Weekly Dubai real estate news digest. Issue 36

09.03.2014
Dubai's growing global presence 
Welcome to the thirty-sixth 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 36 |  March 9, 2014

Dubai's growing global presence 

The UAE has eyed a place on the global map ever since it began implementing a plan to diversify its economy. Whether it be through building the tallest tower or by opening the most luxurious of malls, the goal has always been to create waves globally. It's hardly any surprise that the country has now taken steps to make sure that its realty attracts just as many international investors as the city attracts tourists. 

In fact, Dubai and Abu Dhabi have been named among the world's fastest growing premium property markets, ranking seventh and eighth respectively. The findings were revealed in Knight Frank's Prime International Residential Index. The report's editor Andrew Shirley believes that the UAE has come a long way from being just a glitz and glamour icon. "People originally referred to Dubai's growth as a mirage, but it's become an increasingly important hub between Europe and Asia. People want to invest there because of its growing strategic importance."

There is still a clear emphasis on the luxury market and prices in Dubai have gone up by nearly 17% in this area. However, rents are still cheaper when compared to other global cities. According to Knight Frank's Wealth Report 2014, USD 1 million in Dubai 146 square metres of prime property as compared to only 25.5 square metres in London or 32.6 metres in Singapore. Knight Frank's Head of Prime International Residential Index Analysis Kate Everett-Allen said: "Inevitable debates have ensued as to whether Dubai and Dublin are on the cusp of another bubble. However, in both cases, average prices have yet to approach, let alone exceed, their pre-crisis highs."


As the Emirates grows increasingly popular as an investment destination, new projects are being rolled out. According to an economist - Frank Soussa - the current pace of population in Dubai can absorb an average 25,000 units each year. At the same time, the government of Dubai remains committed to keeping rental rates within permissible limits to prevent another property bubble like that of 2008. 

Market Insight is aimed at examining the emirate's dynamic market and forecasting industry trends. With Dubai's win of hosting Expo 2020, there are bound to be even more projects aimed at putting the city on the world map. Even now, the developer of Burj 2020 has announced that the world's largest commercial building will have a 360-degree observation desk on the topmost floor. We'll be sure to listen out for news of any such projects and keep our readers in the loop on the latest. 

Sincerely,

Pashma Manglani

Editor


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UAE among world's fastest growing premium markets 

Dubai and Abu Dhabi have been named among the world's fastest growing premium property markets, according to research by consultancy Knight Frank.

The UAE's two largest cities benefited from the improved economic situation and a more stable real estate market to feature in the top 10 fastest-growing property markets in the global real estate consultancy's Prime International Residential Index (Pin). The findings were contained in its Wealth Report for 2014.

Property prices in both emirates increased by 17% and 15% respectively, placing them in seventh and eighth place in global rankings.

Asian cities dominated the report with Indonesia and New Zealand home to the world's four fastest-growing markets.

 

Read more on The National

Prices up 17% but luxury realty still cheap

Dubai's prime luxury property market remains affordable in comparison to key global cities in spite of rising 17% in 2013, Knight Frank's Wealth Report 2014 reveals.

According to the UK-based real estate consultancy, one can buy 146 square metres of prime property for USD1 million in Dubai as compared to only 15 square metres in Monaco, 20.6 square metres in Hong Kong, 32.6 square metres in Singapore and 25.2 square metres in London.

Among the cities surveyed, Dubai is 19th on the list with Cape Town taking the last slot. In terms of price growth, Dubai ranked seventh on the list among ten global cities surveyed.

 

Read more on Emirates 24/7

Emirate can absorb 25,000 units a year 

The current pace of population growth in Dubai can absorb and average 25,000 new units per year,according to Citi. The figures explain the new property launches across the city. 

"Vacancy rates in the residential markets peaked in 2010 and have been calming down steadily ever since. What's more, we believe, there is scope for the market to absorb further development given the current rate of population growth (currently estimated at around 7%)." said Frank Soussa, Middle East economist, Citi. 

He explains that current levels of construction activity are not "out of line with market fundamentals." According to him, they are also not creating the kind of distortions to overall economic growth that occurred in the lead up to 2008. 


 

Read more on Emirates 24/7

Industrial sector sees rise in demand

Momentum remains in the industrial property market with steady rates and growth throughout the UAE, said a new report. 

According to Cluttons Q14 report, the industrial market was bolstered by an improved economic climate, the successful win of Epxo 2020 and the launch of passenger services at Al Maktoum International Airport.

Steve Morgan, head of Cluttons Middle East, says: "Steady growth following the win of Expo 2020 is inevitable with a rise in demand for space surrounding the expo site already starting to materialise. Facilitating this gravitation of business and industrial activity is the government's ramping up of critical infrastructure projects across the city as Dubai readies itself for the expo in six years time."

 

Read more on Emirates 24/7

'Rents will be kept in check'

The government of Dubai will focus on advanced industrial sectors and commercial real estate while working to keep the market within permissible limits, according to a Department of Finance report.

Titled 'The Global Financial Crisis - Lessons Learned,' the report offers a peak into what the government's strategy will be in the post-crisis era. The government aims to focus on commercial real estate such as hotels, malls and offices in the realty market and to regulate the rental market. 

 

Read more on Emirates 24/7

Burj 2020 to feature largest observation deck

The developer of Burj 2020, billed to be the world's largest tallest commercial building, plans to have a 360-degree observation desk on the topmost floor of the mega tall structure.

"I realise that many of these decks worldwide do not offer 360-degree view, but this one will be an all-around viewing deck," said Ahmed bin Sulayem, executive chairman, Dubai Multi Commodities Centre (DMCC). He explained that the plan is to build a dome so that people can walk around and have nothing blocking their view.

 

Read more on Emirates 24/7

JBR ghost tower comes to life 

An apartment tower in the popular Jumeirah Beach Residence (JBR) area that has been empty for the past eight years is finally coming to the market.

Shams 1, a tower of 317 apartments, was completed by the master developer Dubai Properties Group back in 2006, but has lain mostly empty throughout the boom and bust years of the Dubai property market.

"It was really a ghost tower which has been locked up for the past couple of years," said Lucy Bush, the head of residential sales and leasing at Cluttons. "The entire tower was bought by a private investors as an investment and has changed hands over a couple of times since then." This week, Cluttons announced that it was selling 100 two-bedroom apartments in the block, having already sold another 100 one and three-bedroom flats.


Read more on The National

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