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Dubai: There is some respite for those looking to acquire property in Dubai now — the surge in asking values during November, December and January led by the Expo 2020 win announcement looks to have subsided. That Dubai/UAE cannot afford to have its property market in constant overheated mode is being rammed home from several quarters, most notably by the International Monetary Fund.
But anyone looking to buy now — from an end-user perspective - would still need to have immediate access to sizeable funds. More so if they are looking at villas. “The need to save up larger deposits will mean the transition from the rental market to owner occupation will take longer”, states a new Cluttons report on the first-quarter trends in Dubai’s residential market. “As a result, we anticipate capital value growth rates for Dubai’s villa sub-markets to cool further in the near term, which may offer some respite to households aspiring to purchase.
“Values are however not expected to record any declines”.
According to Steve Morgan, Middle East head at Cluttons, “The increased size of deposits means that options available to mortgaged buyers is likely to be restricted to the lower end of the property spectrum and has already had an impact on transaction volumes. We expect the transition from rented property to owner occupation to take longer as deposits are amassed, which is translating into a slowdown in the number of deals being recorded.”
There are also some who believe there have been marginal dips in asking values on existing properties from the January peaks. According to Chandrakant Whabi, CEO at the estate agent Acrohouse Properties, “A 5-10 per cent softening does seem to be there across the board in the city’s freehold locations. Between January 15-30, the values being demanded had reached a level where it led to very little sales transactions being completed.
“Also, by then, most of the buying activity spike released by the Expo win as well as those trying to acquire properties before the mortgage cap came into effect was over. In the last two or three months, residential prices have been steady while those in commercial make gains. For market dynamics to have sustenance, there was a need for price growth to slow down.”
Source: Manoj Nair, Associate Editor, gulfnews.com