Cluttons Middle East – DUBAI PROPERTY MARKET PRESENTS BUYERS WITH THE UPPER HAND
5 July 2010 - Cluttons, the real estate specialist that has enjoyed a dedicated presence in the Middle East since 1976 today issues its market report for Q2 2010. The findings of the report support the belief that Dubai currently represents a buyer’s market, offering softer prices that allow potential property purchasers a strong negotiating position across all sectors. This favourable position for buyers is increasing demand and creating selected pockets of growth despite a general slide in prices.
In the residential market, buyers are able to negotiate with greater effect and all properties are under pressure to sell at competitive prices, often well below asking price. Deflated prices are driving demand by discerning buyers, with interest directed at those ‘preferred properties’ that offer value for money, clear lifestyle amenities and desirable extras such as views or green space. In a similar vein, villas are holding their value better than apartments as consumers look to upgrade their living environment over the summer.
The commercial sector is also skewed towards the occupier, with oversupply allowing cost conscious tenants to migrate to offices offering lower rents in competing buildings. This is an ideal time for businesses looking to upgrade or downscale their existing office space within Dubai. The areas that are holding their value best continue to be the DIFC and Downtown’s Emaar Business Square, but even these are under increased pressure from other office zones such as Deira and Bur Dubai.
The industrial and logistics sector follows this trend, with landlords now taking the decision to offer long-lease agreements, a new step for the Emirate. This move demonstrates increasing maturity in the market, and will offer increased benefits to tenants, who are able to dictate their needs during the negotiation process. The best performing Industrial area in Dubai is the JAFZA, and in particular JAFZA North, an area that offers premium warehousing in terms of price and Free Zone status.
Steve Morgan, Head of Cluttons UAE, comments:
”Ongoing price reductions have opened up the Dubai property market for a wider selection of potential purchasers, who are becoming increasingly discerning in their property search. Whereas once the landlord or seller held a strong position, we now see buyers negotiating with landlords to bring prices well below the asking price.
Equally, pressure from occupiers in the commercial and logistics sectors, has meant that landlords have had to increase lease length, which we feel to be a positive step for the market. The continuing deflation of prices, whilst painful in the short term is setting Dubai up well in the Global arena to benefit from expansion of existing and relocation of new business into the city as the Global economies start to recover”.
