I must express my deep appreciation to the Dubai authorities for the past two years when there has been no municipality tax on alcohol sales in the emirate. Not that I noticed very much.

According to a masterful analysis on Gulf Business, the suspension of the 30 percent levy at the end of 2022 “resulted in significant savings for Dubai’s restaurants, bars and hotels.”

But “this discount wasn’t directly passed on to customers in restaurants and bars, because these establishments set their prices based on various factors, including labour costs, rent and operational fees, not solely on the purchase price of alcohol,” it added.

That’s why I didn’t notice. Instead of paying tax to Dubai towards its admirable economic and infrastructure investment strategy, I was subsidising the operational costs of food and beverage (F&B) businesses here.

I’m just glad to have played my part in the profitable evolution of this vital sector of the emirate’s economy. If my contribution has helped attract even one more high-rolling tourist or expat to Dubai, I’m a happy man.

But I’m looking forward to resuming my direct investment into Dubai Inc in January, when I have a funny feeling that I will also be asked to continue subsidising F&B companies.

Frank Kane is Editor-at-Large of AGBI and an award-winning business journalist. He acts as a consultant to the Ministry of Energy of Saudi Arabia