Affordable developments have shifted market realities and properties are selling above their listed prices, says Allsopp & Allsopp CEO
Property prices in Dubai could be on the upswing, as affordable options gain traction, according to one realtor.
Over the last quarter, property agents Allsopp & Allsopp recorded substantial sales growth, with 83 per cent of all properties sold for under Dh4 million. Coinciding with increased sales in the sub-Dh4 million segment, the agent has registered more buyers than at any other point in its eight-year history. Last week saw 136 new buyers register and the week before saw 181 new buyers. The same period last year registered between 80-90 new buyers.
“On the ground we’re seeing a definite shift in the market,” Allsopp & Allsopp CEO, Lewis Allsopp, said in a statement. “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.
“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 Dh4 million segment,” he added.
“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.”
Allsopp says average purchase price trends have changed following implementation of the mortgage cap a couple of years ago. Under the cap, properties above Dh5 million require a higher deposit of 35 per cent.
“Following implementation of the lending caps, the property market has evolved so more buyers are opting to mortgage their properties and with the cap we have found the appetite to buy properties above that price band deteriorate, which has resulted in the higher end of the market suffering in terms of pricing.”
Allsopp & Allsopp’s figures show only 13 per cent of sales over the last quarter were above Dh5 million.
“While the figures don’t read well for owners of properties over Dh5 million in terms of buyer activity, should the mortgage cap regulations be eased, with buyers being allowed to put less of a deposit down (currently 65 per cent loan to value), we would see more traction.”
Highlighting the strength of the sub-Dh4 million category, Allsopp points to Jumeirah Golf Estates where the latest phase of the development sold out over one weekend, to the value of Dh30 million.
“These aren’t investors buying off plan, these are regular people looking for family homes to live in and as a developments come close to handover the stock increases and we’re seeing huge demand from the retail market looking to purchase family homes,” he said. “One major development in Jumeirah Village Triangle has sold the majority of its properties in the last two months as it comes close to handover. Another, in Sports City, has been on the market for years but as it nears handover it’s getting hot again.
“Essentially, if you have a property close to handover, people are interested and there’s a definite market out there of ready and willing buyers.”
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