By Neeraj Gangal
Motivations for moving homes stay positive for Dubai residents – survey.
As much as 68% of Dubai's population households feel that they have been negatively impacted by the financial crisis, a latest consumer confidence survey of the emirate’s residential property market has revealed.
GRMC Advisory Services, a provider of research and business advisory in the GCC, released on Thursday its findings from its December 2009 survey.
According to the GRMC press release, the report titled ‘Dubai - Surplus Luxury’, draws on findings from GRMC's December survey of 1,100 individuals in Dubai which determined respondents’ financial circumstances and whether they have moved residence since the financial crisis began.
The survey also examined how optimistic respondents are regarding Dubai's economic prospects and whether they plan on moving or purchasing residential property in 2010. the release added.
According to the report, the results indicate that 68% of Dubai's population households feel they have been negatively impacted by the financial crisis.
However, households that have actually suffered a reduction in income are a minority; 58% of the sample reported their income remains the same and 7% cited that it had increased.
Of those who said they had been negatively impacted, 51% reported their income had decreased and the impact was observed to be greater in lower income groups, the report added.
‘Dubai - Surplus Luxury’ said that respondents who had suffered a decrease in income saw an average 16% reduction in household income over 2009, during which 9% of this group also changed their residence.
A noteworthy aspect of this observation was that the motivations for changing their residence were, however, generally positive.
Only 42% reported they were motivated by affordability and the remainder moved to larger, higher quality or better-located units despite their reduction in income.
“This makes economic sense if people are confident that income and jobs are secure; given that rental rates and selling prices have come down significantly more than income, property has become more affordable in relative terms leading them to feel secure in their decision to upgrade,” the report noted.
GRMC's survey also asked respondents how optimistic they were regarding their financial circumstances and the results show the majority are neutral or optimistic, with the average indicating a mild optimism.
This optimism shows up in future real estate preferences as well. Among the sample 12% of respondent expressed interest in renting or purchasing a new property during 2010; 83% of these respondents were interested in renting rather than purchasing a new property. In the current circumstances the unavailability of credit and uncertainty over future prices are key inhibitors among potential purchasers.