By Abhishek Jalan, CEO, Grovy Developers
Dubai, UAE
“The real estate market in the UAE has gone through a period of time and has now entered a period of stabilising, and not slowing down. The market has experienced significant fluctuations, and the transition into a stable market will be driven by the strength of the underlying economic conditions and more disciplined pricing.
To be fully aware, there will be a reduction in the amount of primary off-plan resale activity due to a decrease in speculative profits on investment sales. The rental market has also returned to a normal level with rental rates decreasing in established rental locations (up to a reduction of between 5-7%). As a result of this stabilisation, sustainable price levels are being established, resulting in higher long-term rental yield rates on average in select locations (5-7%).
One of the major signs of the real estate market beginning to mature is the narrowing of the gap between the bid and ask price. Bids indicate the buyer’s expectations; the ask indicates the seller’s expectations and the space between the two represents current market conditions. When the market begins to stabilise and the level of volatility decreases, the difference between the bid and ask price will narrow. This indicates that buyers have greater confidence in the price they are willing to pay for a property and therefore they align with the seller’s price.
Looking to the future, the market will continue to see the greatest demand for properties within well-connected communities and from property developers with a proven track record of successful delivery of residential housing within their markets. 2026 will be the year that the qualities of credibility, quality and on-time delivery will be the main driver for property developers’ growth and sustainable long-term opportunities.”
