Demand strong for properties in UAE below Dh4 million

DUBAI: Properties under Dh4 million are in heavy demand among buyers in Dubai, says a local real estate brokerage. There are multiple offers from sellers for such properties owing to easier mortgage requirements.

For instance, Allsopp & Allsopp sold 83 per cent of all properties listed for under Dh4 million in the second quarter of 2016. Allsopp & Allsopp CEO Lewis Allsopp said: "On the ground, we're seeing a shift in the market. Demand from buyers is 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.

"This is the first time in the last two years owners are increasing the asking price and receiving it. We're starting to see bidding wars, with multiple buyers putting offers in - and it's all in the under Dh4 million segment.

"We're 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." Under the mortgage cap, properties above Dh5 million require a higher deposit of 35 per cent.

"More buyers are opting to mortgage their properties. With the cap, we have found the appetite to buy properties above that price band deteriorate, which has resulted in the higher end of the market suffering in terms of pricing."

Allsopp & Allsopp's figures show only 13 per cent of sales over Q2 were above Dh5 million. "While the figures don't read well for owners of properties over Dh5 million in terms of buyer activity, should the mortgage cap regulations be eased, with buyers being allowed to put less of a deposit down [currently 65 per cent loan to value], we would see more traction." Highlighting the strength of the sub-Dh4 million category, Allsopp points to Jumeirah Golf Estates where the latest phase sold out over one weekend.

"These aren't investors buying off-plan, these are regular people looking for family homes to live in. As developments come close to handover, the stock increases and we're seeing huge demand from the retail market looking to purchase family homes. "One major development in Jumeirah Village Triangle has sold the majority of its properties in the last two months as it comes close to handover. Another in Sports City has been on the market for years but as it nears handover, it's getting hot again. "Essentially, if you have a property close to handover, there's a definite market out there of ready and willing buyers."