Industry data reveals that as a result of lack of capital and widespread project delays, the market has witnessed a rise in distress sales of residential property in Dubai amidst a skyrocketing real estate market.
"Not only has the volume [of distress sales] been increasing but I think the level of urgency has been increasing," said Heather Wipperman, chief executive of property investor Investment Boutique, according to Khaleej Times.
"It is difficult to give percentages of housing stock falling into low premiums [zero to two per cent], but the numbers are rising. A lot of people offering low premiums are also willing to negotiate down. You have people coming and saying zero per cent premium and I will absorb the transfer fees," she added.
Those behind the sales are generally expatriates or single investors owning low-rise apartment blocks. Such investors are believed to have planned to purchase property at low prices and reap the benefits of the emirate's property boom, selling at higher prices. However, mismanagement of cash flows resulting in late or missed payments has led some to reconsider their investments and recover their initial capital outlay.
Wipperman also pointed out that sales of properties at zero premium had risen in the past year but were mostly restricted to small luxury apartment portfolios and low-rise residential blocks.