What is a distressed deal in Dubai? The three-price rule
A distressed deal in Dubai is a unit that passes two tests: it is priced below the original developer price, and its asking price is at or below the three lowest listings for the same building. Matching those three is a decent deal; going below them is a great one.
How do you define a distressed deal in Dubai?
There is no single official definition. Some people mean any discount off the original price, others mean any discount to the market. The rule in this clip combines both into two checks applied one after the other.
The first check is the discount off OP, the original price the developer sold the unit at. The second is how the asking price compares with the cheapest units currently on sale in the same building.
What is the three-price rule?
Open a property portal such as Property Finder and pick the building. Say 100 apartments in it are listed for sale. Look only at the three lowest asking prices among them.
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A unit offered at the level of those three prices is a decent deal. A unit offered even cheaper than all three is a great deal. That comparison is the main benchmark for calling something distressed.
What does that look like in numbers?
If comparable apartments in a building average USD 1 million (about AED 3.67m) and the cheapest listings sit at USD 900,000 (about AED 3.31m), a distressed unit is one offered at USD 900,000 or less.
Ideally the price is below the three lowest listings, but it depends on the building. In some buildings even matching the lowest three is already a strong result.
Why is a discount off the original price not enough on its own?
A unit can be sold below what the first buyer paid and still cost more than similar apartments listed in the same tower today. The discount looks large on paper, but the buyer gains nothing against the market.
That is why the second test exists. Comparing the price with live listings in the same building shows whether the discount is real or only relative to an old launch price.
How do you run the check yourself?
Find the building on a portal, sort the units for sale by price and note the three lowest asking prices for a comparable layout. Then compare the offer you have been sent with those three figures.
Asking prices are not transaction prices, so it also helps to look at recent sales in the building according to DLD data before you commit.
Frequently asked
What is a distressed property in Dubai?
A unit sold below its original developer price and at or below the three cheapest listings in the same building, usually because the owner needs to sell quickly.
Is any discount off the original price a distressed deal?
No. The unit must also be priced at or below the three lowest listings for the same building, otherwise the discount is not real against the market.
Where do you check the three lowest prices?
On a property portal such as Property Finder: pick the building, sort the units for sale by price and compare comparable layouts.
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