Dubai: The COVID-19 seems to have shifted what investors are looking for in Dubai property – and completed homes are what’s interesting them right now.
This should come as a warning for developers still thinking of coming up with offplan launches and hoping buyers will queue up to pick up units.
“Buyers appear to be psychologically and financially drawn to inventory that is complete – a finished product they can touch and feel and enjoy,” said Naval Vohra, CEO of brokerage firm Appello.
Developers too have been seeing such a trend – Nakheel recently issued a statement confirming a fair level of buying activity for its complete or near-complete homes at Nad Al Sheba and Al Furjan. The developer pulled in Dh223 million between March to end May.
In the first six months, Appello fielded a 40 per cent increase in enquiries related to ready properties. “People are yearning for homes they can enjoy now - with green space on their doorstep, (safe) human interaction, [and] a sense of wellbeing,” said Vohra. “Who can blame them?”
Shifting priorities
Now, enquiries may not translate into sales, but leading brokerage firms are seeing a pickup in interest for completed homes… and especially those where the developer or seller is willing to bring down prices.
“Investors will be waiting to see whether asking prices will come down in the next month or so,” said an estate agent. “So far, despite the pandemic, we are not seeing too many sellers suddenly putting up mortgaged units or slashing their asking prices. But it will happen – much depends on how secure their jobs and incomes are.
“If they find themselves in a position where they are unable to keep up payments, then those units are likely to hit the market. Soon.”
Upgrade or downsize
The consultancy KPMG has issued a new property market update, where it says some Dubai tenants may look for "better-quality assets at reduced rates and may, therefore, choose to relocate". "Conversely, tenants affected by salary reductions and job cuts are likely to be looking to downsize and move to more affordable locations.
"This will increase vacancies in affected properties and apply additional downward pressure on market rents."
