Allsopp & Allsopp boss says rise in sales price is 'very encouraging' for Dubai propery market after months of declines
The average sales price of property in Dubai was 17 percent higher in the second quarter of 2019 compared to the previous quarter, according to broker Allsopp & Allsopp.
Its latest report on Dubai's real estate market also said that the average lettings price saw a 1 percent increase in the same review period.
Lewis Allsopp, CEO, said the rise in sales price was "very encouraging for the market" after previous reports had indicated months of price declines in the emirate.
"There have been quite a few ‘green shoots’ this year as well as a common perceptive that the market is either at or heading towards the bottom of the price curve," he said.
"Whether our Q2 result is an indication of more positivity to come and the signalling of a price stabilisation or turn, only time will tell," he added. "What this is showing is that the average overall transacted price has risen, and this is the first we have seen of this in some time."
Allsopp & Allsopp also said it saw a rise in buyer and tenant registration, with buyer registration up by 37 percent compared to Q2 2018 and up 12 percent compared to Q1 while transactions increased by 19 percent. Tenant registration is up 31 percent annually and by 16.5 percent on a quarterly basis with transactions rising by 3 percent.
Allsopp said: “The increase in buyers and sales transactions reported in Q2 reflects my prediction that the prices are now at the bottom of the curve. This is due to a lot of end-users having reached their outstanding mortgage amount, meaning they cannot sell, or they will not be able to cover the outstanding mortgage. This is when we can expect to see resistance from sellers accepting anything lower, the market reaches the bottom.”
The Allsopp & Allsopp also reported a 23 percent increase in secondary market sales in Q2 compared to Q1 while sales in the off-plan sector dropped by 30 percent. Buyers purchasing with finance rose by 35 percent while cash buyers dropped by 3 percent.
Allsopp added: “The increase in finance buyers and decrease in cash buyers is further clarity that end-user buyers are more prominent in the Dubai property market. The market has matured into more of a recyclable market that we see worldwide and is moving away from the need of the investors of 2006 to come and buy a building.”
The report also revealed a trend of more tenants paying in multiple cheques and a decline in people paying their rent in only one cheque.
In Q2, the number of tenants paying in three cheques increased by 59 percent while tenants paying with one cheque decreased by 9 percent compared to Q1.
Allsopp said: “We are continuing to see more tenants quarter on quarter paying with multiple cheques. Gone are the days of companies paying for their employee’s rent in one cheque.”
British-owned Allsopp & Allsopp operates from four offices across Dubai - Palm Jumeirah, Jumeirah Golf Estates, Springs Souk Mall and Business Bay. Set up in 2008 by CEO Lewis Allsopp and COO Carl Allsopp, the UAE arm focuses on residential sales and lettings in Dubai.