Where do we stand in the Dubai property market?

Dubai Property MarketImage Credit: Supplied

If we calmly stand still and observe the Dubai property market, so far, we will find that the rectification of prices and the market stabilization were inevitable because of the various factors that had risen at the start of this year, as follows:

• The winning of the Expo 2020 hosting bid gave rise to stable property prices which rose to a level where some buyers reached negative cash flows towards prompt purchases

• Following the high prices, the latest mortgage cap became a hindrance for end-users to purchase properties as the loan to value (LTV) was low and the prices high, making it difficult for them to buy the property of their choice

• Buyers were initially taken aback by the increase in transfer fee and skeptical about making purchases due to the high cost, but the fee was gradually integrated into the buyers’ mindset and is no longer an issue

• The wave of off-plan property launches this year has made investors and end-users alike invest directly with the developers, leading to ready properties starving for buyers, which, again, has positively stabilized the market

A practical solution for the present fickle market can be made tentatively if the sellers meet the buyers halfway towards executing realistic property transactions which will cause an interim correction, but will be a gradual stabilization from the present high prices. This way, the investors will get a genuine return on investment (ROI) on their purchases and the end-users, who are struggling to find a point where their LTV and the selling price match so that their equated monthly installment (EMI) is within reach, will also find their way back to the property market.

Overall, stable investors and future end-users are seen to concentrate on off-plan properties, thus keeping this particular sector afloat; at the same time, the ROI investors and immediate end-users will be interested in ready properties, making the overall market stable and healthy in the years to come.

Handy Hints
• Expo 2020 hosting bid win gave rise to more stable prices in Dubai property market
• Mortgage cap a hindrance for end-users to purchase properties they want
• There is a trend of investors dealing directly with off-plan property developers

Source: Sheetal Sagar Shroff, Special to Properties
The writer is Marketing Manager, Legacy Real Estate


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