New beginnings, new appetite

How can buyers and sellers benefit from a market that’s showing maturity?Clementine Malim

According to the Dubai Land Department (DLD), the total amount of real estate transactions in Dubai were down 8 per cent from the previous year. At first glance this would suggest signs of a slowing property market, but in reality it is maturing and moving away from its temperamental past.

Dubai’s property market saw excellent growth in 2013. House prices were rising, banks were lending, the market was strong and transactions were in abundance. Prices were rising quarteron-quarter and in essence these increases weren’t sustainable in a stable and mature market.

Cooling measures

The DLD initiated the cooling period with the October 2013 announcement of an increase in transfer fee from 2 per cent to 4 per cent — making it more expensive for flippers to make a quick buck. This was followed shortly by the new mortgage cap implemented by the UAE Central Bank to further curb rising property prices. This affected the amount buyers could borrow: 75 per cent on property worth less than Dh5 million and 65 per cent on property valued more than Dh5 million.

Including the 4 per cent DLD transfer fee and the agent’s 2 per cent fee, buyers would have to front 31- 41 per cent of the property’s value in cash. That’s a huge amount of money for buyers to have available. The fallout from these factors resulted in fewer transactions.

From an agent’s perspective, the past 12-15 months have felt slow, with vendor prices still high and buyers unable to afford to purchase at this level.

There has also been an air of uncertainty in regard to what the market was going to do, which has certainly had an effect on people’s confidence in buying property. Recently, however, this seems to have changed.

In a recent report global property consultancy JLL stated, “Buyers continue to suffer from the introduction of mortgage caps.” This is true to some extent. It might have closed a few doors to potential investors, but it has opened the door to other potential buyers. The price correction has levelled out the market, and the past two months have seen a rise in activity. A slight drop in investor appetite isn’t to say the end-user market isn’t active. The prices are finally becoming more realistic and it’s making way for homebuyers to get their foot in the door.

The motivation to transact is now there at a price suitable for both parties, allowing agents to bridge the gap between buyer and seller and resulting in more sales.

Bringing in balance

We are beginning to see a better balance of supply and demand. With more than 19,000 new homes expected to be handed over this year and an impressive 27 new projects recently launched, Dubai’s real estate market shows no signs of slowing down. With a more balanced equation, it means vendors have to be more realistic with their selling prices. A positive sign that the market we are now in is sustainable, realistic and here to stay.

This all sounds reassuring and encouraging — but how can it really benefit you? Firstly and most simply, it’s cheaper to buy now than it has been over the past two years. But for me, the traditional reasons for buying are what I believe motivates most of my clients. Dubai continues to be a thriving business hub and wonderful home for many expatriates. Many come for five years or more and logistically it can work out cheaper to buy than to rent.

People see it as an opportunity to own a home here, and this is the reason that resonates most with me. As we know, rents are high and landlords can be prone to selling the property just as we tenants are settling in. Buying gives us the security and freedom to decorate as we wish, adding kitchens and bathrooms and really making a home for ourselves.

For those who are here for a short time or for the long run and are considering buying a home, a mortgage is often needed. The UAE’s Central Bank Q2 Credit Sentiment Survey showed that banks’ and financial institutions’ willingness to lend had increased healthily in the three months to June last year. Banks are competitive, and rates are good. It can be beneficial to speak to an independent mortgage adviser and there are a few fantastic companies in Dubai offering this service. With their help you can compare more than 30 banks and, in turn, usually find the best rates.

DLD data

The Dubai Land Department released data saying there was no growth between October and December last year. As we move into the new year, what does that mean for buyers and sellers in Dubai?


Finance: Work out your budget before starting the journey. We always recommend working with an independent mortgage adviser, as they can come up with innovative ways to make your money go further.

Imagination: Upgrades are just temporary; look beyond decoration. Do you like the house, the plot or the area?

Agent: Find a good one who is attentive to your needs, fully understands your brief and knows the buying process inside out.

Don’t hesitate: We are entering a buyer’s market and good properties that are priced right are still selling fast. So if you like a property, make it known to your agent and don’t hesitate to make an offer.

Location: The road system in Dubai is constantly developing, making communities that once seemed isolated now easily accessible. Don’t be afraid to look further afield, where you could get more square feet for your money.


Landlords: With more freehold stock coming online, landlords are a lot more flexible than previous years. Whether it’s price, number of cheques or simply having the place fixed up, don’t be afraid to ask.

Be ready: The market is fast-paced; be prepared to make an offer on a property if you like it. Before you know it, it might be gone.

Renewvs move: The cost of moving in Dubai is high, and with charges from the likes of Ejari, Dewa, du, and Etisalat, it might be cheaper to stay put. Consider this before making a decision.

Renewal: Always have an open dialogue with your landlord when it comes to renewing your contract. If you’re worried about what you should be paying, check out the online rental calculator — it will let you know if your rent is what it should be.

Movers: If you do have to move, unlike the Dubai of old there are lots of fantastic companies that  an help. Shop around for the best deal — some even throw in a free pizza!


With sellers, it all boils down to exposure. With  more properties on the marketit’s really important that yours stands out.

Agent: Work with those who truly understand the current market and can demonstrate they can get
the job done. Make sure you meet them face-to-face and you’re comfortable they can guide you through this tough market. Lastly, choose an agent with a good online presence.

Photographs: Gone are the days when an agent can turn up and take pictures with their phones. The better ones offer a professional photography service. It is so important that your property stands out before potential buyers have even walked through the door.

Tidy: It might sound silly, but make sure your home is neat before a viewing. First impressions go a long way — sometimes even doing a few minor upgrades can make a big difference.

Educate yourself: Unlike many other markets, it’s really tough to know what true market value is. Simply going online and checking out the competition in most cases gives inaccurate values. When inviting agents to value your home, make sure they can present comparable properties they have recently sold to back up their market assessment. The last thing you want is to enter the market too low.

Listen: Good agents will provide you the best information for your unique situation. They live and breathe the market, and can guide you to a successful transaction. Selling a home can be daunting and whether it’s putting up a “for sale” sign, redecorating or reducing the price, any suggestion has your best interests.

Source: Clementine Malim, Special to Property Weekly

The writer is a client manager with Ascot & Co. She relocated to Dubai from London in 2012  to help set up the company, a boutique real estate agency specialised in luxury properties.


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