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Mon 18 Jul 2016 06:27 PM

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Real estate agent claims 'definite shift' in Dubai property market

Realtor says demand from buyers 'definitely putting prices up' amid contradictory claims about health of local sector

Real estate agent claims 'definite shift' in Dubai property market
sheikh zayed road, weather

The flurry of contradictory reports about the health of the Dubai property sector is continuing, with one local realtor claiming that there has been a “definite shift” in the market.

Lewis Allsopp, the chief executive of Allsopp & Allsopp said that the firm had recorded an 11 percent increase in sales over the last quarter, with 83 percent of these coming in the sub-AED4 million ($1.1 million) bracket.

The company said that it had also registered more buyers recently than at any other point in its eight-year history, and that recent patterns were likely to lead to increasing prices.

“Demand from buyers is already putting prices up. Every property we’ve sold in the last two months has had multiple offers on it and ended up selling above the listed price,” Allsopp said, in a press statement, although the company declined to confirm to Arabian Business how many properties it had actually sold during that period.  

“This is the first time in the last two years owners are increasing the asking price and actually receiving it. We’re starting to see bidding wars with multiple buyers putting offers in – and it’s all in the under AED4 million segment.

“We’re actually registering more buyers than properties so we’re starting to see a shortage of supply, which combined with buyer demand and sellers putting prices up, all points to a shift in the market.”

The CEO also said that the easing of mortgage caps, which are higher for properties valued at over AED5 million, would support the high-end segment of the real estate market. 

The bullish assessment from the realtor comes as other observers argue that the market may have further to fall, or that it will take much longer for values to increase. 

In June, Phidar Advisory warned that the fall in property values and rents is set to continue over the summer.

Phidar said that although less than 20,000 residential units had been completed over the past year, giving some stability to the market, anecdotal evidence pointing to a pattern of redundancies and slowed job growth – as a result of the impact of the oil price and tighter regional liquidity – might be beginning to take their toll.

“Rent declines usually turn into sale price declines, especially considering the prevalence of yield-sensitive investors,” the research added.

“So, the sale price decline will likely accelerate in the coming months.”

Phidar also said that the oversupply in Dubai’s residential market was expected to remain until 2019.

In further research published on Monday, property consultant JLL said that the impact of the UK’s decision to leave the European Union could adversely affect the Dubai market. The agency said it saw recovery in Dubai real estate in “early 2017”.

Reidin research shows that Dubai apartment sales fell by 5 percent in the second quarter year-on-year, while villa sales dropped by 6 percent.

Apartment rents fell by 3 percent, while villa rents declined by 6 percent.

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SA1 3 years ago

"We’re starting to see bidding wars with multiple buyers putting offers in"...
the laws of economics does not apply ....

Insights 3 years ago

The CEO of this estate agent clearly has sunstroke, his statement contradicts what is really happening to property prices in Dubai

Trippy 3 years ago

I have no clue what is he tripping on...

Sam 3 years ago

Don't ask a barber if you need hair cut said the famous investor W Buffet.
This entire so called analysis is done by property brokers whose livelihood depends on flipping houses.. what do you expect them to say? When prices go up, its buy now prices will go up and when its down, buy now it will go up soon!

nick 3 years ago

Why would anyone believe what an estate agent has to say, they are bound to talk the market up as it's in their interest to do so ! It would be better to have reports from independent analysts who work with the facts.

gordon 3 years ago

sold a property 3 months ago, set a price, was prepared to drop 100k to let go, instead it was bid up 3 times and ended up with 250k more than expected

Telcoguy 3 years ago

As usual "although the company declined to confirm to Arabian Business how many properties it had actually sold during that period."

Jack 3 years ago

Such as this report by REIDIN?
http://www.arabianbusiness.com/dubai-property-prices-rise-in-may-down-5-3-annually-637259.html#.V43gI-lf3IU

Nigel 3 years ago

Total nonsense, puff stories should never be published. Without hard facts or reliable data from a research study these spin stories should be ignored

Estate agents in Dubai and truth, don't think so

Mason 3 years ago

Facts on the ground tells different story; the region is going into rescission and RE prices, in my humble opinion, have topped and has only one way to go; DOWN.