Cityscape: Dubai’s Property Market Back On Track - Gulf Business
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Cityscape: Dubai’s Property Market Back On Track

Cityscape: Dubai’s Property Market Back On Track

Ahead of Cityscape, property experts claim the city’s real estate market has recovered this year.

Dubai’s real estate market has been showing strong signs of recovery this year, with prices and rents stabilising.

Apartments in the emirate have increased on average 4.9 per cent in value since the beginning of 2012, according to the latest report issued by Cluttons. “We predict a continuation of this trend towards the end of the year,” the report said.

Meanwhile average sales for high-end villas rose 18 per cent from Dhs1,100 per square foot in January to Dhs1,300 per square foot in September 2012, while mid range villa prices have increased from Dhs550 per square foot to Dhs650 per square foot in the same period.

Mid range villas also saw a spike in sale prices from just under Dhs750 per square foot in January to nearly Dhs900 per square foot in September.

“Villa prices now match spring prices in 2007,” the report added.

According to the Dubai Land Department, Dubai property transactions grew 21 per cent to Dhs63 billion in the first half of 2012, compared to Q3 and Q4 2011.

“Cluttons can also confirm that internal valuation instructions for both villas and apartments have increased some 23 per cent since Q4 2011 and 50 per cent of these represent mortgages of new property acquisitions,” the report added.

The company predicts that prices will remain relatively stable over the next 12 months.

“The 24,000 residential units scheduled to be delivered in the second half of 2012 will bring a large stock of supply onto the market making huge price uplifts or a ‘boom’ scenario unlikely,” the report said.

“The market sentiment is very good and prices have been on the increase for a while,” Mario Volpi, Sales and Leasing manager at Cluttons told Gulf Business.

“The appetite for residential property is definitely back as investors are also returning to a market that was originally driven by owner occupiers,” he said.

Niall McLoughlin, senior vice president, at Damac Properties agrees. “The Dubai property market has been picking up for some time and we expect this to continue well in to 2013,” McLoughlin said.

“There is a mid to long-term view of investment in Dubai’s property market now which will see consistent growth in the coming years.

“This is a natural cycle for a maturing real estate industry which will create many opportunities for impressive returns in both rental income and capital gains, outstripping the money markets.”

According to Matthew Green, head of Research and Consultancy UAE at CBRE Middle East, market activity is currently focused on the master developers, since Nakheel, Emaar and Dubai Properties are all launching or re-launching properties this year.

“This trend has been prevalent over the past 18 months with the major developers generally pushing to complete their live projects and further establish masterplan communities.

“Clearly there is improved sentiment in the market and that is portrayed by a return of off-plan sales launches. However, there is a note of caution to sound, with investor focus still firmly on completed and income generating assets,” he added.

With Dubai’s premier property event Cityscape gaining global focus, Green also stated that it’s an opportunity for the emirate to promote its status as a global commercial hub.

“Cityscape will be interesting this year and we believe it will be better than last year in terms of more people visiting the event and developers launching a few new projects. This year’s show we believe will mirror the present sentiment that the Dubai property market is definitely back on an even keel,” said Volpi.

Damac’s McLoughlin said: “Cityscape Global remains the main focal point for the industry to meet and discuss new opportunities in the UAE real estate market.

“This year Damac Properties will present more opportunities for the luxury serviced apartment offering we are bringing to market early next year. We believe that this segment of the market is currently underserviced in Dubai and can offer a very flexible and rewarding investment opportunity.”


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