Allsopp & Allsopp’s Quarter 2 (Q2) of 2019 has seen the average sales price of property in Dubai rise 17% compared to Q1 of 2019 whereas the average lettings price has seen a 1% increase.
Lewis Allsopp, CEO explains “This rise in sales price is very encouraging for the market after we’ve all been reading the headlines for the past few years on price decreases. There have been quite a few ‘green shoots’ this year as well as a common perceptive that the market is either at or heading towards the bottom of the price curve. Whether our Q2 result is an indication of more positivity to come and the signalling of a price stabilisation or turn, only time will tell. One thing I do want to make clear is that this isn’t saying a like for like property has gone up 17% in the last quarter and any drastic price increases shouldn’t be expected. What this is showing is that the average overall transacted price has risen, and this is the first we have seen of this in some time.
Allsopp & Allsopp see a rise once again in buyer and tenant registration as we see continued growth in population. The population of Dubai is increasing, according to the Dubai Statistics Center the city has seen a 6.4% rise since July 2018 putting the population up to just shy of 3.3 million. Buyer registration is up by 37% compared to Q2 of 2018 and up 12% compared to Q1 of 2019 with sales transactions experiencing a 19% increase in the same period. Tenant registration is up 31% compared with Q2 of 2018 and up 16.5% compared to Q1 of 2019 with lettings transactions seeing a 3% increase.
Allsopp says “The increase in buyers and sales transactions reported in Q2 reflects my prediction that the prices are now at the bottom of the curve. This is due to a lot of end-users having reached their outstanding mortgage amount, meaning they cannot sell, or they will not be able to cover the outstanding mortgage. This is when we can expect to see resistance from sellers accepting anything lower, the market reaches the bottom.”
Allsopp & Allsopp report an increase of 23% of secondary market sales in Q2 of 2019 compared to Q1 of the same year. However, sales in the off-plan sector have dropped by 30%. In line with this, buyers buying with finance have risen by 35% whereas cash buyers have dropped by 3%.
Allsopp explains “The increase in finance buyers and decrease in cash buyers is further clarity that end-user buyers are more prominent in the Dubai property market. The market has matured into more of a recyclable market that we see worldwide and is moving away from the need of the investors of 2006 to come and buy a building. The market of 2006 was a completely different market than the market of today. It is no longer a market that is dominated by investors, but, of course, investors are encouraged and welcomed especially with the recent announcement of the Dubai Land Departments new real estate investment opportunities which aim to attract a wider range of real estate investors to the city.”
The growing real estate company report a trend of more tenants paying in multiple cheques and a decline in people paying their rent in only 1 cheque. The majority of Allsopp & Allsopp’s tenants in Q1 of 2019 were paying an average of 3 rental cheques per year, the same majority as recorded in Q1 of 2018. In Q2 of 2019 the number of tenants paying in 3 cheques has increased by a significant 59% whereas tenants paying with 1 cheque has decreased by 9% compared to Q1 of 2019.
Allsopp says “We are continuing to see more tenants quarter on quarter paying with multiple cheques. Gone are the days of companies paying for their employee’s rent in one cheque. Dubai is maturing into a city to reside for the long run and not, as it was once perceived, as a city to save money and move back home”