Tag Archives: dubai
Dubai sees property sales plummet compared to a year ago
The sales market in Dubai is slowing with the latest figures from the Land Department showing that they halved last month compared with a year earlier. Transactions fell 51.8% in April compared with the same month in 2014 and the total value was DH35.3 billion, down 37.1% year on year. According to the industry sales have been falling steadily since the end of last year after the Dubai government introduced tough new mortgage caps and higher transaction fees in an attempt to slow what had been one of the fastest rising housing markets in the world. Real estate consultants JLL and the ratings agency Standard & Poor’s are predicting that average house prices in the emirate could fall by between 10% and 20% this year while Deloitte has estimated that they will fall by 1% and 5% in the first half of this year. Indeed, according to CBRE average house prices fell 2% during the first three months of 2015. ‘These figures come as no surprise although from the face of it they look quite dramatic. A fall in volumes is a good leading indicator that prices will fall and we expect that to continue for the rest of this year. Last April the market was still booming, so any year on year figures will reflect that fact,’ said Craig Plumb, the head of research at JLL’s Dubai office. And the latest quarterly report from Phidar Advisory shows that residential prices in the first quarter of 2015 continue to decline, compared to the previous quarter. However, it is not all bad news according to Jesse Downs, managing director of Phidar Advisory as the market downturn is attracting selective opportunistic investment. The report also shows that overall prices fell by 3.9% in the first quarter of the year while apartment lease rates were down 0.3% and for villas they were down 2.4%. But apartment sales were up 0.6% year on year while villas fell 57%. Continue reading
New analysis identifies rising commercial opportunities in smaller UK cities
Rising capital values and strong competition are now driving investors to look beyond the major UK cities for quality office stock and potential value, a new report shows. The analysis from global property consultancy JLL looks at the economic and office market performance of 37 smaller towns and cities giving an insight in to which locations will offer the biggest opportunity over the next five years. The report shows some smaller cities are found to have a stronger outlook than the major cities such as London, Manchester and Birmingham. It explains that the success of these smaller cities will be closely associated with their ability to develop and grow clusters of businesses, along with strong university links and the provision of integrated transport and infrastructure. Growth leaders, including Brighton, Solihull and Reading have seen capital value increases of over 25% since the end of 2012 and are expected to see a stronger than average economic performance over the next five years. With the outlook remaining solid for these cities, most of which have firmly established business clusters, JLL says it may be prudent for investors to focus on opportunities where they can reposition their assets to benefit from any price growth. The report also reveals locations such as Oxford, Warrington, Southampton and Nottingham, with a similarly strong economic outlook but where recent capital value growth has not been as strong as the growth leaders and opportunities may actually be greater going forward. These potential performers include a broad range of property markets that JLL anticipates could benefit from further capital growth as the property market continues to respond to the improving economic climate. ‘The outlook for the UK’s smaller cities is now more optimistic than it has been for some time. Our research shows potential performers, including the likes of Oxford and Warrington, should benefit from further capital growth over the coming years as the property market continues to improve,’ said Chris Ireland, chairman and lead director for UK Capital Markets at JLL. ‘Indeed, the potential for growth in some of the smaller cities may be greater than in the big six regional centres which have already seen substantial uplift,’ he added. ‘From an occupational perspective, we think there will be a gradual shift towards office rental growth in a number of these centres which should ensure continuing investor and developer interest,’ explained Ireland. According to Ben Burston, head of UK offices research at JLL, strong business clusters are a key determinant of future growth prospects. ‘For instance, Oxford’s strong life science cluster is contributing to a robust employment growth outlook, while Warrington is benefitting from a strong nuclear research and technology cluster,’ he said. ‘The devolution agenda provides an opportunity for more decision making to be taken at local level, which could help drive improvements to transport, infrastructure and public realm that will help attract people and businesses, and thereby drive future growth,’ he pointed out. Cities identified in the report as… Continue reading
Dubai to get mandatory affordable housing quotas
A proposal by Dubai Municipality to introduce mandatory affordable housing quotas for all new residential developments is expected to bring a wide range of benefits to the emirate, it is claimed. The move will create further maturity in the market and is long overdue, according to a new report from international real estate consultants, Cluttons. With the residential market in Dubai now meandering through the second half of the current property cycle and with values stabilising following the tremendous growth recorded in 2013 and the first half of 2014, the timing for the introduction of such legislation is ideal, the firm says. According to Steven Morgan, chief executive officer of Cluttons Middle East, the issue of affordability has been one that has been quietly bubbling away in the background for some time. ‘With the introduction of the Federal Mortgage caps and the doubling of property registration fees, we saw genuine end users in the market forced into a holding pattern as they attempted to make the transition from rented accommodation to owner occupation,’ he said. ‘The surging rents, driven by the exceptionally strong underlying demand, which was linked to the robust economic growth, meant that household finances were coming under tremendous pressure on several fronts,’ he pointed out. ‘Now of course, with rents starting to show greater stability, households have a window of opportunity to consolidate their finances and make that leap to owner occupation. The prospect of those on monthly incomes of between AED4,000 and AED12,000 being able to control their rental outgoings will no doubt go some way to aiding the speed at which deposits can be amassed,’ he added. He also pointed out that it is important to remember that there is a huge pent up demand for affordable housing in the UAE and with rental affordability thresholds being breached in many cities, we welcome the news on this key issue. According to Cluttons, the idea of affordable housing is not a new concept and it has served cities such as London well, where developers are liable to provide affordable housing for developments starting with as little as ten units. In particular it has aided in the creation of diverse communities, while allowing people from all financial backgrounds to live alongside one another. ‘There have of course been exceptions to the rule, where developers have been permitted to build off-site affordable housing, with land costs being cited as the primary driver for this. Dubai stands to learn a valuable lesson from this as the authorities in London have often been criticised for effectively creating lower income neighbourhoods through this method,’ said Cluttons' international research and business development manager, Faisal Durrani. He explained that Dubai is clearly not short of affordable neighbourhoods. Karama and Satwa are two key stand out areas that evolved organically at the edges of the Deira-Bur Dubai and Jumeirah districts, respectively. ‘During the course of expansion of any city, affordable districts often tend to spring up on the fringes… Continue reading
