After a significant rise in property listings in Q2 after months of an undersupply, Lewis Allsopp explains the shift and what it means for the Dubai property market.
Dubai real estate has been suffering from an undersupply in properties listed for sale for some time now which has had an impact on the sales price. We have seen property prices rise by 35% from Q2 2020 when compared to Q2 2021 as a result of the increase in demand from buyers and the limited number of properties available. However, Allsopp & Allsopp have seen sales listings rise by 23% from Q1 to Q2 of 2021. Could this be the turning point?
In my opinion, a rise in sales listings is a sign that the market hasn’t changed per say but sellers are becoming more attracted by the prices they can now receive for their properties which is encouraging them to sell and we may now see prices in the market in certain areas start to stabilise as a result.
Buyer registration remains high and with more supply becoming available in certain communities across the city, sellers are certainly experiencing less bidding wars for their properties but are still receiving close to, if not over their asking price in some cases. I wouldn’t say we are at a stage just yet where the market is swinging in favour of the buyer but there's more choice for buyers which is making their search slightly less stressful and sellers are not always finding themselves in a position where they have multiple buyers offering on their home at the same time.
In saying this, properties are selling quickly if they are priced correctly and are well maintained. The areas we have seen the most significant increase in listings since January 2021 to May 2021 are Downtown Dubai by 240%, Green community by 300%, The Springs by 100% and Victory Heights by 400%.
Some sellers who are now putting their properties up for sale are doing so to buy elsewhere in Dubai. We have seen a number of chain buyers and sellers in the market recently which is a sure sign of a maturing real estate market. As a result of this chain, we have seen certain deals dependent on the sale of a property in order for the new buyer to be able to have the funds available for their next purchase. We have seen slight delays as a result due to first time buyers awaiting pre-approvals for their mortgages and as a result, these buyers are losing out on properties due to the time restrictions the seller who is planning an onward purchase has put in place.
It is so important in this fast-paced real estate market that buyers are prepared with their pre-approval before viewing properties but most definitely before making offers. Not only is a delayed pre-approval adding stress and pressure on chain sellers but it also means buyers are missing out on the properties they want. A current mortgage pre-approval is taking some time depending on the buyer's financial circumstances and many buyers are waiting until the last minute to start the process and finding themselves facing unexpected hurdles.