Leading real estate brokerage, Allsopp & Allsopp report a rise in sales transactions and a rise in average sold and rented prices.
The multi-award-winning company has seen sales transactions rise by 50% from Q3 2019 to Q3 2020, rising 73% from Q2 2020. Buyer registration rose by 95% from Q3 2019 to Q3 2020 and increased a further 35% from Q2 2020.
Lewis Allsopp, Chief Executive Officer of Allsopp & Allsopp said “Since the Covid-19 lockdown ended, we have had an increasing number of clients registering their interest to buy a property and this has only increased further in Q3 and, therefore led to a record amount of sales transactions. First-time buyers are becoming more aware of the opportunities given to them from the UAE government stimulus package which included the increase in loan-to-value of 80% and mortgage incentives, meaning properties were more affordable and the overall down payment including fees reduced from 33% of the value of the property down to 22%.
We have also seen a rise in investor buyers. 28% of buyers purchased properties paying in cash in Q3, 2019 and in Q3 2020, this rose to 40%. Investors are seeing a great opportunity in the Dubai property market and are snapping up properties whilst prices remain attractive, sometimes achieving a rental yield of up to 10%.”
The number of properties brought to the market has decreased by 13% in Q3 2020 compared to Q3 2019.
Allsopp explains “The number of listings decreasing by 13% came as no surprise as we have an influx of buyers who are struggling to find properties which meet their criteria. There is a lack of desire to sell at the moment unless sellers have a solid motive to do so such as a move overseas or a move to a new property to suit a growing family. We have so many buyers registered and ready to buy a property when it comes available that in some instances, when a seller instructs their property for sale, we end up selling it before it goes live on our website and property portals. This goes to show how significant the rise in buyer registration is and that the decrease in properties coming to the market is causing urgency which in turn leads to buyers being willing to stretch their budget to compete with others in the market looking for a highly sought after property leading to an undersupply in key areas for certain property types”
Allsopp & Allsopp have recorded a 3% rise in the average sales transaction price from AED 2,209,397 in Q3 2019 to AED 2,284,491.81 in Q3 2020 and a 2% rise since Q2 2020 when the average sales transaction price was AED 2,240,424.
Allsopp goes on to say “This undersupply has led the average sold property prices in Dubai to rise as buyers are becoming aware of the competition from other buyers in the market. For those looking for a specific property, there is often a waiting list and when that particular property type becomes available there can be multiple buyers on a waiting list - some of which have been waiting for some time and are ready to transact and therefore willing to stretch their budget to out bid other buyers to get the property they desire.
Dubai property prices have steadily declined over the last six years, however, the market is certainly experiencing a V shaped recovery post lockdown and I see this continuing through Q4 and even into next year. This recent rise in average sold price is hugely encouraging and as a result we have seen a record number of clients registering their interest to buy as well as record sales transactions and the most revenue generated since opening in 2008.”
The average age of buyers 45 years and above has risen by 84% since Q3 2019.
Allsopp says “The introduction of the Dubai Retirement Visa in August is already having an effect on the Dubai property market. We have had many enquiries from clients who are interested in investing in properties to avail the 5 year Retirement Visa. To be eligible for a retirement visa, an option is to own a property in the country that is not mortgaged and is worth no less than AED 2,000,000. Another option is to have a monthly income of AED 20,000 and we have had many enquiries of expats broadening their property portfolio in the city to build up their monthly income with retiring in the UAE at the forefront of their ambitions.”
The most popular area for sales in Q3 2020 was Arabian Ranches knocking Dubai Marina into second place - a community which usually holds the top spot.
Lewis Allsopp says “Arabian Ranches holding top spot in sales comes as no surprise as villa communities are in high demand post lockdown as people value outdoor space now more than ever. Areas such as Dubai Marina will forever be a firm favourite in the Dubai property market but it is interesting to see a villa community take the lead. Dubai is changing for many into a forever home rather than a temporary place to stay before moving back to their home country.”
The company reported a drop in lettings transactions by 33% since Q3 2019 but a rise of 14% since Q2 2020.
Allsopp explains “I believe the drop in lettings transactions is down to the travel restrictions and uncertainty amidst the Covid-19 pandemic. For expat tenants already residing in Dubai, many have negotiated reductions in rent and others have decided to buy their first home prompted by the LTV increase. On the other hand, some tenants have moved to bigger properties prompted by the lack of space in their current property during lockdown which would explain the 14% increase in transactions in Q3 compared to Q2.”
Allsopp goes on to say “In recent months, fewer expats have been making the move to Dubai and therefore, a drop in rental transactions has become apparent. I predict that this will change as we go into Q4 and even more so, as we enter 2021 as job losses worldwide make an impact and may encourage more people to the emirate for different work opportunities. As a company, we have hired a record number of candidates from varied industries who have found themselves, unfortunately, without a job. This increase in workforce has prompted us to open our eighth office in the UAE.”