End user home buyers flooding real estate market
Young professionals and families looking to buy a home to live in are increasingly showing their interest in Dubai’s slowly recovering real estate market, experts said at the 2020 Cityscape Real Estate Summit.
Cityscape’s Real Estate Summit opened its doors on Monday, with Mattar Mohammed Al Tayer, director general and chairman of the board of executive directors of the Roads and Transport Authority, inaugurating the one-off edition of the annual event. Organised by Informa Markets, in partnership with the Dubai Land Department, the two-day event is taking place at the Dubai World Trade Centre.
Al Tayer was joined in the special opening ceremony and tour by Helal Saeed Al Marri, director general of Dubai Department of Tourism and Commerce Marketing; Peter Hall, president EMEA, Informa Markets; and Chris Speller, group director, Cityscape, Informa Markets.
“The real estate sector is vital for the growth of the national economy and it actively contributes to the prosperity of Dubai; it is fundamental to the urban expansion and development of the city,” Al Tayer said. “The Government of Dubai strives to provide the necessary support for this sector in a way that effectively contributes to its enhanced performance and continuing success.”
Al Marri also put a spotlight on real estate and the tourism sector, as well as Dubai’s strategy in adapting its tourism strategies for a post-pandemic world. “We have seen a very large interest in the new visa programs – with tens of thousands registering interest – and this is due in part to the attractive environment of living in Dubai. And now with the two-month travel visa, we’ve seen an influx of interest with a tremendous demand from the United Kingdom and the United States. This will have a positive impact not only for the tourism sector but also for real estate.”
Farhad Azizi, CEO of Azizi Developments, noted that the Covid-19 pandemic had proven to be a challenging time for developers, but that recovery was already on the cards. “We went from selling 15 to 20 units a day to selling just one in a week; however, August, surprisingly proved to be one of our best months this year, where we logged in sales that were almost at our per-Covid-19 levels. Buyers from all over the world have expressed their interest in owning a home in Dubai because they believe in the market and are confident in the support that they are getting from banks right now. We are looking forward to a very positive 2021, where we will be launching several new projects.”
Azizi noted that most of the interest came from end users that were looking to buy a home to live in. “Residents that are paying rent are now looking to own their homes. Not only that, but many people are uncertain about investing in stocks because of the market situation, so for them a home is a wise investment and security in an uncertain time.”
Similarly, Lewis Allsopp, CEO of Allsopp & Allsopp, said that with the lockdown shutting down the real estate market in Dubai and other cities globally, a lot of new ways of buying a home came into play. Viewings were a complete no-go area, but with the advances of technology virtual viewings have now become the norm; buyers are expecting to see a property virtually before viewing physically and in some cases, are buying homes off the back of a virtual viewing only and signing contracts online if they are overseas.
“As well as viewings becoming easier, so did the financial aspect of buying a home. The UAE government and the Central Bank of the UAE were quick to initiate a stimulus to the market in the early news of Covid-19 with the increase in The Loan-To-Value (LTV). This stimulus was put in place to alleviate the strain on industry finances in the light of Covid-19 as levels of uncertainty were entering the markets world wide. This government stimulus helped and continues to help ensure the property market stays buoyant and this kind of proactive, speedy leadership is hugely reassuring. The increase in LTV is something that has been long mooted, even before the Covid-19 outbreak, and it now gives buyers who are saving for a deposit a helping hand to make their first UAE property purchase,” he said.
The increase in LTV teamed with low interest rates means that first-time buyers can now buy a property with an 85 per cent mortgage for Emiratis and 80 per cent mortgage for expats. “So, instead of putting down a deposit and fees of 33 per cent of the property value, first-time buyers can put down 22 per cent. This initiative really helps with people that were looking between the difference of affording a place to live and the home they truly desire. Many first-time buyers who had been looking to rent have reached out to brokers to enquire about a mortgage. The pandemic has made people think about their future and has inclined them to look into their options and ask questions which are leading to buyer education and more property sales,” Allsopp said.
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