Transition to a Seller’s Market
Dubai’s residential market is undergoing a significant transformation, transitioning into a seller’s market to capitalize on the remarkable gains witnessed over the past three years in property prices.
Signs of Slowdown in Price Rally
Industry experts note that the property price rally is showing signs of a slowdown, with growth reaching a plateau. This trend is prompting some investors to consider selling their properties and reinvesting in new upcoming areas that offer potentially better returns.
Factors Driving the Seller’s Market
Property prices in Dubai have surged, surpassing the 2014 peak last year due to unprecedented demand witnessed in the post-pandemic period. Buyers who purchased properties during the pandemic have seen substantial appreciation in their assets, some by up to 200 percent, leading many to transition into sellers to capitalize on these gains.
Advantageous Position for Sellers
According to a study by Betterhomes, sellers are currently in an advantageous position, benefiting from a surge in property transactions and escalating prices driven by heightened buyer demand.
Louis Harding, managing director at Betterhomes, highlights the benefits for sellers, stating, “One of the key benefits for sellers in this swiftly expanding market is the potential for a lucrative return on investment, with property owners currently enjoying favorable rates.”
Toni Abou Jaoude, sales manager at Betterhomes, emphasizes the motivation for sellers to capitalize on the current market conditions and reinvest their gains into additional properties post-sale.
Top-Performing Areas and Returns
Jaoude reveals that Residential Market property purchased during the pandemic year have experienced significant increases in value, ranging from 50 percent to as high as 200 percent in certain areas. The top-performing areas in terms of returns include downtown, District1 MBR, Jumeirah, Dubai Hills, Palm Jumeirah, and DIFC.
Analysis of Data Trends
Jaoude analyzes data trends, indicating that a seller’s market in Dubai signifies robust demand, limited inventory, and consistent delivery of elevated returns to both investors and end-users.
Headwinds in 2024
Mayed Alrashdi, a research analyst at Emirates NBD, acknowledges Dubai’s resilient property market in 2023 but anticipates headwinds in 2024. These include continued high-interest rates, declining affordability for the average household, and an increase in the supply of new units.
Alrashdi highlights the impact of high-interest rates, noting a 7 percent year-on-year decline in the total value of mortgage transactions in 2023. However, he expects the anticipated increase in supply in 2024 to help stabilize residential real estate prices.
