Leading the way forward
House prices in most major cities are on the rise but while the global average is close to 2.4%, Dubai has been soaring ahead with a 5% quarterly increase. According to London real estate firm Knight Frank's global price index, Dubai is in the lead in annual rankings, recording a price growth of 21.7% in the year to the end of June.
The emirate's housing market has been gaining momentum since 2012 and its real estate rebound will continue into 2014, a new report has said. Fitch Ratings said in its report that a "strong 2014" is to be expected, noting that residential prices and demand has shown recovery in prime locations in Dubai.
The report highlighted that secondary projects and new developments may be challenged in the short term. Other challenges include the ability of real estate companies to maintain performance in light of increasing supply and large expansion across all segments.
While the market's recovery is evident, another thing that is clear is the lessons the industry has learnt from the recession. Market maturity and greater regulation can be witnessed in today's sector. Mortgages are harder to come by than ever before and most banks have stopped issuing financing to overseas buyers, simply because of the costs involved and the lack of authority the bank has to ensure action is taken when payments are not made.
Another consequence has been greater financial literacy among the people and investors interested in the market. A new electronic tool has been released that allows buyers to compare mortgage rates across the Emirates, providing individuals with better access to information and promoting transparency.
Market Insight is aimed at examining the emirate's dynamic market and forecasting industry trends. With Dubai leading the way in the global market, most experts predict an upward 2014 market. We hope that our round-up of stories and expert opinions has helped shape the direction the industry is heading towards. Be sure to catch our next issue to know more about the latest in industry trends.