By Staff writer
Latest Reidin-GCP data shows property values registered slight gains in mid-market communities such as Discovery Gardens and International City
Mid-market freehold communities in Dubai are showing marginal price recovery compared to high-end areas, according to a new report.
The latest Reidin-GCP data shows property values registered slight gains in mid-market communities such as Discovery Gardens and International City, while price stability was reported in high-end communities such as Palm Jumeirah and Dubai Marina.
In the year-to-date, apartment values are down 0.5 percent against 2015, while villas are 0.5 percent higher, Gulf News reported.
“Transactions are rising not only in the mid-end but also at the higher end. The high-end cluster price drops have moderated quite a bit,” Sameer Lakhani, managing director of Global Capital Partners, told the newspaper.
In October this year, Phidar Advisory said property prices continue to decline throughout 2017 as slow demand growth delays any recovery in values.
“Slow demand growth remains the immediate barrier for price recovery,” said company managing director Jesse Downs said.
The Reidin-GCP said mortgage transactions have doubled in a span of four years.
“Historically, the market used to heavily dependent on cash transaction, with mortgages only accounting for 25 percent of entire activity. However, in the last four years there has been a shift away from cash transactions and towards mortgages, where the latter now accounts for nearly half of all activity. This shift can be attributed towards an increase in home ownership, refinancing from existing owners to extract liquidity and investors taking advantage of capital structures,” it said.
The report also added that only 18 percent of Dubai’s working population was taking home over $2,725 (AED10,000) a month - the minimum salary limit for taking a mortgage.
“But in the 10 years from 2005, the population has seen a swelling in the ranks of white-collar professionals (by 48 per cent) and in the managerial class (by 87 per cent). More of them could provide a boost for Dubai’s property market, from a rental and sales perspective,” it said.
Dubai’s population as of September 2016 is estimated at 2.56 million. Annual population growth rate was 5.6 per cent in 2015, Gulf News reported.For all the latest real estate news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
The Dubai property market is not a domestic one due to the fact as indicated in the article that only 18% of the population can even remotely qualify for a mortgage.
Take into consideration that anyone on 10K AED a month would never actually be able to save enough for the deposit means that in reality its probably closer to 5% of the population who have the means to buy.
The market is an international investors and rent seekers paradise. This is what helps them stay on the highest tier of the 'happiness rankings'
One of the biggest hurdle is also 4%DLD charges which is highest in the world
It's interesting to see the increase in mortgage transactions. Now whether it is refinancing or new buyers, it indicates an underlying sense of stability in the market. It's also clear that there is an undersupply ion units at the mid market en, so it is unsurprising to see prices start to move higher. Too early to tell whether this is sustainable though. Still, good news!
High 4% DLD charges? In a emirate with no income or capital gains taxes, Dubai has to pay for the physical infrastructure, roads, water pipes as well as police, security, civil defence etc all of which makes a Dubai property attractive in the beginning. If I owned an investment property in the UK and died my surviving relatives are likely to have to pay up to 40% of the property value back to the government before they released the property to be sold. 4% up front isn't nothing but on the whole it's not a lot.
Marginal increases in mid market does not a recovery make especially when you consider the mid market sector is wildly under resourced.
As usual Jesse Downs is the voice of reason.
That said I think we will see a rise in the lower end market both in terms of sales and rentals as employers replace high earners with cheaper alternatives. This will only put more pressure on the high end market however.
in my home country , I pay 8% :-)
Arabian Business should desist from posting these type of dubious articles from the so called 'expert' Real Estate agencies. Over the last 12-18 months I have make a collection of all the articles published on the Dubai Real Estate market (including from the CEOs of some of the major big names) and each paints a different picture. They are most un-realiable, dubious guesswork of some so called experts. Property owners, buyers/sellers - study the market with your own research, look at the ground reality and make your own decisions, without relying on such hype or misleading agencies reports.