Smaller Properties Surprising the Business Gurus

The government data has revealed that Dubai has seen a drop of about 44.8% in the buying trend of average size homes and apartments during the first half of the year 2012. According to the stats released by this report, there was a 24.5% increase in the number of transactions as compared to the first half of 2011 but the size and value of property has shrunk that is surprisingly inversely proportional to the increase in transactions.

The data collected by Dubai Land Department indicates that although the number of transactions has increased by 24.5% yet the average size of property bought in the first half o this year was around a hundred and a half sq m less, 139 to be exact. The property prices also saw a downward trend as the sale prices of the properties dropped 23% comparing to the same period of the previous year. It was 2.8m AED in 2011 while it is AED 21.4m this year which is quite a worrisome figure for the Dubai administration.

Mr. Mario Volpi of Cluttons opines that the fall in prices might be de to the shrinkage in the size of the property as more and more people are asking now for smaller 1 or 2 bedroom units while the demand for 3 to 4 bedrooms apartment is falling down. Mortgage transactions have also dropped dramatically and there has been a decline of 23% in the mortgage transactions and the reason can very well be the people’s priority to buy with the cash instead of mortgaging.

He, however, was hopeful about the future of mortgaging in the country as he believed that the scores of mortgaging schemes that the banks are offering to the customers these days in order to alluring them into this business, and this will certainly boost mortgaging in the country. Mr. Volpi is the head of leasing and sales department for residential property of UAE at Cluttons.

Mr. Matthew Green opines that the realty market will show a positive trend throughout the year in the residential sector but the volumes of transactions, as stated above, would continue to remain low comparing it to the first six months of the year. He said that on the grounds that during Ramadan especially and throughout the summer, the prices remain almost the same. Mr. Matthew Green heads the department of research and consultancy at the CBRE.