Last year saw prices softening as a result of weak consumer demand, oversupply, increased purchasing costs and global economic factors affecting investors. Even in such challenging times, the emirate had 60,595 real estate transactions, exceeding Dh259 billion in value, which was just around 2.99 per cent below the Dh267 billion recorded in 2015.
There were more than 41,776 sales transactions and a total Dh103 billion in value, and some 15,000 mortgage transactions valued at Dh128 billion. Land sales and mortgage transactions represented a total value of Dh193 billion across 15,994 transactions, the report showed.
Suraj Rajshekar, general manager of Rocky Real Estate, notes that secondary market sales were tough last year, although off-plan properties saw good demand, especially those with a smaller ticket size and good payment plan. “Dubai continues to attract buyers, but last year there were not enough sellers,” says Rajshekar. “[Sellers] were not willing to bring down their prices because of their continued trust in the UAE policy and leadership. Most people bought their units with a long-term view of 10-15 years and did not panic during the market slowdown, as was the case in 2008-09, because of the maturity and stability of the market.
“Hence, buyers did not get the great deals they were anticipating, and by the third to the fourth quarter, they started to buy realising that they cannot purchase units at distress rates.”
Amid the many challenges last year, PW asks brokers how they managed to win top deals, and their views on the future of the market.
Increased marketing
Akash Kanjwani, director, Sky View Real Estate Brokers
“We had done a bulk deal for 40 units with a single investor from Kuwait in Crystal Residence. The total worth of the units was Dh16 million. Last year we focused on two things. First, we teamed up with developers who are offering affordable property as the market for luxury property slowed down last year. We also increased our marketing for international buyers, primarily targeting investors from the GCC who are interested in Dubai property, which gives them the highest rental returns in the world. Our marketing budget last year was a huge jump both for print and digital media, which gave us a good number of leads. Initially, this year might be a bit challenging, but I see the market picking up from the second half. The Dubai government has taken various steps to boost the market; however, if the mortgage loan-to-value ratio is raised from the current 75 per cent to 85 per cent, the demand from end users will increase, benefitting both the real estate and banking sectors.”
Repeat business
Zarah Evans, managing partner, Exclusive Links
“We do have a specialist dealing with villas on the Palm Jumeirah, so we are lucky to have regular high-revenue sales. Last year, we transferred a Signature Villa for Dh25 million, a unit at Garden Home for Dh17.5 million and an Emirates Hills villa for Dh21 million. These bigger deals need to be recognised, along with the work that goes into securing and signing a deal worth Dh1.7 million or Dh2.5 million. The smaller deals are the bread and butter of any agency today. We have always prided ourselves on our repeat business, and we continue to nurture this. We had much more off-plan sales transactions last year. The previous year had been difficult, but I see that the market will improve towards the end of this year and continue to rise as we creep towards 2020.”
Strategic alliance
Chris Whitehead, managing director, Gulf Sotheby’s International
“Last year we had over Dh100 million in sales, including residential villas and land transactions. Our top strategies this year have been brokerage acquisitions, strategic partnerships, talent growth and investment and brand collaborations. Through global and local brand collaborations and strategic alliances, combined with digital and outdoor campaigns, 2016 was our most productive year so far. The realty sector remained soft throughout last year, but after this year’s summer season, we expect to see a change as the continued Expo activation plans drive jobs into the region. We also anticipate the tourism sector to strengthen demand with more tourist attractions opening and existing ones gaining momentum. All of this will create jobs and infrastructure growth. This, in turn, creates housing demand, which is what we expect to see.”
Team building
Robin Teh, UAE country manager, director of valuations and advisory, Chestertons
“In Dubai, our top sale was a villa property worth Dh7.5 million in Dubai Investments Park 2. The key to our success, primarily, was to build a quality team of brokers with good understanding and knowledge of the market. We found working directly with developers has worked well and resulted in strong sales for us. We are a global brand and hence used our network to attract clients through positive word-of-mouth endorsements, which has proved to be one of our best marketing tools over the years. Residential cash sales were approximately Dh18 billion last year, although this was an overall drop of 25 per cent from 2015. Records show an increase in mortgaged purchases, which points towards more owner-occupiers buying property in Dubai. Real estate prices dropped at a slower rate last year as the ripple effect of global and economic uncertainty continued to impact the Dubai market. We expect this to continue in the first half of this year and prices to remain flat. We also expect the downward pressure on rents to stay throughout the first quarter, with prevalent private and government cost-cutting measures prevailing, along with employment instability.”
Digital marketing
Kalpesh Sampat, COO, SPF Realty
“The biggest single sale we did last year was Dh13.7 million for a five-bedroom villa by Sobha Developers in Mohammad Bin Rashid City. Our sales strategy last year was to stay with investors and we focused on providing them best investment advice. We attracted new business last year by revising the method of marketing, allocating 75 per cent of the print marketing funds into digital. The digital strategy helped us reach newer target segments in different geographies and brought in brand-new customers. We also spent time identifying high-investment geographies and visited those locations, conducting road shows and private events with high-net-worth individuals in Hong Kong, New Delhi, Kochi, Beijing and Mumbai last year. We can boast now that almost 30 per cent of our investor base is international. Last year was a decent year and we were able to maintain our market share through innovative targeting. This year looks to be the year when the market should spring back up. We are confident that continuing our strategy and focusing on digital and the international market will reap in even better results than last year.”
