Dubai, UAE –A recent report from Reidin-GCP highlights a significant narrowing of the gap between asking prices and sale prices in the resale market of luxury locations such as Palm Jumeirah and mid-priced communities like JVC. This trend is expected to eliminate pricing distortions and inflated asking prices, potentially facilitating quicker sales for sellers.
These changes are likely linked to stricter requirements from the Dubai Land Department regarding property transactions. Currently, a property can be marketed and sold through no more than three real estate agencies via online channels. Once the property transaction is completed, all promotional listings must be immediately stopped or removed. This eliminates the previous issue of non-existent listings appearing in searches for residential properties in Dubai, where different agents might list the same property at varying prices.
The gap between asking prices and actual sale prices has now narrowed to approximately AED 200 per square foot, compared to an average of over AED 550 more than a year ago. Similar trends are observed in other areas, with Palm Jumeirah, for example, moving towards a buyer's market after previously experiencing a seller's market for both apartments and villas.
The off-plan market experienced a brief slowdown over the past four months but saw improvement after the rain on April 16. Over the past two weeks, off-plan sales have returned to normal, with developers hoping to capitalize on this momentum before the expected seasonal demand slowdown in summer.
Resale market sellers must contend with the competitive pricing of the off-plan market, contributing to the stabilization of transaction prices in the resale market. The disparity between market supply and sales of ready and off-plan properties drives realistic pricing, with off-plan sales currently outpacing ready property sales by a factor of two.
Additionally, mortgage factors play a role—sellers preparing to list properties must offer more practical price options to increase the chances of buyers securing mortgages. Mortgage lenders' valuations have also become increasingly stringent, further promoting realistic pricing.
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