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You may have noticed, whilst searching through various property portals and publications, the significant range in asking prices for similar units, so I am sure this has created a degree of confusion among buyers right now.
What is the market price? And are prices going to take a tumble, or are they still on the up? What is going to happen to the prices over the next few months is difficult to confirm 100 per cent, but many believe they really need to level off.
The fact is that property prices in Dubai topped the world rankings from January to March for the fourth consecutive quarter, soaring 27.7 per cent from a year ago.
Such growth, however, is not at all sustainable, and these figures, together with a statement released by the UAE Central Bank, comprise a warning to us all.
The UAE Central Bank said, “Current average rental yields in Dubai and Abu Dhabi are approximately 70 and 130 basis points below historical averages, which may indicate growing imbalances and overheating in the real estate market.” They also added that, “Monitoring developments in the UAE real estate markets and the banks’ exposure to it remains a core financial stability priority.” This is surely a warning that should not be ignored.
Real estate agents play an important role in bringing property to the market. It is imperative that they have intimate knowledge of their product and area to be able to confidently educate and advise sellers on correct and realistic price points.
Dubai property offerings are becoming more mature and sophisticated. Many owners have made significant “upgrades” which may or may not add value. Inexperienced agents with poor market/area knowledge sometimes create the fluctuations in asking prices online by not managing their sellers’ expectations correctly, and they often end up placing properties out of reach to end-users. This, then, leads to them losing out on the very core of an agent’s role, that is, bringing sellers and buyers together.
A professional agent will, of course, conduct research to stay updated with every new listing and to be as accurate as possible by relying on sold prices of similar units combined with current demand, and a thorough onsite evaluation of specific properties’ unique selling points.
It is our job, as agents, to help sellers understand the true value of their property, and we also know that a correctly priced property will sell. It is the motivated than allow their properties to sit on the market for months and months. And it is the professional agent who will confidently advise the client that the market is not at the level of the asking price.
The market has been through an adjustment period in the past few months. With summer vacation upon us and Ramadan just around the corner, this is a good time to look seriously at the option of shifting from rental to ownership.
Banks are again keen to offer very reasonable mortgages to both residents and non-residents. With salary requirements as low as Dh10,000 per month, property mortgages have become more accessible for an increasing number of residents.
On the backside of Ramadan and the vacation period, I believe the market will again become buoyant and ready to move forward both in the residential and commercial sectors. The upcoming Cityscape Global in Dubai to be held towards the end of September will further fuel positive events. So the question you should ask now is if this is the right time to get your foot on the real estate ladder.
Source: Safura Abas, General Manager, Aston Pearl Real Estate