Dubai property prices rise 30%
News Article Date: Thursday 22nd of October 2009
Property owners in Dubai have been increasing the asking price for their properties in the past two months and some areas have witnessed appreciation of 20 to 30 per cent in the past few weeks.
Heightened end-user interest has seen prices in some areas of Dubai at their highest since they bottomed out earlier this year. Prices in the Burj Dubai area, Dubai Marina and The Greens have been edging up on a weekly basis.
"The number of enquiries has certainly gone up, with a lot more people viewing ready properties now," the managing director of a Dubai-based real estate agency told Emirates Business.
"There is an improvement from mere phone enquiries to actual apartment visits," he said. This, perhaps, has acted as a catalyst to boost owner confidence that has led to higher asking prices.
The panic at the end of 2008 and early 2009 seems to have subsided even though the number of transactions are still low. A growing number of buyers now believe the property market has bottomed out. Rising prices have caught off-guard potential buyers who were waiting for further price declines.
"Cash buyers are being preferred by sellers to offload their properties," said the head of the real estate agency. Cash buyers are, therefore, in a position to seek lower than market prices, especially for properties not listed with banks and mortgage providers.
However, while the increases have happened across most areas, there is a wide – and growing – gap in prices. Proximity to a Dubai Metro station, the quality of finish, and service charges top the list of buyers' priorities.
At the same time, certain developments and buildings remain underpriced in relation to their neighbours due to lack of financing.
Moreover, properties that are due for delivery in the next couple of months – in Executive Towers, for instance – are also witnessing heightened activity. Buyers who cannot afford the 30 to 70 per cent final developer payment – that becomes due when a building is delivered – are desperately seeking to offload their assets at lower-than-market prices.