Competition from an influx of off-plan developments has seen a reduction in property sales prices for investors. Investors are advised to delay sales of their assets while the market continues to improve ahead of Expo 2020.
- Dubai property market continues to generate high rental yields for investors but reduced sales prices.
- As a result of strong competition from off-plan developments, Dubai property investors looking to sell their assets are being met with offers significantly lower than their asking price
- Investors should look to retain their properties for the next few years ahead of Expo 2020 and the subsequent forecasted market growth
Amid signs of a market recovery, Dubai property investors should look to retain their assets for the foreseeable future.
While Dubai property continues to generate high rental yields, an influx of competitively priced off-plan developments has resulted in many investors looking to sell their properties being met with offers significantly lower than their asking price, even in established locations such as Dubai Marina and Jumeirah Lake Towers (JLT).
“For every individual investor trying to offload a property, there is a master-developer with a highly attractive competitive price offer targeting the same buyer,” said an industry source.
“In these circumstances, the master-developer gets to win all the time. Only existing trophy properties are still able to command a premium when being sold in the secondary market — nothing else.”
For those investors seeking a sale, at a decent exit price, the window of opportunity is narrowing. Buyers looking to sell property bought three years ago, when sale values were at their peak, now find themselves in a precarious situation, as do those who acquired units in 2007-08.
Government spending in preparation of Expo 2020 is expected to boost Dubai’s property market in the coming years, providing positive sentiment to investors. As a result, investors looking to reap the best return-on-investment in regards to capital appreciation should delay sales of their property while the market continues to improve.