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Real Estate Market Dynamics: Pricing Changes and Transaction Challenges in the Second Half of 2024
Jul 9, 2024
by Internet
Abstract : In the current real estate market, both off-plan and ready properties in Dubai are experiencing dynamic pricing environments. These changes profoundly impact the decision-making processes of developers and buyers during the latter half of 2024.

Amidst a bustling market backdrop, assessing property values has become exceptionally complex. Buyers and developers must consider numerous factors such as location, property size and layout, proximity to natural surroundings, and the level of finishing. Particularly in a rapidly advancing market, price fluctuations and variations add to the challenge of valuation.

In contrast, many buyers opt for older properties where pricing tends to be more stable, albeit requiring extensive renovation and updates. However, with increased activity in the off-plan market, more buyers are turning to new developments, further driving the trend of off-plan sales growth. Whether opting for off-plan or ready properties, considerations regarding mortgage financing are crucial. Despite increased market activity, the rising monthly repayment amounts due to property prices surpassing their "reset values" remain a critical concern for buyers.


The current rise in inflation rates also impacts the market significantly. When inflation rates exceed 4-5%, property prices may appear cheaper, but in reality, they do not decrease significantly. Sellers tend to maintain stable prices, yet inflation gradually erodes the actual value of properties. Additionally, broker commission rates as high as 10-12% increase buyers' purchasing costs, often resulting in actual transaction prices lower than market listings.

In the luxury housing market, while overall transaction volumes have slowed, a few prominent transactions still capture attention. However, most buyers continue to face challenges with repayment post-purchase, indicating not the end of market activity but rather a dynamic adjustment phase.

Historically, the real estate market has undergone several cycles of boom and bust. The current market uncertainty may evoke both panic and excitement among market participants. For investors, understanding these market constraints, changes, and the long-term impact of demographic shifts on real estate demand is crucial.

Against the backdrop of market fluctuations and wealth redistribution, buyers and investors must carefully assess risks and returns to ensure their investments remain resilient amidst changes.

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