The properties in Dubai are observed as running low on inventory. This is because the number of buyers is increased in comparison to the number of sellers in the market. This is observed in some popular areas of the emirate.
A lot of studies have been done to figure out the real reason behind the gap. As per a global real estate consultancy—Collier, it is happening due to the consistent rise in the number of buyers in the past years. This is undoubtedly affecting the sellers’ market, too. The first-quarter report of the Collier further states,
“The majority of participants in our survey agreed that currently the quantity of buyers registered outweighs the supply in popular areas within Dubai, as agents informed Colliers they are currently running low on inventory. It is thought that one of the reasons for this is the ‘need to sell’, with owners that had to liquidate their assets having already done so and the remaining owners impartial to sell, but depending on the right price.”
After the Dubai Supreme Committee for Real Estate Planning came into existence in September 2019, the new projects’ launches gradually slowed down. Even though they are supplying many previously launched projects’ new units that are still coming on stream, low property prices, and high-interest rate are attracting many buyers from across the globe to buy the properties in Dubai.
As per Asteco, in 2020, 34,000 apartments and villas were handed over. Furthermore, through a survey, they said,
“What we are increasingly seeing is people prepared to pay more because there is a lack of stock, and properties which are vacant on transfer rather than let are obtaining the largest premiums. This has led to bidding wars, gazumping and constant increasing owner demands. Ninety per cent of participants agreed that the current level of pricing and price increases have far outweighed expectation and some believe this sharp increase and demand is verging into uneasy territory.”
In addition to this, seeing the rising demand for real estate has given confidence to new sellers enter the market. The investors are now considering this as an opportunity to invest in the market. As per a report from an authentic source,
“A staggering 80 per cent of participants also acknowledged that currently, many properties are being sold off market with the risk of advertising a property too high due to the increasing competition between agents trying to obtain inventory.”
It is very important to learn about the facts that who the people are buying the properties in Dubai and why are they interested in buying?
According to the survey by Collier, a 57 per cent increase has been observed in the activities of the investors. Also, a 70 per cent increase has been noticed in foreign investment into the market. Three of the most active investing countries in this are—Chinese, European and Indian. It further said,
“Many believe a key driver to the increase in market activity is the way in which the UAE has handled the global pandemic, this has given people a strong sense of security and remains a key influencer to the decision making process of wanting to buy. It is still agreed that the majority of buyers are financed in some way, with some higher end purchasers also taking a small proportion of finance.”
Moreover, seeing the gap in the payment trend, the tenants are looking forward to investing in properties as the rent/mortgage.
According to Atif Rahman, the director, and partner of Danube Properties, there has had never been the perfect equilibrium of demand and supply in the real estate market of Dubai. To this he added,
“There could be a temporary balance but largely, either the supply or demand would be on the higher side. This is what leads to inflation or deflation in the real estate value. I want to reiterate that the risk of oversupply looms in every market across the globe, however, there will never be oversupply of good properties.”
“In the current situation, we do see a reasonable spike in the demand which will be good enough to consume the current supply of the real estate in the Dubai real estate market.”
According to Khaleej Times
Loading search results