DUBAI 21 February 2021: Buying has never been more affordable with the increase in loan to value (LTV) brought in by the UAE government as part of the stimulus package teamed with the low-interest rates.
Buyers are entering the market in abundance… every week since opening in January and in some cases, these buyers are willing to stretch their budgets higher to be in with a chance of buying a property that ticks all their boxes.
However, the LTV increase and low-interest rates may not be around forever and we can’t be sure that first-time buyers will always be in such a fortunate position to buy. There have been many redundancies across the city and more permanent pay cuts which will lead to fewer buyers in the market and less first-time buyers in a position to step onto the property ladder.
We can see that the average sales price of residential properties increased by 8% when compared to 2019. I put this down to an undersupply in a number of communities across Dubai.
It has been a very uncertain time for many and we have spoken about the intentions of buyers and the incentives available to them. As a result, some sellers are now of the mindset that if they wait to sell, they could achieve a higher sale price in the near future. No one can predict the future, but what we are seeing right now with the slight incline in average sold price is due to the high demand for certain properties within certain communities.
Properties that are well maintained, in a good location and marketed at an attractive price are being snapped up quickly and in some cases, multiple buyers are bidding on the property at the same time which is resulting in the seller receiving a higher amount.
There are sellers selling at a loss to move back to their home country or to buy a larger or smaller property here in Dubai. My advice to these sellers is to speak to a specialist agent who can give a clear indication of the property market in your community. They are on the front line daily and are already working with a number of buyers in the area.
Ultimately a potential lack of buyers going forward could possibly lead to property prices stabalising instead of seeing further rises as we recover from the turbulent year of 2020. So, in my opinion, if you are considering selling your property to upgrade, downgrade or release equity, now is a fantastic time to take advantage of the current market.
For sellers who are not in an urgent need to sell their property should look to speak to a mortgage consultant to see if they are eligible to switch lenders to achieve a better interest rate on their current mortgage. To switch lenders now, the UAE Central Bank removed the 3% exit fee – this is now reduced to 1% of the outstanding mortgage amount or Dh10,000, whichever is less.
Note: The author is CEO of property firm Allsopp & Allsopp.