Investors are increasingly confident about the Dubai property market and taking advantage of the low market prices.
Investors and homeowners seem to be increasingly keen to buy assets in Dubai's real estate market while prices are low, according to a survey of property buyers in the emirate.
Real estate company Allsopp & Allsopp's Q3 report shows a rise in mortgage buyers, cash buyers, secondary market sales and multiple cheque rental payments. An 18 percent increase in cash buyers in Q3 2019 compared to the same period last year shows that buyer sentiment is growing.
“More often than not, cash buyers are buying for investment purposes. This summer, we conducted a survey of buyers at random over the summer months to see what enticed them to purchase property. Forty-three percent of people asked [said it was] for investment purposes,” Lewis Allsopp, CEO of Allsopp & Allsopp, said.
Investors appear to be confident about the Dubai property market and are taking advantage of the low market prices. Allsopp and Allsopp has reported a 27 percent increase in mortgage buyers in the third quarter compared to the same period last year.
“Many investors are predicting the market prices are nearing the bottom of the curve and they are taking this opportunity to get the most out of their rental yield in the future, Allsopp said, adding "This interest is highly encouraging and shows the confidence there is in the Dubai property market.”
The average sales price of properties sold by Allsopp & Allsopp in Q3 of 2019 compared to Q3 of 2018 has decreased by only 1 percent.
The company reports a rise in secondary market sales of 36 percent and a decrease in off-plan sales by 67 percent.
While the rise in secondary market sales is highly encouraging, Allsopp said, the formation of the Higher Committee for Real Estate, which has been set up to achieve a balance between supply and demand could be the reason for the decline in off-plan sales.
Developers are focusing on the stock they already have, and we should see a slowdown in launches in the foreseeable future.
The brokerage firm has recorded a decrease in the average rental price of 10 percent in Q3 of 2019 compared to Q3 of 2018.
“The average rental price decrease could be down to more tenants taking the opportunity to move to differing areas or upgrading to larger properties. As tenants move, the property they have been renting for the last few years comes to the market at the correct market price. So, this isn’t to say that prices have decreased further in a year, but properties that were rented are now becoming available at the correct market price," Allsopp said.
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