Dubai House Prices Approach Bottom of the Curve

Charlie King, Dubai’s Best Agent of 2018 as awarded by PropertyFinder shares his thoughts and predictions on the Dubai property market.

Residential property prices will start to regain traction in the near future

The Dubai property market is busy and exciting this year. 2019 has seen sales transactions and buyer registrations rise.

I have found buyers to be a lot more specific with their requests. They are looking for more for their money which could be put down to the decline in pricing. Buyers are requesting to view more property options than in previous years, but this could also be put down to the majority of buyers being end-users.

Working in Dubai International Financial Centre (DIFC), I deal a lot with investors, but I must say that end-user buyers are more prominent in the area. I have seen a lot of individuals, couples and a few families looking for homes to live in this year.

This is a suggestion that the Dubai property market is maturing and confidence in the city as a whole is growing. Expats are starting to plan their future here as their jobs are becoming more secure and the lifestyle is hard to match elsewhere.

« The Dubai property market is maturing and confidence in the city is growing. Expats are starting to plan their future here. »

A very common trend I have noticed recently is buyers upgrading to larger properties. Those in a 1 or 2-bedroom apartment are now seeking a 2 or 3-bedroom apartment for sale in Dubai. According to Allsopp & Allsopp, the average selling price of a Property For Sale in Dubai has decreased by 15.5 percent since 2018 and buyers are certainly taking advantage of this trend. I get a feeling that people now predict Dubai is at the bottom of the curve and prices will start to regain traction in the near future.

In my opinion, end-user buyers are typically people who are working within DIFC, but I have noticed an incline in families and couples not necessarily working in the area showing a lot more interest due
to the expansion and the addition of Gate Avenue. This creates more of a community feel within the business hub.

However, I have seen investor confidence throughout my time working in DIFC. Despite the decline in pricing, the presence of investors has stayed consistent. DIFC is the financial hub of Dubai and could be argued as the financial hub of the Middle East.

When it comes to Dubai, the majority of investors prefer location to rental yield. They would rather have a more central property with lower return, say 4-5 percent, than be further afield with a higher return of closer to 10 percent. This is down to the central location of DIFC, Downtown and other key areas of Dubai remaining extremely popular with expats and retaining their price per square foot more than anywhere else.

Investors will always be prominent in DIFC because of the companies and banks that are located within the area. Following the recent announcement of DIFC 2, it is encouraging to see more end-user buyers as well.

With such an influx of new buyers registering for areas throughout Dubai, it’s imperative for me, as an agent, to deliver the best service I can. I always like to give my clients as much information as they need and being an expert in my specialised community, this comes with ease.

Flexibility as a real estate agent is key. I always make myself flexible around my client’s needs as every client is different. The job of a real estate agent has no set timings if you are willing to excel in the role. Most of my viewings take place in the evenings and over weekends. Buyers and sellers can choose from an array of real estate agencies across Dubai, but I think it is important to go with a company that is established in the market and who operate within a structure. Follow-ups and communication are imperative to get a deal done quickly which will benefit both parties. Agencies who provide professional photographs and invest highly in marketing are second to none.

Winning the Property Finder Best Agent Award in 2018 has given my new clients a lot more confidence in my capabilities. Trust is easier to gain when I have the prestigious award as it provides proof of my professionalism and transparency. It is very easy to tell a person they can trust you but a lot harder to prove – the award speaks for itself and really makes a difference when dealing with both buyers and sellers. The Property Finder Awards are extremely valuable to brokerages across Dubai. The awards are respected and highly recognized throughout the real estate sector.

 

Charlie King for PropertyFinder 6th August 2019