Dubai property agents say they are beginning to see an uptake in viewings and sales.
Buyers trickle back into property
Property agents in Dubai say viewings and sales of completed property have increased in recent weeks. While most transactions are being completed with cash, banks appear to be regaining their nerve and are starting to approve mortgages. "There weren't viewings for about two months but in the past 10 days, viewings have picked up, so there's a bit of interest coming back to the market," said Ronald Hinchey, a resident partner at Cluttons, a property consultant. "I think banks are possibly getting less nervous." Those now buying plan to live in the property. They are seeking homes they can afford as prices decline, according to Iseeb Rehman, the managing director of Sherwoods Independent Property Consultants. Meanwhile, many owners who never intended to hold the properties until completion are selling as concerns mount that prices could fall further, agents said. Mr Rehman said Sherwoods made about five sales in the past week, with sought-after areas being Dubai Marina, Discovery Gardens and Jumeirah Village. "We have seen activity picking up and people have started to look around a lot more," he said. "We've had some sales, whether it be 'distressed sales' taking place, but activity is definitely looking a lot more positive. The transactions have mainly been for ready properties and cash only." Mr Rehman said there had also been a rise in interest for office space, while more property had come on to the rental market as owners looked for a stable revenue stream. Morgan Stanley said in a report earlier this month that property prices in Dubai had fallen by an average of 25 per cent since their peak in September. The steepest falls have been in key developments such as Emaar's Downtown Burj Dubai and Nakheel's Palms Jumeirah and Jebel Ali. A recent report by Landmark Advisory, a division of the property consultant Landmark Properties, forecasts that apartment prices will fall a further 20 per cent this year, with individual declines ranging between 10 per cent and 50 per cent, depending on the development. Average villa prices are likely to remain stable. The report said that poor quality homes would bear the brunt of the price declines. Other analysts predict price falls of up to 60 per cent this year. According to Rima Moukarim, a property adviser at Choueri Real Estate, owners who may have held on to property in anticipation of a price recovery are now looking for a quick sale. "There is more movement and there are more sales going on," she said. "You may have three agents involved in one sale, but it's still a good sign. Before, people thought prices would go back up again, but they've noticed they are really going down, so have decided to just cash in and go." About Dh2 billion (US$545 million) worth of mortgages have been registered with the Dubai Land Department this year, compared with Dh10bn during the same period last year, according to Mohammed Thani, the department's assistant director general. Still, Ms Moukarim said that banks were growing more confident about lending. "RAK Bank is giving better mortgages now. Mortgage approval is more positive but it is taking time," she said. Mr Hinchey said that as banks resumed lending for property, they were expected to adopt a less stringent approval process. The company's mortgage valuation department is handling between 40 and 50 mortgage applications a month, compared with about 250 during the boom. "Banks came to us and asked us to find them customers," he said. "But when we did they wouldn't lend to them because the customer didn't fit their very strict criteria, but I think that's changing now." Property experts also say the market needs to offer incentives to lure buyers back and instil confidence, such as providing permanent residence visas to freehold homeowners. Last week, The National reported that a federal law granting residency visas to owners of freehold property would be introduced within the year. The proposal will allow owners to obtain a six-month, renewable residency visa. Still, experts believe permanent visas are essential to attract serious, long-term investors. "When people buy freehold property, the Government, not the developer, should give that person permanent residence for the rest of their lives, so long as they own that property," said Mr Hinchey. firstname.lastname@example.org