Weekly Dubai real estate news digest. Issue 34

23.02.2014
Developers up  their offerings
Welcome to the thirty-fourth 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 34 |  February 23, 2014

Developers up  their offerings

The realty market in Dubai is all set for a fresh burst in the area of construction with hundreds of new apartment projects being started and released this year, leaving little doubt that the market is seeing a significant rise in demand. Much of the resurgence in the sector has been driven by the country's strong economic fundamentals, safe haven status and growing interest from regional and international investors. 

Since the beginning of the year, Emaar Properties has launched five new projects (which has, interestingly, also reported a 48% increase in profits). Meanwhile, Nakheel has announced sales for land plots in master developments while also revealing information about the launch of its Palm Tower Residences. Overall, there has been a surge in developments in the Palm area. 

Key areas of interest for future developments include Downtown and Business Bay, which are seen as being the best option for new developers to enter the market. "There are limited new plot options available at these locations now, and they are the ones where values are recording some of the highest growths in Dubai," said Ravi Pillai, chairman of the Bahrain-based RP Group.

Interest in the UAE is also not confined to just Dubai anymore. Buoyed by the growth in the emirate's realty sector, developers are looking for first-mover advantage by taking on projects in the northern emirates and bringing in buyers in their wake. Ras Al Khaimah, for example, is recording a steady topping up of new releases. "We do see increased interest in this market, not just from existing and new investors, but also end-users who are priced out of the Dubai market," said John Steven, managing director, Astenco Project Management.

"In the current market where everybody is getting excited about real estate, asking prices rise more quickly than achieved prices, which means that the gap between the two is widening," said Craig Plumb, head of research at Jones Lang LaSalle's Dubai office. He says asking prices are about 20% higher than achieved prices. Meanwhile, according to property broker Asteco, house prices in Dubai increased by nearly 60% last year and the website propertyfinder.ae noted a 45% increase in average values in Dubai's key neighbourhoods over the same period. 

Market Insight is aimed at examining the emirate's dynamic market and forecasting industry trends. Demand for property is at an all-time high, resulting in a rush off new projects as investors seek a piece of the market. It can be challenging to make a decision on which area to invest in and we'll be sure to follow latest trends, highlighting affordable communities and those with high-growth value. 

Sincerely,

Pashma Manglani

Editor


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Property burst on Palm to provide new flats

A resurgence in the property market is driving an increasing number of developers to launch projects in Dubai, especially in the Palm Jumeirah.

Emirates 24/7 reported that since the beginning of the year, Emaar Properties, Dubai's largest developer, has launched five new projects, and Nakheel has announced sales for land plots in its master developments.

Meanwhile, the Palm Jumeirah is set for a fresh burst of property letting and construction activity. The Kuwait-based IFA Hotel Investments will start to release residential and serviced apartments at the Balqis Residence in its mixed-use Kingdom of Sheba Complex on the Palm Crescent this week. Separately, Nakheel said it was launching 504 apartments in its Palm Tower, a 50-storey landmark development on the palm-shaped island. 

 

Read more on The National

Developers line up for mature locations 

With their advanced infrastructure, Downtown and Business Bay represent the best options for a new developer to come in and make headway with their projects. This applies to both getting the projects completed as well as making sure they are a hit with investors and end users.

"There are limited new plot options available at these locations now, and they are the ones where values are recording some of the highest growths in Dubai," said Ravi Pillai, chairman of the Bahrain-based RP Group. In its initial foray into real estate development, the group is committing $1.5 billion for mixed-use projects. 

"The best part of getting into established projects is that little time is needed on the support infrastructure...it's already there. We intend to go directly into our projects." 

 

Read more on Gulf News

Price confusion can cause inflation, warn experts

Unreliable and confusing data is distorting the UAE property market and risks inflating the market. 

That is the fear of some industry analysts who say investors are buying into vastly inflated figures that are fuelling speculation. 

There is still little publicly available official house price information for investors to tap beyond periodic reports from local and international brokers. Instead, property brokers, property data companies, listing websites and banks fill the information vacuum, pushing out their own statistics on sales and rents, which often contradict each other significantly. 

"In the current market, where everybody is excited about real estate, asking prices rise more quickly than achieved prices, which means that the gap between the two is widening," said Craig Plumb, the head of research at Jones Lang LaSalle's Dubai office. "The lack of reliable information does cause distortion to the market. We believe asking prices are currently probably around 20% higher than achieved sales prices."

 

Read more on The National

End-users, key drivers of Dubai realty


End users and investors are the main drivers of Dubai's real estate market, experts and developers told Gulf News at the opening of the new property show, Next Move live.

The three-day show is the first in the UAE dedicated to showcasing residential properties and offering potential customers a unique platform to learn about properties they want to purchase.

The exhibition is hosting dozens of local and international exhibitors showcasing more than 4,000 properties, the majority of which are already completed.

Patrick Al Khoury, chief operating officer of Sheffield Holdings Limited, said that the market is maturing by the day and is expected to sustain a steady annual growth of 10% in the coming two years. "Today the real buyers in the market are either true end users or real investors. With the new rules and regulations in the realty market in Dubai, there is no place for speculators anymore," he said.

Read more on Gulf News

Emaar's profits top AED2.5b

Strong performance across its malls, property and hotel units helped push quarterly profits up by 48% at Emaar Properties.

Full-year net income rose 21% to AED2.56 billion, beating expectations. The Dubai-based company generated AED756 million in profit in the fourth quarter, capping a bumper year for property, retail and hospitality in the emirate. 

Dubai's largest listed property developer said annual sales rose 20% to AED10.3 billion, driven by a 33% increase in revenues for the company's property division to AED5.5 billion as the company benefited from a revival in the Dubai property market last year.

Read more on The National

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