Data released by an early 2015 report revealed that the Dubai residential market has experienced a bit of a slowdown in sales deals, mainly due to overly positive expectations by not only buyers but sellers as well.
The report indicated that just over 50% sellers had expectations which were above the realistic and achievable market price. Around 55% buyers had expectations which were below the achievable (and realistic) market price. On top of this, stiffer legislation and property laws are also responsible for the slowdown in Dubai property for sale and rent.
An industry insider also observed how a major cause of this is sellers not having any problems whatsoever leaving their property vacant for months while losing money in the process, as they have not been offered the price they deem acceptable. There are also sellers who quite simply consider this a matter of pride.
This is not to say deals are scarce in the market. The best Dubai brokers are educating their customers on the current real estate scene and seamlessly getting their transactions processed while arming them with tools like a Dubai mortgage calculator or a property transaction calculator.
Unfortunately, many sellers find themselves in sticky spots while relying on mixed messages alone in the property market or hiring a real estate agent where the trust level is generally low.
How do You Know You’re Getting the Right Market Rate?
To begin with, it’s always a good idea to get a Comparative Market Analysis (CMA) from a highly skilled and professional Dubai real estate agent.
In order to have all your bases covered, you need to be proactive and do some more research to determine the average asking price and average transaction price of Dubai property for sale. In addition take the following into account:
Compare asking prices in the market
Asking prices can be quite easily found on a well-established Dubai real estate network where current asking prices in the market or an area price index are listed. You get everything related to any given piece of property like price per sq. ft, number of units, average sizes, number of bedrooms, vicinity etc. Keep in mind asking prices pertain to units which have yet to be sold, so these can be sometimes economically priced to begin with.
Also remember, you need to be highly specific when we’re talking size – larger units command a lower price per sq. ft. therefore, multiple unit sizes might give you misleading or confusing asking prices.
Compare market transaction prices
It can be tough to determine transaction prices properly since there is somewhat of a lag between deals getting closed and being registered at the land departments. Therefore, transactions do not necessarily give a solid indication of market conditions, especially considering the amount of paperwork involved. For all you know, the actual transaction could have been made several months back.
Your best bet is to avoid hearsay and find a RERA-registered real estate agent who can responsibly take care of all your paperwork while providing highly accurate market transaction prices. Input from friends, family or business acquaintances might prove useful somewhere down the line; however, an educated and calculated decision is best made when you have concrete and up-to-date info coming from a real estate professional.
To make sure you don’t end up with just any random Dubai agent, ask them to provide:
- Their RERA broker bumber
- Details on the last completed RERA exam
- The number of years they’ve worked as a Dubai broker
- Details on the latest transaction they did
- Number of clients or clientele
- Number of current listings under their umbrella
- Current asking price in the listed areas
- Meaningful info on the kind of offers you can expect based on the given market rate
If you come across an agent who promises a price that is above the market rate, they may not be able to deliver the goods and just trying to win your trust.
It also makes sense to have all your Dubai property transactions done through one agent. Avoid listing your unit through more than one agent as it can create “noise” in the market and may give buyers a certain sense of abundance. You will not get a better price, but in fact, less offers.
Also, under any circumstances, you should never rely on a broker who is not RERA-certified or tells you that he/she does this kind of work on a “freelance basis”. A top-notch agent has a RERA license and also part of a registered network of real estate companies who have a reputation in the market for living up to commitments.
An experienced and certified broker will answer all your questions to the best of their knowledge and see to it that you’re getting the right market rate for your property, without overpromising or under-delivering on commitments.