Did you overpay on your property and how do you find out?


Hi Everyone and welcome to a new episode of straight talk with your host Firas Al Msaddi. This time I am addressing real estate investors who got into the real estate market in the past 5 to 6 years knowing that we have been witnessing price softening in Dubai by an average of 2 to 6% depending on the project you have invested in. In a sense, I want to help real estate investors understand how well their real estate investment is performing in the light of today’s real estate market.

So it is very simple,  you need to benchmark the price trend of your particular unit and property versus the price trend of the overall real estate market, the price trend of the master community you invested in and the price trend of the actual project you invested in, stay with me.

Of course, you need to get this information from the most credible source which is the Government of Dubai, the Dubai Land Department, you need to look at the sales transactions in Dubai, in the master community of your interest as well as in your project in the past 5 or 6 years I mean whenever you entered the market. To do this you can log into www.property-trends.com or you can even access the same exact data by downloading FAM Properties mobile application on your iPhone or Android device.

So basically when you visit the website, you will have to go click on “sold properties” which will take you to this search box where you enter the name of your project – I would prefer to focus on apartments not on plots or villas because the way the land department registers plots or villa transactions varies from one community to another.

So you enter the project of interest, the name of the project, you choose an apartment, then choose sales or mortgage, or only mortgage because I think in terms of price to really understand the price trend you have to enter sales which is basically the cash transactions that will not include any mortgage transactions.

Now once you do this and enter the date basically “from” – “to”, this will give you two things. Number 1 it will give you a list of every single sales transaction that took place in the Dubai Land Department, in your project. You can do this at the project level, at Dubai Real Estate level, as well as the master community level. It will also give you a simple graph that will save your time where you don’t have to look at every single transaction unless you have the interest to dig deeper and to do more findings.

So basically your walk away or take away from this is: If you invested in a project where you see that the value of this project went down by, for example, 10% and your agent is telling you to sell your property at a negative 20% from your original price, that means one of the two things: 1) You are either selling at an underpriced value, or 2) you actually purchased your property at an overpriced value. So basically if the developer is telling you the market went down by 30% that is why you lost 30%, you need to go and follow the process I just shared with you now. If you see that the market only went down by 10% or the actual value in the master community of some projects went up by 5 or 10% such as the case of Blue Water islands for example for the prime units there, the market went up in the past couple of years for even 20% for some selective prime units. So if your real estate agent or your real estate developer is telling you that you lost because the entire market lost, you must follow this process in order to understand whether you bought an overly-priced unit from the developer or even from the secondary market, or if you actually made a well-educated decision. That will really allow you to plan your exit knowing exactly how much your property is valued at today; by looking at the last 5 or 10 sales transactions in the same project. And that will really enlighten your decision-making process.

So I hope that you found this beneficial, there is only so much that I can say in this quick video. But if you have any questions on how to run this exercise it is very simple; drop me a comment or email me at [email protected] and I will address your emails and questions personally.

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