Tag Archives: dubai
Residential property prices in Dubai likely to remain steady or fall in 2015
Dubai's residential property bubble is deflating and average prices will remain the same or fall by up to 10% during 2015, a new study suggests. According to international real estate firm JLL, prices and rental rates have grown to an unsustainable rate over the last two years. JLL head of research for the Middle East and North Africa (MENA), Craig Plumb, said that a period of stability will be good for the market. There have been concerns voiced that lower oil prices could have an impact on the emirate’s property markets but JLL points out that Dubai is less vulnerable to lower oil revenue than other Gulf Cooperation Council (GCC) oil exporters, due to its diverse economy and growth in non-oil sectors. Overall, the second half of 2014 saw Dubai’s residential market stabilise as average rents and sale prices remained relatively flat, with marginal declines over the last quarter. On an annual basis, the REIDIN rental index shows growth levels dropping from 18% in 2013 to 15% in 2014. Similarly, the sales market saw some cooling down as the REIDIN sales index points to a decline in growth levels from 23% in 2013 to 20% in 2014. This comes as the number and value of transactions dropped 30% & 14% respectively in 2014, according to data from the Land Department. JLL predicts that the residential sector is likely to remain subdued over the next 12 months as the market is expected to absorb 25,000 additional units in 2015. ‘In reality, we remain cautious of the delivery of some of these projects within the timeframe,’ the firm says. It also points out that as Dubai’s economy continues to expand and job creation grows, demand for affordable housing is expected to increase over the next 12 months. This comes as a proposal to ensure the availability of affordable housing for the middle-income segment of the market is currently under review. ‘These efforts aim to create a balance between the supply of luxury and affordable housing units that cater to all residents in the Emirate, as many were previously priced out of the market during the 2013/2014 price rally,’ the JLL market overview report says. It also shows that in 2014 the supply of units in Dubai increased to 377,000, up from 342,000 in 2011 and the firm predicts that 25,000 residential units will be added in 2015, some 13,000 in 2016 and 12,000 in 2017. ‘While lower oil prices are likely to dampen investment sentiment in the short term, Dubai’s success at diversifying its economy and expanding its global reach makes it less vulnerable to oil price fluctuations,’ the report explains. ‘The next 12 months are expected to see a boost in business activity, highlighted by the government’s 2015 budget announcement which saw planned spending and revenues increase 9% and 11% respectively. However as government charges increase further in 2015, we remain wary of pressures on the cost of living as inflation registered 4% at the… Continue reading
Property markets in Dubai and Abu Dhabi set for a stable 2015
Property prices in Abu Dhabi are expected to see a gradual increase in 2015 but not on the scale that was seen in 2104, it is claimed. Leading property firm Cluttons believes there is still some great investor appetite in Abu Dhabi and predicts that new residential schemes will still be popular. It also expects that there will be more off-plan housing launches this year, from the leading firms such as Aldar and TDIC as well as some private developers. But William Neil, head of Cluttons in Abu Dhabi warned that there is a danger that residential rents could continue to go up. ‘With no rental cap in place in Abu Dhabi, if there is a lack of supply then the market could face some of the same issues it faced back in 2007 when rents were so expensive that many people were forced to commute here each day from Dubai,’ he explained. He added that the commercial market is waiting with anticipation to find out what the new rules will be regarding the proposed financial free zone on Al Maryah Island. ‘With Yas Mall now open, we are predicting growth for retail rents in the city. However, with more shopping centres being built on Al Maryah Island and Saadiyat Island, there is a danger over the next three years for oversupply,’ he said. Meanwhile, in neighbouring Dubai the New Year is expected to see a mixed outlook with some sectors of residential property selling well but prices and sales varying depending on location. According to Matthew Green, the head of research and consultancy for the United Arab Emirates at CBRE Middle East the residential market has shown signs of stabilisation over the past six months across both sales and leasing markets. ‘We expect this to be a similar outlook for this year, with the scheduled pipeline of 20,000 new units during the year likely to help constrain rental inflation and add more balance to the sector,’ he said. ‘As has been the trend, a fragmented market will continue, with certain products and locations performing somewhat independently from the wider market. For example, the villa market, which has been relatively stable in recent quarters, could be set for rental deflation in certain areas as a substantial supply of new units starts to emerge from locations such as Jumeirah Park, Arabian Ranches, Dubailand and Jumeirah Golf Estates,’ he explained. ‘The demand for mid to low end residential offerings is expected to remain strong in the short term because of limited supply and high demand. Much of this demand is being generated by solid growth in the services sector, particularly from the retail and hospitality industries,’ he added. Dubai’s commercial office sector saw improvement in 2015 and this is expected to continue into 2015 and Dubai’s position as the headquarter city of choice for global corporates in the Middle East looks set to continue. ‘However, with limited good quality and efficient office properties available in the… Continue reading
Sharjah to allow expats to buy property for the first time
Foreigners are to be able to buy in Sharjah for the first time after the government passed a law enabling expats from anywhere in the world to invest in the real estate market. Leases of up to 100 years will be granted to overseas buyers provided they hold a United Arab Emirates residency visa, officials have confirmed One reason behind the decision is the huge demand for homes from people working in neighbouring Dubai. But there will be restrictions on locations with only property in new investment areas on the edge of the city centre being available. The first new development to offer the long leases will be Tilal City, a 25 million square feet development on Emirates Road close to the Al Dhaid Interchange which is being developed by Sharjah Asset Management and Eskan Real Estate Development. The project comprises 1,800 land plots. Officials said the new rules would create ‘new cluster cities’ outside central Sharjah which would reduce traffic and congestion in the main city centre. The move is also aimed at outlawing the number of disputes caused by foreigners attempting to get around the previous rules which prevented anyone other than GCC Arabs, and a few non-GCC Arabs and Asians with special permission, from owning real estate in the emirate. ‘There are over 220 nationalities here in Sharjah. But we think the biggest demand will come from Arab and Asian Muslims living here who want their families to live in a stable and safe environment,’ said Hamad Salem Al Mazrooa, director general of the Sharjah Real Estate Registration Department. ‘The only restriction is that they must have a residence visa at the time of purchase. If for some reason after the purchase their residence visa expires, they are free to hold the property, lease or sell it as they wish,’ he explained. Officials are keen to prevent developers selling hundreds of off-plan apartments to speculators who would then flip them on at a higher price, something that contributed to the recent boom and bust in house prices in Dubai. ‘We want to avoid off-plan speculative flipping, as in the past in the UAE before the crisis where developers were marketing the project and didn’t finish building, took the money and left the country,’ Salem explained. The Sharjah Real Estate Registration Department is to open a small registration office at the Tilal City site where foreign investors could start to register their properties. Faisal Durrani, international research and business development manager at Cluttons, described it as an historic milestone for Sharjah. ‘Traditionally, international investors have focused their attention on Dubai and Abu Dhabi, but the move will open up a new market, to investors residing in the UAE,’ he said. ‘The success of Tilal City is likely to determine whether a number of similar schemes are brought forward in Sharjah. However, based on the number of gated community feasibility studies that Cluttons has been commissioned to undertake, in close proximity to Sharjah International Airport, we expect to see similar developments launched… Continue reading
