"Properties can still yield considerable bargains, if sold wisely": Realty agents

Thursday, December 25, 2008

According to real estate agents in Dubai, property can still reap considerable profits. They have warned that owners need to be realistic about the value for which they can sell their homes in the current market condition.

The boom growth during the recent past has now come to an end, and property sellers need to slash prices. Despite this, the agents say that the profit margins are still higher than that in the European and US markets, and in case the sellers reinvest wisely, they will be able to make bargains, and can continue to make money.

Many sellers who have lowered their prices have already seen huge appreciation in the value of their homes and are not much worried about the squeeze on profit margins, the agents said.

For instance, a penthouse at Jumeirah Beach Residence sold after reducing its value from Dh.21m to Dh.14m, and also two luxury villas on The Palm were priced at Dh.13.5mn and Dh.13.7mn, as against the earlier Dh.24mn.

The villas were originally purchased for Dh.5mn to Dh.7mn, which implies that the seller had still made a profit of more than 100 percent, rather than the 300 percent profit, otherwise obtained during the boom time.

The market is very tough and nobody wants to make a loss on property. But still, it is possible to make 100 percent profit, the margin which cannot be obtained in Europe or the US, agents claim.

Investors selling their properties can still consider reinvestment with so many bargains doing rounds, the agents point out.

According to Asteco, Dubai, the recent price correction has only resulted in a more "meaningful" market.

The completed properties were being sold for 15 to 25 percent lesser than that was happening a year ago, when off-plan properties were sold at their original properties. Also several people who have completed their properties have taken the decision of renting them out, rather than selling, due to fall in prices, Asteco said.