Is Dubai’s realty sector creating a dramatic shift to a seller’s market in spite of the lingering headwinds of the pandemic-caused economic slowdown?
Property pundits provided that they are seeing such a transition with the ratio of buyer queries far outstripping the new supply.
“Ready properties of high-quality finishes that are kept well are in high demand and with so much competition from buyers at the moment, we are seeing undersupply issues leading to property price increases,” property consultancy company Allsopp & Allsopp says.
Dubai is in between of a seller’s market with Allsopp & Allsopp’s current ratio of buyer questions to new property listings at 8:1, as per the real estate brokerage company.
“Buyers don’t have a lot of options in the market and urgency is being shown as prices are on the increase and have been doing so for the last few months. They are signing on the dotted line a lot quicker than they previously would have through fear of missing out on a property they like,” an analyst at Allsopp & Allsopp said in a report.
“If you go back a year-and-a-half, we were trying to convince buyers to look at properties as Dubai was in a buyers’ market. They weren’t keen to view as there was so much supply and with the supply comes less urgency. If a property they like was sold, they would simply find another similar property. However, we are now seeing multiple buyers for one property as there is little supply, therefore, creating urgency, and at times, driving the price upwards by means of outbidding each other,” said Lewis Allsopp, CEO of Allsopp & Allsopp.
The company asserts that it has a waiting list of purchasers for specific properties – implying that those properties sought after are selling before they arrive at property entrances, for example, houza.com, a recently dispatched broker-possessed property portal.
“What we are seeing is that buyers are contacting agencies to find out what is becoming available. They are not waiting for properties to go live online. This is an encouraging sign for the Dubai property market and shows its maturity despite a global pandemic,” he said.
The real estate brokerage announced record-breaking income generated for January 2021 in comparison to any other month in the company’s 13-year past. The e loan-to-value (LTV)ratio and low-interest rates are a common denominator when we talk about the buyers having the ability to step onto the property ladder.
“First-time buyers make up 74 percent of our business at the moment due to the government stimulus package increasing the LTV and lowering interest rates – it has never been a more affordable time to buy,” says Allsopp.
For example being, in 2019 a property could be costing Dh2.5 Million with a down payment of 33 percent at Dh800,000, but in the second half of 2020 and stepping into 2021, the same property could be bought for Dh1.9 million with a down payment of 26 percent at Dh400,000. In addition to the fact that it is much less expensive, yet customers are likewise paying less in upfront expenses, he clarified.
He said end-user buyers would consider paying more if they find a property that they like. “Some are holding off on buying cheaper units and placing themselves on waiting lists hoping for the right property to become available and are willing to stretch their budget to the max.”
The brokerage provided that the average cost deals cost has increased in a number of areas over the city.
For the Springs, Type 2M villa, the sale cost increased from Dh1.82 million in April 2020 to Dh1.975 million in September 2020 to dh2.475 million in January 2021. For victory Heights, Type B villa, the deal costs in May 2020 were Dh4.1 million in comparison to Dh4.8 million in August 2020 and Dh5.1 in December 2020.