Distress sales plague Dubai property market

Owners are listing residential properties at a 10 to 15 percent discount on the current market price as they seek to liquidate their assets to tide over the crisis. Thiss can also result in a “buying boom” in the UAE once the coronavirus crisis has been brought to a close.

Most owners who had invested in multiple properties and had already been holding for a long time in the hopes of selling during better market conditions, but the effects of the outbreak soon proved to be far worse than anticipated. With every business affected, sellers who cannot hold anymore or have insufficient cash flow to meet their household expenses and mortgages are putting up their properties for sale.

“Since the COVID-19 outbreak in Dubai, There has been a sudden disruption to the property market. We have seen a few distress deals in the past few weeks. Landlords who had listed their properties to sell for the past few months have willingly taken greater reductions in price to sell seeing this global crisis unfold,” said Farooq Syed, CEO, Springfield Real Estate.

High end properties are being offloaded more in distress sales in Dubai. Brokerages are reporting more distress sales of villas/townhouses with two bedrooms and above. However, end-users and families who occupy villas and townhouses will not sell in the short term due to the coronavirus outbreak.

Kunal Puri, founder and CEO, La Capitale Real Estate said, “Big properties not only require higher capital towards down payment but also generate less returns as compared to small properties.”