Prices get realistic in Dubai real estate
Despite still low volumes, more secondary market deals show value gains
Dubai: Dubai’s property market is throwing up all sorts of numbers and trends, even some that are seemingly at odds with one another.
Aditi Hariharan, Senior Consultant at the property services firm Cavendish Maxwell, offers up two as examples. “While the volume of secondary market transfers for villas/town houses between January and June declined over 30 per cent (from a year ago), the average value increased 14 per cent,” she said.
14%
But in the apartment category, the situation was such that gains were made on both the number of units sold and the average value these deals fetched in the secondary market. So, what could explain the sudden improvement in sales values at a time when the wider market is still downbeat?
“It could possibly be because of more premium products being sold in the secondary market,” said Hariharan.
Market sources say that in recent weeks there has been a spurt in investor-related activity, and many of these have been for properties in established locations. The Palm is getting a lot of mentions, as is the Downtown and Business Bay.
9.9%
In fact, according to Cavendish Maxwell, Business Bay had the largest share of secondary sales transactions — at 9.9 per cent — in the first-half, followed by International City (7.5 per cent), Dubai Marina (7 per cent), Jumeirah Village Circle (6.5 per cent) and the Palm (5.5 per cent).
Maintain momentum?
These numbers are interesting because in the recent past, the attention had been fixated on off-plan launches and what developers were doing with post-handover payment plans right through 2017 and 2018. Against such aggressive sales tactics in the off-plan/primary space, it took a while for sellers in the secondary market to get their bearings back. But based on the year to now deal flow, they are back in the thick of action.
In doing so, they are using some of the same tactics as developers, offering spread out payment plans for some or some other incentive.
“No one is saying distress sales have gone completely — but there are deals taking place at realistic levels that was not there in the last two years,” said Sailesh Israni of Sun & Sand Developers.