Market value soars
Realty firms across the city have reported huge increase in revenue in addition to announcing new projects that will be in development soon.
Deyaar Development said its net profit climbed 300% to AED154.5 million for the year 2013 as compared to AED38.6 million in 2012. The increase has been attributed to the completion of projects in addition to meeting targets for ongoing projects, according to Saeed Al Qatami, CEO, Deyaar Development. It also saw gross profit go up to AED307.5 million. Meanwhile, Nakheel has awarded a AED375 million contract to build a retail complex on the tip of the Palm Jumeirah. Union Properties has also said that its net profit has jumped more than eightfold to AED1.58 billion last year from AED175.8 million in 2012. Lastly, building materials company Danube has confirmed plans that it would be entering the real estate development market with a AED250-500 million mid-tier residential project.
In terms of rental values, a report by Asteco revealed that mid-tier freehold communities are seeing the biggest gains this year. Rents in International City were up by 76% in the fourth quarter of 2013 while Discovery Gardens has also seen a substantial increase, followed by Jumeirah Lakes Towers.
With such a surge in popularity, new reforms have been put in place to ensure there is no repeat of the 2008 market crash. In fact, investors buying up stalled projects in Dubai now have to clear off all outstanding payments originally associated with these ventures. This reveals a breakthrough in Dubai's push to safeguard investor interests tied to property assets.
Market Insight is aimed at examining the emirate's dynamic market and forecasting industry trends. With leading developers in Dubai announcing significant increase in profits and purchases, it is clear that the market is on an upward trend. There has also been no shortage in announcements of new developments being launched, revealing the demand that is still quite prevalent. We hope to keep abreast of these changes as well as regulatory reforms, aimed at enhancing operations in the industry and will be sure to update our readers through our weekly analyses.