Why invest in a luxury beach front property? I could answer this in just three words: location, location, location. While many of us look into factors such as architecture, design and features, what property investment always boils down to in my experience is purely the location. And for a location that will remain perennially desirable – think retain and/or increase its value – what could be better than a beach front property?
How many times have you visited an oceanside resort and considered buying? It’s probably something we’ve all considered at one time or another, whether in Jumeirah or Miami. Beachfront properties in a well-established areas certainly rank high on the scale of profitable, safe long-term investments. In a world of myriad investment possibilities, property is widely considered a safe bet – but a property in a rare or limited location, more so.
A beach front is just that – there will only ever be x amount of properties, and a limited linear strip to build upon. And scarcity creates demand, as we all know too well. Most well-established beach communities have strict development and planning rules too, so new build opportunities are few and far between. All this adds up to a solid investment. Add in the opportunity for near year-round rentals for tourists or locals, and you are pretty much guaranteed solid returns.
There are numerous, well-documented benefits to living beside the ocean, further increasing the opportunities for rental income.
‘Numerous’ benefits to living in a luxury beach front property
According to real estate website luxuryproperty.com, real estate values in coastal areas have increased faster than the overall Dubai property market. Oceanside and waterfront properties account for just 17 percent of all supply. And where demand outstrips supply, we know prices are inflated. It might cost more than you budgeted for to gain that exclusive, luxury beach side property, but it’s a safe bet that the property will increase in value.
When looking for a beachside property, you might want to consider the facilities of the surrounding area – such as the local retail, dining, sports and leisure offerings. The property itself might need a higher level of maintenance, given coastal weather conditions – and higher maintenance costs should be considered. A well-maintained property, after all, maintains better re-sale value.
To further shore up your investment – pun intended – carefully consider the property’s facilities, fixtures and fittings. Will it need upgrading to achieve above average market rent, if you are thinking of renting?
Does it have ample parking, a pool, and enough light and air to fully embrace coastal living? You might look specifically for a property with generous space surrounding the property, especially if you are looking for tourist rentals. Of course, a swimming pool, hot tub and outdoor sports facilities like a tennis or basketball court can help command decent rents and a higher resale value.
A recent report suggests that in Dubai, average mainland property value has increased by some 33.9 percent between Q1 2020 and Q4 2022. Impressive figures, until you consider that the same report reveals average seafront property value in the emirate has increased by an incredible 65 percent in the same two-year period.
Bear in mind that scarcity and sea views have combined in Dubai, with average seafront homes valued at more than double that of average mainland properties – commanding a massive 106 percent premium, according to the same report.
The report reveals that in Q4 2022 prices were in excess of AED3,000 per square foot for seafront properties in Dubai. Developers are keen to meet the ever-growing demand. In 2022, some 4,668 beach and waterfront properties were handed over, according to data from luxuryproperty.com. It is expected that 5,829 beach/waterfront units will be handed over in 2023, a 24.87 percent increase from 2022, but demand will still outstrip supply for the foreseeable future.
Given all these facts, do you still need to ask why it’s a good idea to invest in a luxury beachfront property?