Staying on track
Developers in the UAE have been busy, announcing an array of projects that include apartment towers, villas and even town houses. In fact, Dubai has over 700 projects worth US$123 billion in various stages of planning and construction.
Most real estate experts agree that the property market appears to be reaching a more stable point with a rapid growth in demand. According to EC Harris' 2014 International Focus on the UAE report, the country is increasing its social infrastructure spend and there is accelerated momentum across industry sectors. "The market is finally showing real signs of recovery and prospective growth suggesting that the construction market will remain strong this year," said Christopher Seymour, Partner and Head of Property and Social Infrastructure at EC Harris.
The government's efforts to curb speculation has been attributed as the main reason for the sense of stability that has settled in. "The UAE has taken measures to discourage speculative demand which is a very healthy and positive sign for the industry," said Matthew White, director, Sales and Leasing, Chestertons MENA. Meanwhile, real estate firm Knight Frank also pointed out that a slowing down of the growth rate in the sector is a result of higher transfer fees and mortgage caps. On the luxury home front, prices increased by just 6.3% year-on-year in the second quarter of 2014 as compared to 24% in the mainstream market.
It is also apparent that the UAE remains a key spot for regional investment with Arab investors taking a keen interest in Dubai property. The Dubai Land Department reported that a total of 17,289 real estate transactions worth AED37.5 billion were carried out in the first half of this year. Jordanians topped the list of Arab investors, making 640 transactions worth AED1,347 billion while Lebanese nationals came second with realty deals of AED1.235 billion.
Market Insight is aimed at examining the emirate's dynamic market and forecasting industry trends. While concerns remain that the sector is moving too fast (back towards a crash), most experts agree that there has been a change of attitude on the part of developers as well as the government. With stricter measures being enforced, they remain optimistic that the market will make its way to recovery, achieving its goals before the Expo 2020.