The effect of Iran war and geopolitical tension is now visible on the shining skyscrapers of Dubai. There is a lot of turmoil in the property market of the Gulf country these days. The real estate market which was running at rocket speed for the last few years is now going through a phase of slowdown. The situation is such that to attract buyers, builders are offering huge discounts and even free luxury cars.
Dubai’s entry-level property market has declined by 40% in the last one year. Especially the demand for houses priced between 10 lakh to 25 lakh dirhams (AED) has been affected the most. In this segment, people are sitting at the table and bargaining for 10 to 15 percent. Same is the situation in the secondary market, where buyers are demanding huge discounts before investing money.
If we look at the figures, the property registration numbers may look good in the month of March, but brokers say that this is only the result of stalled deals from December to February. In fact, there has been a huge decline of up to 50% in March sales. Usually the market remains quiet during the month of Ramadan, so now everyone’s eyes are fixed on April. If the war situation remains normal, then recovery in the market can be expected.
Builders are giving free luxury cars
To deal with this slowdown in the market, big developers have chosen the path of attractive offers instead of directly cutting prices. A big company like DAMAC has changed its payment plan from 70/30 to 50/50. Not only this, he himself is paying the 4% registration fee of Dubai Land Department (DLD). To woo customers, they are offering free expensive cars like Nissan Pathfinder for properties above 15 lakh dirhams and Nissan Patrol Nismo for properties above 50 lakh dirhams. Binghatti and Danube have also given great relief to buyers in their payment plans. Those who pay the entire amount in cash are being given a huge discount of up to 20%. Azizi has changed the payment plan to 30/70, which has reduced the pressure on buyers to pay the large amount immediately.
The coming 6-9 months will be very important
Shivendra Singh, CEO of Nestrov Consulting, believes that despite the tension, deals in Dubai and Abu Dhabi have not stopped completely, only their pace has slowed down compared to last year. At the same time, Dubai real estate expert Aditya Ernest John estimates that the next six to nine months will be a period of correction (improvement in prices) for the market. He says that in the coming time, there may be a huge fall of 15 to 18 percent in the prices in the secondary market (especially the projects which are about to be completed). Apart from this, a decline of 9 to 12 percent may be seen in the primary or off-plan market. According to experts, the next two years are likely to be a period of stability rather than aggressive growth in the market.