Dubai property listings now show 'realistic' asking prices as new RERA rules kick in
RERA's tightened scrutiny on multiple property listings is removing price distortions
Dubai: More ‘realistic’ prices are starting to show up in Dubai’s non-offplan property listings space, as sellers manage their expectations on what values are likely to help them find a buyer.
This is apparent in secondary market sales of ready homes at the Palm Jumeirah or some of the other luxury locations, as well as at more mid-priced communities such as Jumeirah Village Circle, according to a new report from Reidin-GCP.
What this means is that the gap is narrowing significantly between the asking prices and what those properties are selling for. It helps remove distortions in property pricing by removing highly inflated asking prices. And possibly help the seller’s chances of getting a deal faster.
The changes could also be related to tougher requirements the Dubai Land Department has brought in related to property listings. Currently, any particular property can only have up to three agents associated with the marketing and sales of it using online channels. Once a deal is done on that particular property, all listings have to cease or taken down almost immediately.
What this has done is remove all of the ‘phantom’ listings that used to show up when searching for ready Dubai homes for sale. These would even feature different prices put up by different estate agents on the same property.
Under the current Dubai Land Department template on online sales pitches, such distortions on prices have been removed. With just three agents allowed to market a particular property at any given time, the asking prices are seeing a clear moderation.
Which helps stabilize the price dynamics in the wider market and that can only be for the greater good.
What’s happening in JVC
The Jumeirah Village Circle has consistently been one of the highest transacted freehold locations in Dubai through the last 3 years, establishing its credentials firmly as a mid- to upper-mix residential option.
These days, the price gap between asking and actual transacted values have come down to around Dh200 per square foot, whereas it was upwards of Dh550 on average just over a year ago.
Palm trends
Similar trends are playing out at other locations. “On the whole, the city-wide gap between listing and transaction values has seen a net narrowing,” says the Reidin-GCP report. “Using Palm Jumeirah as a proxy for the wider luxury market, we can see that both apartments and villas experienced periods wherein they could be classified as a ‘sellers’ market. They are now normalizing and increasingly moving towards becoming buyer’s markets.”
How the Dubai property market is faring
Offplan launches continue to come through thick and fast over the last four months and over, and slowing down only during the Ramadan phase and in the phase immediately after the April 16 rains and flooding. In the last two weeks, normal service has resumed again on offplan releases, with developers expecting to get in another round of demand before any slow down happens over peak summer.
It is against this offplan onslaught that sellers in the secondary market have to contend with. This too is helping stabilise prices in secondary market transactions.
"The push to realistic pricing is brought on by the market supply and the gap between ready and offplan sales," says a market source. "Currently, offplan accounts for double that of ready home sales.
"Plus, there is the mortgage factor - ready home sellers need to offer more 'realistic' price options for their buyers to stand a better chance of getting a mortgage. Valuations by mortgage providers too are getting stricter."