Allsopp & Allsopp, Dubai’s fast-paced, forward-thinking real estate brokerage reports a decrease in average sales price when compared to Q2 but an increase in lettings price as well as an increase in property management transactions.
Lewis Allsopp, CEO of Allsopp & Allsopp says “Q3 has been an interesting quarter for the real estate market as residents began to travel, new expats were welcomed and the dynamic and motive of buyers and sellers began to change slightly.”
Allsopp & Allsopp report a 12% decrease in sales transactions from Q3 2020 and a decrease of 25% from Q2 2021 when compared to Q3 2021.
Allsopp explains “The decrease in sales transactions was expected this quarter as the travel industry started to pick-up after a long 18 months of restrictions. The Dubai summer time is a chance for expats residing in the city to travel overseas as the school holidays commence and the heat cranks up here in the UAE. A slowdown in transactions over the summer months is no surprise but we did see a more significant decrease in sales transactions over July and August. Many residents took the opportunity to travel after having been in Dubai for many months and as a result, extended their travel plans and were out of the country for longer than usual. It has to be mentioned that September was a very busy month for sales transactions as residents flocked back to the city for the start of the school term which resulted in September becoming the third best month in terms of the number of deals done, and the revenue generated in thirteen years.
On the other hand, the brokerage reports a 6% increase in lettings transactions since Q3 2020 and a 29% increase in tenant registrations in Q3 2021 when compared to Q3 2020.
Allsopp says “As we saw residents travel outside of the UAE to visit family, we also saw an influx of expats who were perhaps waiting to make the move to the UAE for quite some time. Summer months are a great time to move to Dubai because it is quieter but many expats still choose to come when the weather is cooler. However, post Covid-19 and travel restrictions we saw many new tenants make the move to find a home away from home much sooner this year. For most, their move to Dubai had been delayed by quite some time so they have been eager to get started in their new roles and get settled as soon as possible.
Allsopp & Allsopp report an average property sale price increase of 14% since Q3 2020 from AED 2,590,157.16 to AED 2,945,942.53 but an 8% decrease from Q2 when the average sales price was AED 3,195,849.32.
Lewis Allsopp explains “The decrease in sales price from Q3 was to be expected after significant rises in the beginning quarters of the year. We should now begin to see prices level off as we move through the end of this year and go into 2022. A trend we have noticed recently is a rise in what we call the ‘speculative seller’ - a property owner who is placing their property on the market to see what price they could potentially sell at with no real intention to go ahead with the sale. The impact this has on the real estate market is detrimental as it gives a false sense of achieving a higher price for properties to sellers and has the potential to discourage buyers who think they have been priced out of the market.”
On the other hand, the leading real estate brokerage reports a 9% increase in average rental price since Q3 2020 from AED 133,088.91 to AED 139,573.28 and a 5% increase from Q2 when the average lettings price was AED 133,451.75.
Allsopp continues “However, we have seen a rise in average lettings price from Q2 2021 when compared to Q3. I put this down to a significant rise in demand. Tenant registration has grown with new expats moving to the city and with a lot of residents renewing rental contracts, less people are moving and making way for those who are starting out their Dubai property journey and for those looking to take the next step into villas and townhouses with more space. Tenants are staying put as they see rental prices rise city-wide and with the addition of moving costs and stress, are making the decision to extend their tenancy.
As a result of tenants staying put and rental prices rising, we have had a lot more inquiries from landlords and tenants about rental increases and what is permitted lawfully. Tenants are aware of their rights. Landlords can only increase rent if the current annual rent is below 11% of what the average rental price is and there are restrictions on how much rental increase is allowed - from 5% to a maximum of 20% depending on the current rental price.”
Allsopp & Allsopp report a rise in property management transactions by 53% from Q3 2020 when compared to Q3 2021.
Allsopp says “As a result of the Covid-19 pandemic, we saw a rise in transactions for property management as landlords overseas or those who had multiple properties were more inclined to have a professional body in charge of managing their investment. This has continued throughout the year as we have noticed the renewals in tenancy contracts and landlords are less likely to get involved in negotiating with their tenants as this can be time consuming when it comes to the rules and regulations.”
Allsopp & Allsopp launched their short-term lettings department in Q1 of 2021 and have seen momentum build significantly. The brokerage reported a 107% rise in booking enquiries for short-term lets in the two weeks following the UAE being added to the UK’s Amber list compared to the two weeks prior to the announcement.
Lewis Allsopp says “We are seeing a lot of UK nationals enquiring for a maximum of two month stays in our short-term lettings units. This is mainly because they are unsure as to which area they would like to be when committing for a long term basis or while they wait for their Visa and Emirates ID to complete the long term process.
Short-term lettings is growing ever popular within the expat community, especially with those who are looking into life as an expat in Dubai. The enquiries we are receiving are for trial runs in a ‘home’ environment and people coming over for interviews and looking for jobs. Tourist bookings for holiday homes are rising as are corporate stays with Expo 2020 commencing in October. People coming to work at Expo are looking for a home away from home rather than a hotel stay.”
Allsopp & Allsopp have expanded further in Q3 2021 with the soft launch of their Home Maintenance department.
Allsopp says “Allsopp & Allsopp are forward-thinking and always looking to advance wherever we can. It’s an aspect of our culture that will never change - we will constantly strive for better across the board. It is our aim to be involved in every aspect of our client’s journey and we work towards this aim continuously. The next six months will be exciting as we reap the rewards of the decisions we’ve made at the beginning of this year with the launch of our short-term lettings department and more recently, our Allsopp & Allsopp Home Maintenance division. As these departments grow, we set our sights on expanding into new offices and warehouses.”
*Data and statistics quoted are strictly Allsopp & Allsopp transactions from the period of 1st July to 30th September 2020, and are not reflective of the Dubai property market as a whole.