Weekly Dubai real estate news digest. Issue 10

08.09.2013
Property price boom 
Welcome to the tenth issue of Market Insight, your weekly guide to what's happening in the Dubai real estate market.
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MARKET INSIGHT. Weekly guide to Dubai's property scene
Issue 10 |  September 8, 2013

Property price boom 


Apartment prices are on a soaring rise - up 38% from the previous year. While some experts have been cautious of what this means for the future of the market, a new report has revealed good news for investors.

According to a report by Standard Chartered Bank, there are key differences to this property boom when compared to what happened in 2008. The report pointed out that this time, the driving factor is a growth in the logistics, hospitality and retail sectors and an increase in the population of the city. In 2008, it was more about speculators looking to flip property for a quick profit.

The report did note that there is a risk for the market to turn back towards a speculation-driven market if authorities are not careful with their regulations. 

When it comes to growth, this is the year of apartments. While previously, it has always been villas that outperform, in the second quarter of 2013, apartments were selling for 12% more and leasing for 7% more than in Q1 2013; meanwhile, villas were selling for 8% more and leasing for 6% more. 

Keeping with the growth in the market, developers are all set to launch new projects in the coming months. The most popular areas for future developments include Downtown Dubai, Business Bay, Jumeirah Village and Dubai Maritime City. 


Market Insight is aimed at examining the emirate's dynamic market and forecasting industry trends. Most leading experts seem to hold an optimistic viewpoint for the future of the emirate's property market. We hope that our round-up of stories and expert opinions has helped some of you decide on whether it is a right time to invest in the housing market. Be sure to catch our next issue to know more about new industry trends. 

 

Sincerely,

Pashma Manglani

Editor


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Apartments outperforming villas 


While in 2012, villa prices fared much better than apartment prices, the trend has now reversed, according to a report by Standard Chartered Bank.

The report titled 'Dubai housing: Fundamentals not speculation,' says that the strong performance of apartment leasing is pricing out some tenants from more expensive developments, benefiting affordable areas such as International City (where there has been a 27% increase in average rental rate year-on-year).

The residential-sale market's top performers are the Greens, with a 44% increase in apartment sale prices year-on-year and Jumeirah Village with a 40% increase in villa sale prices. The top-performing area in the villa leasing market is Springs, with an increase in the average rental rate of 35% year-on-year.

The report adds that in the second quarter of 2013, apartments were selling for 12% more and leasing for 7% more than in Q1 2013, whereas villas were selling for 8% more and leasing for 6% more. 

 

Read more on Emirates 24/7

No price bubble this time: Bank 


Residential property prices in Dubai are in the midst of another boom, but this time it's fundamentals - and not speculation - at play, a global bank has said in a new report.

Economic growth, improving demographics, return of investor confidence and improving regulations have been cited as the primary factors fueling the recovery in Dubai's house prices.

According to the 'Dubai housing: Fundamentals not speculation' report by Standard Chartered bank, Dubai's housing market is expanding on the back of improving fundamentals and a number of factors, including mortgage growth, low off-plan sales and increasing housing regulations - all of which differentiates this price rally from the one in 2008.


Read more on Emirates 24/7

Developers back on track

A number of developers are set to launch new projects in the coming months.

One of the major private players ETA Star Property Developers will be re-entering the market with a series of new launches in master communities like Jumeirah Village, Business Bay and Maritime City.

Meanwhile, Pacific Ventures, which has acquired projects under the Dubai Land Department's Tayseer initiative, has plans to launch a villa project.

Earlier, it was announced that an unidentified developer would be launching a new residential project in Downtown Dubai. Deyaar Development also said it was working on two projects in the Business Bay area.


Read more on Emirates 24/7

World's 'vainest' skyscraper in Dubai


The UAE has the "vainest" skyscrapers in the world with the 828-metre Burj Khalifa taking the title of the building with the largest vanity height.

The Council on Tall Buildings and Urban Habitat (CTBUH) said unusable space at the top of UAE's 19 tallest buildings was an average 19% of their total height, a measure known as the vanity height. In the Burj Khalifa, 29% or 244 metres is unusable, ranking on its own as the 11th tallest in building in Europe.

The top three was completed by the Zifeng Tower in Nanjing, China and the Bank of America Tower in New York.


Read more on Arabian Business

Owners decide service charge
 

Home prices are on the up but there is one key indicator that is holding steady or has actually taken a dip - service charges.

Owners associations are now taking complete control over the process from developers and their nominated facilities management companies.

According to P. R. Vijayakumar, managing director of Pacific Owners Association Management Services, the idea that owners control the management of buildings and decide their own service charges has been accepted by the communities. This has resulted in less friction between property management companies and homeowners. 

 

Read more on Gulf News

UAE asset wealth: $1 trillion 


UAE's built asset wealth, currently at $1 trillion, is likely to grow by two per cent over the next decade to $1.69 trillion, according to property and infrastructure consultants EC Harris.

The increase will move the UAE up two places to the 23rd position by 2022 in the Global Built Asset Wealth Index. 

The alternative economic indicator valued private and public property, including the infrastructure of 30 different countries against each other. 

 

Read more on Gulf News 

Possible rent hikes in DIFC limitless


Property owners in Dubai International Financial Centre are reportedly not bound by any regulation to limit rent increases.

"This means that parties are free to agree with certainty in their leases as to how they choose to deal with lease renewals, rent reviews and other issues that may arise in a landlord-tenant relationship," Brett Schafer, CEO, DIFC Properties told Emirates 24/7. 

He pointed out that the laws in DIFC are "well-adapted to promote fairness in the relationship between landlord and tenant." Schafer cited examples of laws such as DIFC's Real Property Law, Contract Law, the Law of Obligations, the Implied Terms in Contracts and Unfair Terms Law. 

 

Read more on Emirates 24/7

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