Appreciation is the word Dubai brokers throw at every buyer who asks “but will it go up?” — and it’s the least reliable word in the sales pitch.
Appreciation is the increase in a property’s market value over time, driven by area demand, new infrastructure, developer reputation, macro rates, and a dozen softer factors like whether a metro line or a school got announced in the cluster. It is not a straight line, and it is not guaranteed. Dubai delivered very strong appreciation through 2022-2024 after a decade of roughly flat pricing; a buyer who entered in 2014 and sold in 2020 would have watched their unit lose value in real terms.
The number that actually lands in your pocket is appreciation after costs. Sticker went from AED 1.2M to AED 1.5M looks like 25%. Subtract 4% entry DLD, 2% agent, 2% exit agent, service charges across the holding period, any financing cost on the margin — and the real return on cash-in can drop to 14-16% over the same window.
A client last month was ready to sell at “35% appreciation.” Once we modelled the full cost stack across his three-year hold, the cash-on-cash was closer to 19%. Still good, but a different decision.
Model the net, not the headline.
Related: Capital Appreciation, Depreciation, ROI, Holding Cost.
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