Dubai property buyers need to get realisticon price expectations

 

For a true pulse on market performance, go with what’s happening
on ready homes

When it comes to property investments in Dubai, the best way forward is to
formulate realistic assumptions regarding the trajectory of the real estate
market. To do so, it is essential to delve into the fundamental cycle that
propels real estate prices.
What are the underlying principles that drive these price? While there exist
any number of valid reasons behind the buoyant state of Dubai & real estate
market, they all converge on certain pivotal triggers that fuel price increases.
This cycle commences with an intricate interplay between supply and demand,
particularly for ready properties. These residential units serve as true
indicators of the actual real estate market & pulse, as opposed to off plan sales.
This is because off plan sales tend to diverge from demand for ready
properties, because they are overly reliant on investor enthusiasm and market
sentiment to propel them.

A good market run

Consequently, they cease to accurately represent the essential factors that
drive the market. Nevertheless, it is vital for all investors – and landlords – to

maintain a sense of realism. The rapid price escalation in Dubai property from

late 2020 onwards – when the market was at its lowest point – cannot be

expected to continue at the same pace indefinitely.
Therefore, it is prudent for sellers and landlords to identify the actual market
value of their properties using the open data sources provided by Dubai Land
Department. Depending on their willingness to sell or rent, as opposed to
waiting for the ‘perfect’ time for a buyer or tenant, they should make informed
decisions, even if it entails accepting offers slightly below their expectations.
While there is a noticeable upward trend in the number of transactions, as
evidenced by 31,000 property sales transactions and a 23 per cent increase
compared to Q3 2022, as well as a sales value of Dh98 billion in Q3-2023,
investors must be cognizant that healthy trend, while indicative of market
sustainability, does not imply an endless surge in property prices.
The substantial increase in supply, exemplified by the registration of 90 new
projects in Q3-23, representing the highest ever for any third quarter in the
past. With this surge in supply, demand may become diluted across numerous
projects in the market, potentially slowing down the rate of price appreciation.
Unrealistic market dynamics must be avoided for the sake of long-term
sustainability. In summary, the Dubai real estate market exhibits stability in
terms of transaction volumes and property prices. However, no investment
decision should be made without scrutinizing the stats at the unit level. The
Dubai Land Departments& provision of data is a valuable resource for all
market stakeholder…