Whilst confidence has been boosted by the number of new developments being launched, along with previously halted projects recommencing work, the rise in prices has resulted in fewer sales transactions in Q2 and diverted potential first time home buyers to shift their immediate attention to continuing to rent (recognized by the much higher rate of rental transactions in the last quarter); whilst others are taking more time to make decisions on when and where they should invest. This market movement has of course also been caused by the increased transfer rates and the reduced borrowing amounts (75% being maximum LTV) offered by the mortgage providers which has been recognized across the media platforms.
Many of the transactions witnessed by
MPS has seen specific interest in apartments between AED 600,000 to AED 1.5m and then between AED 3.5m and AED 5m, in the villa communities.
A shift to the suburbs of
Off Plan projects have seen fewer launches over the past quarter which has been considered a positive by the Developers and by the MENA Advisory team, with the obvious concern being an oversupply of product in a very short period of time. MENA anticipates several projects to be launched during City Scape, however, believes the focus should be on affordable housing for the end user market who are keen to invest in real estate for their security for the future.
MPS believes the overall market movements in Q2 are healthy for the market as they create a pricing equilibrium across the
While these factors are noteworthy in gauging the current market performance, there are some simple steps that investors and end users should consider in order to maximize their earnings.
Those looking to sell should consider this as the right time to open negotiations; however, this is as an option if you have alternative investment opportunities that you can benefit from by cashing in today. With the average ROI on a property in
Landlords wishing to rent should also consider opening negotiations. Cost incurred whilst owning a vacant unit escalate due to loss of rent and payment of service/management fees. Maintaining properties whilst vacant will also result in additional utilities charges in order to avoid any damage to the property caused by heat and humidity during the summer peak season. Accumulated losses on a monthly basis can compensate any considerations of a higher rent demand.
Overall, buyers, investors and tenants should familiarise themselves with the market prior to making an investment. An individual valuation of investment should take into consideration location, upcoming developments, pre and post 2008 prices (allowing one to ascertain potential peaks), and of course ROI's. In case of a tenant wishing to purchase, fear of any losses should be voided by factoring rent paid vs potential slowdown in market at time of selling (if any). Those wishing to rent need to compromise where necessary whether related to location or preferred choice of building. Commuting in
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