Dubai is in the midst of a seller’s market with Allsopp & Allsopp’s current ratio of buyer inquiries to new property listings standing at 8:1.
Buyers don’t have a lot of options in the market and urgency is being shown as prices are on the increase and have been for the last few months. They are signing on the dotted line a lot quicker than they previously would have through fear of missing out on a property they like.
Lewis Allsopp, CEO of Allsopp & Allsopp says “If you go back a year and a half, we were trying to convince buyers to look at properties as Dubai was in a buyers market. They weren’t keen to view as there was so much supply and with supply comes less urgency. If a property they like sold, they would simply find another property similar. However, we are now seeing multiple buyers for one property as there is little supply, therefore, creating urgency, and at times, driving the price upwards by means of outbidding each other.
Allsopp & Allsopp have waiting lists for certain properties meaning that those in high demand are selling before they reach property portals such as houza.com – the newly launched broker-owned property portal. What we are seeing is buyers are contacting agencies to find out what is becoming available – they are not waiting for properties to go live online. This is an encouraging sign for the Dubai property market and shows its maturity despite a global pandemic.”
The real estate brokerage reported record-breaking revenue generation for January 2021 when compared to any other month in the company’s thirteen-year history. The LTV and low-interest rates are a common denominator when it comes to buyers having the ability to step onto the property ladder.
Allsopp explains “First-time buyers make up 74% of our business at the moment due to the government stimulus package increasing the LTV and lowering interest rates – it has never been a more affordable time to buy. For example, in 2019 a property could be worth AED 2.5 Million ($1=AED 3.67) with a down payment of 33% at AED 800,000, but during the second half of 2020 and going into 2021, the same property could be purchased for AED 1.9 Million with a down payment of 26% at AED 400,000. Not only is it a lot cheaper, but clients are also paying less in upfront costs.
End-user buyers will consider paying more if they find a property that they like. Some are holding off on buying cheaper units and placing themselves on waiting lists hoping for the right property to become available and are willing to stretch their budget to the max.”
Allsopp & Allsopp report that the average sales price has risen in a number of areas across the city.
Here are a couple of examples from Allsopp & Allsopp data:
The Springs – Type 2M villa
The sold price rose from AED 1,820,000 in April 2020 to AED 1,975,000 in September 2020 to AED 2,475,000 in January 2021.
Victory Heights – Type B villa
The sold price in May 2020 was AED 4,100,000 compared to AED 4,800,000 in August 2020 and AED 5,100,000 in December 2020.
Ready and well-maintained properties of high-quality finish are currently in high demand. With much competition from buyers at the moment, we have witnessed undersupply issues, ultimately driving property prices up.