When it comes to which properties are selling, and which aren’t, in Dubai it all comes down to price.
Current market sentiment is that the real estate sector is in a period of decline and that insufficient buyers exist to meet demand. However, figures from the Dubai Land Department (DLD) tell a slightly different story. This year to date, Dubai Marina has recorded 1,086 sales. For the same period in 2017, 1,245 sales were recorded, a drop of only 14.5 percent.
To understand the market, we should look at what is selling
In 2017, the median price per square foot was AED 1,470. The same period this year records a drop of 12.4 percent to AED 1,308.
2018 has seen the most significant drop in prices since 2013. Anyone that has purchased property from 2013 to date, and is in the market to sell, would be looking to do so at a loss. The result of all this is that the market looks flat.
The key to sales in 2018 has been realistic pricing
There are several overpriced properties being advertised on the market, properties that are near impossible to sell in today’s climate without a price correction. Real estate agents should be advising their clients of the current selling prices, and if the seller cannot accept this reality they should be advised to hold until the market turns around.
The reality is certain agents simply seek properties to list, in the hopes that they may sell. In some instances, correct advice is not offered, or they let the clients advise them. A real estate agent’s job is to know the market and guide clients based on true selling prices, not advertised prices. The 1,086 properties that have sold in Dubai Marina so far this year are properties that were priced for today’s market. These properties offer sellers and buyers a good opportunity and maintain the integrity of the market.
Sellers who purchased their properties off-plan between 2006 and 2007 at low prices have enjoyed many years of strong rental returns, and in today’s market the sales price they will achieve is still more than what they paid for their investment.
The answer to the question ‘what is selling and why?’ is simple, the properties selling are those which were bought for less than current prices. These sellers also have a realistic understanding of today’s market and are not aiming for the unattainable.
Choosing the correct real estate agent is fundamental to selling
Choosing an agent that will act as a trusted advisor, providing correct market information and managing expectations, not simply telling you what you want to hear, is essential.
Contrary to the trend in Dubai, it is not good practice to list your property for sale with several agents
Doing this adds to the appearance of oversupply and can potentially convey a sense of urgency on the seller’s behalf and work against you by achieving a lower price. If I saw a property advertised with multiple agents, I would presume they are in desperate need to sell. Stick to one agent on an exclusive basis. Commitment is a two-way thing and agents will work harder if they have your property exclusively.
Good real estate agents will have a solid network of other agents in other companies that can help them sell your property. So, being exclusive doesn’t necessarily mean an agent will only sell directly. Agents communicate to their network on your behalf, with the end goal of achieving the sale.
It also important that your agent is a specialist in your specific area
If you are selling in Dubai Marina, choose a Marina specialist. Likewise, if you are selling in Downtown, choose a Downtown specialist. We can’t specialise in Dubai as a whole!
Ensure your agent knows everything about your property and location before proceeding with them. If they are specialists their network will be extensive in that area and your property will move fast.
In summary, the market is selling at correct prices. The problem, however, is artificially priced listings
If you purchased above current prices and don’t need to sell, then don’t. Sell if the price is right for you. If you want to hold until a potential market shift, enjoy rental income on your property until the time is right.
Only you truly know your circumstances. Your agent should be unbiased, and not push you to sell or accept low offers. If unsure, always ask your agent to back up the source of their information. Agents have access to a plethora of data and sales transactions.
Know the correct value of your property, choose an area specialist to help you – and work with them exclusively.
By Mark Tolland, Managing Director, Adobe Property