Lewis Allsopp, CEO says “The increases that we are reporting for Q1 are hugely encouraging as the Coronavirus pandemic has swept its way through the city and the world over recent weeks causing disruption to the real estate market. We have remained supportive to all of our clients and have assisted buyers and tenants who have had a need to move because they have sold their house or their tenancy contract has expired. Business has certainly not continued as usual, the last week of March and the start of April in particular, but the figures we are reporting are proof that the property market in Dubai had a very strong start to the year, in my opinion, we will see this trend pick up again and continue as and when we are able to recover from the effects of the pandemic.”
The leading real estate agency has seen a rise in buyer registrations of 34% and an increase in sales transactions of 31% in Q1 2020 compared to Q1 of 2019. Allsopp & Allsopp achieved their best January and February on record with the most sales transactions in both months of the year for the company’s 12 years in operation.
Allsopp says “January 2020 saw buyer registration rise significantly and subsequently we saw the most sales transactions ever done in the months of January and February at the company. March itself was still strong, sitting in 7th place on the overall monthly standings since opening. I believe that attractive property prices play a significant role in buyer sentiment but I also believe that Dubai is becoming a home to many expats. I’ve said this for a few years now, Dubai is changing from a city to live and save, to a city to call home and build a career and family. We work predominantly with end-user buyers who are upgrading their properties to cater for their growing families and who are looking to buy their first home.”
Allsopp & Allsopp report that 62% of buyers, bought with a mortgage in Q1 of 2020, the same percentage of mortgage buyers as in Q1 2019, however Allsopp & Allsopp Mortgage Services report a 34% increase in mortgage transactions, indicating the increasingly prominent role they are playing in the mortgage industry.
Allsopp explains “Buyers are looking to take the advice of mortgage consultants before committing to taking out the largest loan of their life. Mortgage consultants do all the shopping around for buyers and can guarantee the best mortgage rates and packages available as well as open and honest advice.
The 0.5% cut in interest rates by the Central Bank off the back of the US cut is another encouragement to new buyers who were perhaps on the fence about buying a property to take action. First-time buyers saw their affordability increase with the increase in Loan to Value from 75% to 80% of the total property value as part of the government stimulus package this recent cut and with the cost of getting into a mortgage is less, the cost when in a mortgage is less and the cost to get out of a mortgage is less and the attractive property prices – now is the time to buy.
Allsopp & Allsopp are seeing more chain deals – homeowners buying to upgrade or downsize their property. These buyers will see their affordability increase slightly which could open up their options or give them a little more money to upgrade their new property.”
The multi-national real estate company reported an increase in tenant registration by 17% and an increase in lettings transactions by 16% with a 5% increase in tenants paying with more than 3 cheques. Interestingly, company paid lets accounted for 11% of all tenancy contracts and were second highest in Q1 to 28% of British tenants with 6% of Indian tenants in 3rd highest compared to the top 3 tenancy contracts in Q1 of 2019 signed by the tenants themselves from Britain, India and France.
Lewis Allsopp explains “It is no surprise that tenant registration and transaction levels have risen as we see the population rise quarter on quarter. Dubai’s population has risen by 154,056 people since March 31st of 2019 and as of the 31st of March 2020, the population now stands at 3,385,931. Dubai has so much to offer for expats and offers an almost unrivaled lifestyle.
The rise in tenancy contracts being paid by companies is hugely encouraging. The majority of these tenancy contracts were for commercial purposes, meaning businesses are setting up offices for a new company or expanding or upgrading their current work space. This is a great sign for Dubai’s economy as companies bring experts in from all over the world. This, in turn, is great news for Dubai’s property market – the more jobs and opportunities there are for expats, the more people will buy property and live in Dubai long-term.
Expo 2020 may have brought over a lot of working expats this quarter and with its postponement we may see less company paid rental cheques over the next quarter, however, with the new proposed date of October 2021, the success of expo 2020 will only be delayed.