Is Dubai property price hike for real?

Real estate experts divided on reports of market performance

While various reports suggest Dubai’s real estate market will remain sluggish this year, many property owners have increased their sale prices.

Villas in The Springs or apartments in The Greens are being advertised at a higher sale price than a few months ago.

Is this increase (which some real estate agents say is as high as 30 per cent) for real, or is it just a feel good factor for property owners?

It could be a combination of both, according to real estate experts.

According to Michael Michael, Director of Landmark Properties, “It’s a combination of a number of things.”

“Yes, within certain projects such as the Meadows, Arabian Ranches and the Downtown area, specific types of units as well as specific towers or sub-projects (example Meadows 1,2,3), we have seen stability in pricing and in a few cases a slight increase due to the lack of ‘best units’ availability. However, some sellers are increasing prices because of rumours including visas, increased lending, etc., which is unjustified as the demand has not increased and, therefore, nor should the pricing,” he told Emirates24|7.

Some experts believe reports on Dubai real estate take into account all the areas in the city but not all locations/projects are expected to perform in the way.

“Any report about the real estate market takes a general view of new locations with properties that will be handed over this year and or new and existing locations where infrastructure maybe a challenge and amenities are limited.

“Therefore, when you look at specific locations and properties, there is an improvement in price due to a couple of factors - limited availability of a particular unit for which there is strong demand and a particular residential community, which is particularly sought after due to the lifestyle and convenience it offers to the residents i.e. location, built quality, shops, schools, environment,” elaborates Vineet Kumar, Head of Business Development at Asteco.

Also, gone are the days when distress sellers were influencing the market.

“We should also be aware that many of the motivated sellers have now exited the market and the existing owners are aware that their property can be sold or at least they can attempt to sell at a higher price.

“They have the luxury of time and many are prepared to wait for the right offer and if nothing else. Higher asking prices allow vendors to begin with a starting price from which to negotiate.

“This activity underscores that fact that Dubai’s real estate market is maturing and quality properties in popular areas will attract a premium if supply is limited.”

Real estate companies have tagged last quarter perhaps the best one after a long time when it comes to sales.

According to Jan Tabrizi, Manager – Residential Sales and Leasing, Head Office, Better Homes, “We have seen tremendous increase in sales during the last quarter. In fact, we have had our best quarter since the 2009.

“Areas such as The Springs, Meadows and The Greens have always been in demand and now that the distress sales are gone from the market and the demand is very high for these developments and [there is] not enough stock.

“We are experiencing a rise in the asking price of the properties. It's true that the prices are higher compared to a few months ago but they still have to be realistic and in tune with the market; and, sellers must be willing to negotiate to a certain degree if they are serious about selling their property,” he told this website.

 

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