The Allsopp & Allsopp Real Estate Q2 report shows an increase in sales transactions by 109% with an average sales price increase of 35% when compared to Q2 2020 but a 16% decrease in sales transactions when compared to Q1 2021.
Lewis Allsopp, CEO of Allsopp & Allsopp says “Listings have increased by 21% but transactions are down 16% since Q1 2021 when compared to Q2 2021. The decrease from Q1 is to be expected after the surge at the beginning of the year - this surge wasn’t sustainable. The reason behind the plateau is the emergence of ‘speculative sellers’. Sellers saw prices increase in the first three months of the year and are now ready to place their property on the market. This has resulted in some communities having more listings and as a consequence, buyers are taking more time to purchase a property or being more bullish when it comes to negotiating due to having more choice in the market.”
The traditional real estate brokerage reported a 67% increase in buyers registering their interest in properties in Q2 2021 when compared to Q2 2020 but a 14% decrease since Q1 2021.
Allsopp explains “The slight decrease in registrations from Q1 has a lot to do with residents travelling. With people perhaps being in Dubai for around 18 months without travelling internationally, we are seeing many residents travelling earlier than previous years as a result of some countries opening their doors to tourists. People are also having longer holidays as they navigate through traffic light systems in order to get back to their home countries.”
The top three buyer nationalities reported by Allsopp & Allsopp for Q2 are British, Indian and French. This is a debut for French buyers in the top three.
Allsopp says “Investors are coming to Dubai to buy property as they fear governments in European countries are pumping so much money into the economy that many Europeans are wary that taxes may rise in the near future as a result. Dubai has been very forthcoming with plans for the future with the announcement of the 2040 Master Plan and the fact that Dubai is tax free is a big pull for expats and investors and we are seeing a rise in European interest more recently.”
The leading real estate brokerage reported a 49% increase in mortgage transactions with 61% of buyers purchasing properties through the company with a mortgage.
“More than 60% of people who buy properties through Allsopp & Allsopp are doing so with a mortgage” says Allsopp “People move to Dubai and they build a life here creating an ecosystem for the real estate market - an ecosystem that is getting stronger and stronger and I believe will soon be on par with that of the UK. Business set-ups are rising and well known, global companies are setting up hubs in the Emirate adding to the economy and the likelihood of enticing expats to the city.”
Allsopp & Allsopp reported a 42% increase in lettings transactions since Q2 2020 but a 10% decrease in the same since Q1 2021.
Allsopp explains “As a company, we have seen a lot of rent renewals this last quarter with tenants willing to pay an increase in rent rather than pay the moving costs and the increasing prices in the market. In some cases, it is cheaper to pay a slight rental increase than move to a similar property as the prices have risen by 2% since Q2 2020.
“Tenants are also paying in more cheques - a trend that has been emerging for a while now and has been emphasised as we have navigated through the pandemic. I predict we will see this happen more and eventually we will see rent payments in one upfront payment becoming a thing of the past. This is unheard of in many property markets around the world with monthly payments being the norm.”
Lewis Allsopp concludes “Now we are in a secondary market and it's good to see after years of speculation of Dubai’s property market bubbles - the market is correcting itself with little government intervention. I predict prices will plateau and slowly incline as we go through the years. We have seen quite recently average sale price increases in double figures but what we are now predicting is a 1% or 2% increase which is a steady, healthy incline and a sure sign of a mature market.”
“I believe that travel will impact Q3 with a number of restrictions still in place but I think we will continue to see marginal growth in transactions. I predict that in Q4 we will see a significant uptick in transactions as we welcome the Expo and we see the effects of pent up demand from travellers who can finally come and visit Dubai.”