Dubai: From the last 5 years activities one gets to know that buyers are more interested in picking up the plan of buying a ready-made home rather than waiting for about two or more years for an offpan work to be delivered.
This is calculated by the numbers which show the change as there was about an increase of about 7 percent in home purchases which were made in the secondary market during 2020, whereas the offplan sales graph went down to 32 percent. This is despite the fact that the developers are backing their offplan sales with three-to-five-year payment plans(or can be longer with the increasing number of instances), a freeze on the service charges, and also the usual waiver of registration fees at the Land Development. Some developers are even trying to go the extra mile by doing away with even the down payment.
Despite these efforts by developers, it is for sure that it’s time for ready homes and also for the secondary market. Many are convincingly doing that they will get a better bargain from an investor who wants to offload in the secondary market rather than from a developer. But the sale price and ready handover are the main concern these days…
“After the initial slump in transaction activity in April and May 2020 due to movement restrictions, secondary market monthly volumes have steadily risen since June, with December witnessing the highest monthly volumes in two years,” says the new report from Core, the property consultancy. “We expect this momentum to continue over Q1-2021 as the market is proving to have a sustained demand for secondary market units driven by end-user demand.”
Best bargain spots
If you prefer to buy an apartment, try checking out some of the secondary market buying options at JLT(Jumeirah Lake Towers), as the prices here are down by more than 40 percent from their mid-2014 peak. And the one-bedroom unit is being cost from Hh650,000 onwards. And if you prefer to get for less than this cost also, then head over to Discovery Gardens, as the units are now pricing from about Dh400,000.
Lower down payments
So It was last in March that the UAE changed its lending guidelines for the homebuyers who are buying for the first time, under this ex-pats could take off about 80 percent of the property value as a loan. Which used to be 75% before this change. And in the future, the data from the Central Bank will give some more information into whether this move paid off and whether banks have consciously turned more generous with their home buying portfolios.
Prices won’t rise… soon
In the year 2020, Core reckons around 36,000 new homes were delivered in Dubailand, along with the Town Square( here a one-bedroom is costing for about Dh500,000 plus), Mudon(the cost of three-bedroom townhouses here are from Dh1.4 million), and Damac’s Akoya Oxygen which is reporting with the highest number of handovers.
The Report says “With many major developers to curb supply, we expect a slowdown in 2021 handovers with nominal new project launches,” adding. “We conservatively forecast nearly 39,000 units for 2021; however, further revisions are expected on supply forecasts as they will inherently depend on buyer confidence and an uptick in market sentiment as developers continue to adjust to ongoing market conditions.”
Even though it is about to be completed in 2021 which comes in at a number of about 25,000-30,000 mark, this is still quite a bit for the market to absorb this number. Or it can be explained as the chances of sudden price rises are remote. This too should help the purchasers-and sellers-in the secondary market. And this potentially adds up to the worries of the developers who want to offload their offplan units.
They could even drop
Some industry experts also predict that in the future there will be a decline of around 8-10 percent, in the property price of Dubai. The head of a brokerage firm said “At the first signs of job stability in the wider economy, more end-users could enter the property market. There are more 30-year old residents wanting to make their first home purchase in Dubai than back in their home country.”
“Developers should not miss this opportunity to widen their user base. They cannot keep hoping to sell off their newly built homes to overseas investors.”
