DUBAI 10 November 2019: A rise in mortgage buyers, cash buyers, secondary market sales and multiple cheque rental payments in Dubai has been reported by a leading real estate company..
Allsopp & Allsopp report an 18% increase in cash buyers in Q3 2019 compared to Q3 2018 showing that buyer sentiment is building.
Another report by Bayut.com said Sharjah and Ajman continue to attract families with attractive prices for sale and rent.
“More often than not, cash buyers are buying for investment purposes. We conducted a survey of buyers at random over the summer months to see what enticed them to purchase property. 43% of people asked, were for investment purposes,” said Lewis Allsopp, CEO of Allsopp & Allsopp.
“Many investors are predicting the market prices are nearing the bottom of the curve and they are taking this opportunity to get the most out of their rental yield in the future. I have had investors I have personally worked with as a broker in the past, call me to enquire on properties which are giving an 8-10% rental yield. This interest is highly encouraging and shows the confidence there is in the Dubai property market,” he added.
The brokerage reports a 27% increase in mortgage buyers in Q3 of 2019 compared to Q3 of 2018 with buyer registration rising by 21% within the same time frame despite the high up-front fees of purchasing a property in the city.
Allsopp explains, “Buyers are taking advantage of the market prices and are deciding to take the leap onto the property ladder. From our survey of buyers, 43% were purchasing property for the first time in Dubai. Buyer confidence has been growing consistently and we have seen a rise in buyer registration quarter on quarter. Families are settling here in the UAE and are looking at Dubai with more longevity.”
The average sales price of properties sold by Allsopp & Allsopp in Q3 of 2019 compared to Q3 of 2018 has decreased by only 1%.
The company reports a rise in secondary market sales of 36%, however, has seen a decrease in off-plan sales by 67%
Allsopp & Allsopp have recorded a decrease in the average rental price of 10% in Q3 of 2019 compared to Q3 of 2018 and tenant registration remains the same.
A continuing trend of the real estate company reports is the increase in tenants paying their rent in three or more cheques and a decrease in tenants paying with only one cheque. In Q3 2019, tenants paying with multiple rental cheques increased by 24% and one cheque payments reduced by 7%.
Sharjah and Ajman
Overall prices continue to show moderate decreases with certain areas such as Ajman Downtown and Muwaileh showing promising signs of stability. Popular areas such as Al Majaz, Al Khan, Corniche Ajman and Emirates City are seeing a marginal increase in rent, indicating a rising demand for both luxury waterfront communities and those with easy access to Dubai.
In the third quarter of 2019, the sales and rental prices for apartments in Sharjah have followed the trends seen in the first half of the year. Prices remain affordable for both tenants and home buyers looking at flats in Sharjah’s popular neighbourhoods.
For the rental market, family-friendly neighbourhoods such as Al Nahda and Al Qasimia experienced decreases between 3 – 8%. However, rents in popular investment zones such as Al Khan, Al Majaz and Al Mamzar, have experienced increases between 5 – 8%, which can be attributed to their increased demand, allowing landlords to negotiate better rents.
For apartment sales, the average price per square foot in the popular neighbourhoods witnessed declines ranging from 8-12%.
In terms of popularity, Al Majaz is the preferred area for both buying and renting apartments in Sharjah. Al Majaz also offers investors a good ROI of 7.7%. For villas in Sharjah, the area of Hoshi received the most number of searches from investors and Al Azra is now the most popular choice for renters. Investors looking for good rental yield for villas should note that Barashi offers an average ROI of 6.7%.
In Ajman, prices for apartments echo a similar trend to what was seen in Sharjah. For rental apartments, declines have been within 1 – 5%. The only noticeable drop has been for 2-bedroom apartments in Al Sawan, where rents went from Dh38k in Q2 2019 to Dh36k.
As for apartment sales, the price per square foot for the most popular areas have experienced marginal decreases within the 1 – 6% range. The only notable changes are an 8.26% increase in the average price per square foot in Al Nuaimiya, where prices increased from Dh218 to Dh236 this quarter. This neighbourhood has been consistently popular with investors because of its high demand with tenants, making it a good option for those looking at healthy rental returns. On average investors can expect a rental yield of up to 10% with their properties in Al Nuaimiya, which is one of the highest in the country.
In Q3 2019, Al Nuaimiya was also the most popular area with tenants looking at apartments in Ajman, whereas Ajman Downtown is the favoured choice for buyers/investors. Al Mowaihat remains the favoured choice for buying villas in Ajman while tenants are most interested in the rental villas in Al Rawda.
In terms of ROI, Al Nuaimiya and Emirates City deliver healthy rental yields at the 10% mark. If you are looking for a good ROI on villas, Al Zahia offers an average rental yield of 9.5%.
Read the full Q3 2019 Ajman market report for more information.
Bayut’s CEO Haider Ali Khan commented on the trends and said: “The property market in both Sharjah and Ajman remain healthy and attractive for buyers and tenants, echoing the trend we have observed over the course of the year.”
“Property prices in both these emirates usually resonate with the trending prices of Dubai; when landlords get creative and offer attractive deals to tenants in Dubai, there is a natural tendency for landlords in Sharjah and Ajman to offer similar incentives, in order to maintain their appeal with potential renters. Buyers/investors can also take advantage of this competitive market and lock in on good prospects at reasonable prices with high rental yields.” Khan concluded.