Real estate agent claims ‘definite shift’ in Dubai property market

Real estate agent claims 'definite shift' in Dubai property market

The flurry of contradictory reports about the health of the Dubai property sector is continuing, with one local realtor claiming that there has been a “definite shift” in the market.

Lewis Allsopp, the chief executive of Allsopp & Allsopp said that the firm had recorded an 11 percent increase in sales over the last quarter, with 83 percent of these coming in the sub-AED4 million ($1.1 million) bracket.

The company said that it had also registered more buyers recently than at any other point in its eight-year history, and that recent patterns were likely to lead to increase prices.

“Demand from buyers is already putting prices up. Every property we’ve sold in the last two months has had multiple offers on it and ended up selling above the listed price,” Allsopp said, in a press statement, although the company declined to confirm to Arabian Business how many properties it had actually sold during that period.

“This is the first time in the last two years owners are increasing the asking price and actually receiving it. We’re starting to see bidding wars with multiple buyers putting offers in – and it’s all in the under AED4 million segment.

“We’re actually registering more buyers than properties so we’re starting to see a shortage of supply, which combined with buyer demand and sellers putting prices up, all points to a shift in the market.”

The CEO also said that the easing of mortgage caps, which are higher for properties valued at over AED5 million, would support the high-end segment of the real estate market.

The bullish assessment from the realtor comes as other observers argue that the market may have further to fall, or that it will take much longer for values to increase.

In June, Phidar Advisory warned that the fall in property values and rents is set to continue over the summer.

Phidar said that although less than 20,000 residential units had been completed over the past year, giving some stability to the market, anecdotal evidence pointing to a pattern of redundancies and slowed job growth – as a result of the impact of the oil price and tighter regional liquidity – might be beginning to take their toll.

“Rent declines usually turn into sale price declines, especially considering the prevalence of yield-sensitive investors,” the research added.

“So, the sale price decline will likely accelerate in the coming months.”

Phidar also said that the oversupply in Dubai’s residential market was expected to remain until 2019.

In further research published on Monday, property consultant JLL said that the impact of the UK’s decision to leave the European Union could adversely affect the Dubai market. The agency said it saw recovery in Dubai real estate in “early 2017”.

Reidin research shows that Dubai apartment sales fell by 5 percent in the second quarter year-on-year, while villa sales dropped by 6 percent.

Apartment rents fell by 3 percent, while villa rents declined by 6 percent.

Post Comment