Dubai recovery picks up speed
Property prices in Dubai have been inching upwards during all of 2013. As a result, the housing and utility component of the consumer price index (CPI) - which accounts for 44% of overall inflation - has gone up by 2.9%.
With rentals becoming more expensive, buyers and renters have turned to more affordable locations, such as Dubailand and Dubai Sports City. The third quarter report of propertyfinder.ae revealed that these areas are where most new developments will be taking place. Two bedroom apartments in Dubailand range from Dhs60,000 to Dhs80,000 per annum as compared to Dhs70,000 and Dhs100,000 for those in Sports City.
Ever since the market has begun its recovery, industry experts have been split down the middle on the impact this will have on the economy. However, US-based investment bank Goldman Sachs Group recently commented that fears on Dubai's market experiencing a bubble are "exaggerated." According to the report, new regulations from the Dubai Land Department are doing the job on curbing speculation while new supply is helping keep values down.
New realty rules are also helping banks contain property risks, according to Fitch Ratings. The agency said that the doubling of property registrations fees and planned caps for mortgage lending help ensure that banks have enough capital to fall back on when required.
In other news, the commercial sector has also been faring well in the emirate. The amount of office space is set to increase by more than a fifth next year and according to property consultants Knight Frank, this is bound to prevent any steep increases in rents. Dubai International Financial Centre authorities have already ruled out an increase in office rentals.
Market Insight is aimed at examining the emirate's dynamic market and forecasting industry trends. Prices for properties in the emirate are on a steady increase, but most experts believe the growth is more contained this time around (especially as a result of Dubai's regulatory measures). We hope our round-up of key stories and expert opinions have helped pinpoint latest developments and popular projects. We'll be following up on the hottest new properties and be sure to update you on the latest realty news.