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Real estate giants forecast that the Dubai realty sector would maintain its growing maturity momentum this year. The reason is, the sector is enjoying market stability, which is characterized by patient and confident end-users, long-term investors and buoyant returns. The regulatory reforms in the last few years are also a seismic factor in controlling and attracting interest from investors in emerging and heated markets.
Apart from end-users, one characteristic of a mature realty market is the presence of buy-to-let landlords. According to Sam Wani, GM of Independent Finance, ''90% of transactions will be mortgage-based in a mature market. Property appreciation will mostly be in single digits. Once a property is bought, it will be held for years before it will be sold off.'' Thus, it is advisable to buy a property as it gains value over time, but a buyer requires a plan to hold the property for the long term.
The strategy to sustain maturity in the realty sector is to create a sustainable market to ensure that supply meets demand. ''This will require making projections for population growth and ensuring that sufficient projects are launched to meet future demands. Dubai is slowly heading towards this set-up,'' says Wani.
The maturity of a market affects sellers and buyers differently. Wani explains that a mature market is bad news for flippers and fly-by-night operators. Cash sellers will have little incentive to invest in property since appreciation is limited. However, this setting is ideal for end-users since they will have more choice and bargaining power. Thus, sellers will have to be realistic with their selling price. Also, there would be less room for maneuvering a deal with a buyer.
For investors, location is the key to any property. Even if the property is well maintained, Wani asserts, it is only attractive if it has amenities along with accessibility, or it loses its demand value. Remember, a property close to schools, markets and shops, and with easy access to public transport gains more value.
• Dubai realty expected to keep its growing maturity momentum this year
• Its regulatory reforms are one of the factors that attracts investor interest
• Mature market ideal for end-users as they will have more bargaining power
Source: Arva Shikari, Special to Properties
The writer is a freelancer