Weekly Dubai real estate news digest. Issue 60

24.08.2014
Staying on track
Welcome to the sixtieth 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 60 |  August 24, 2014

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.

Sincerely,

Pashma Manglani

Editor


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'Property sector remains vibrant this summer'

The property sector across the UAE has remained vibrant and active during this summer, according to international property agency Chestertons.
 
The company further stated that Dubai in particular, has witnessed impressive growth levels across different master developments.

Matthew White, director, Sales and Leasing, Chestertons MENA said, "We have seen a rapid growth in demand for properties based in Dubai and Abu Dhabi during the last few months. There is a high level of interest from local, GCC based and international investors. As per reports Dubai has over 700 projects worth US$123 billion in various stages of planning and construction. On the other hand, UAE has also taken measures to discourage speculative demand which is a very healthy and positive sign for the industry. As a result more end-users are now looking to capitalize on the country's growth potential and enjoy the tax-free safe haven status".

 

Read more on Zawya

Turnaround for stalled projects happened 'too fast'

Dubai's property market has seen an increase in sale values, rentals and investor sentiments. Over the last year, the turnaround has also managed to revive the fortunes of those stalled projects caught out during the recession.

According to market sources, more than 50% of the 100-odd affected projects have already gone through the transition.

But the pace of revival has come with unforeseen consequences for those investors who are trying to get in now, reports Gulf News. “The revival had been easier for the smaller and medium sized projects as the amounts needed were moderate,” said Sameer Lakhani, managing director at Global Capital Partners, an investment firm. “Perversely, the revival in asset values has made the process of revving some of the larger projects — especially in Dubailand — more difficult as the expectations of the various (original) stakeholders have also risen in consonance with the revival of the market." Market feedback suggests that negotiations are on for some of the larger stalled projects. 


Read more on Gulf News

Regulations have impact on property price growth

Growth rate in the property sector has been slowing down this quarter and now, real estate firm Knight Frank says this can be attributed to higher transfer fees and mortgage caps.

According to Khawar Khan from the international real estate consultancy, new rules have impacted Dubai’s luxury homes market to a much greater degree. Prices increased by just 6.3% year on year in the second quarter of 2014 compared with 24% in the mainstream property market.

"Established, mainstream locations such as Dubai Marina remain very popular among western expats and continue to see healthy demand and thus price growth. That in turn has led some investors to look elsewhere for value, including newer developments in areas such as Jumeriah Village, Dubai Sports City and Dubai Silicon Oasis where prices are rising off a relatively low base," said Khan.

He also pointed out that the new mortgage rules implemented by the UAE Central Bank are stricter for those buying residential property worth over AED5 million. 

 

Read more on Property Wire

UAE construction market to stay strong: Report

A new report says the UAE construction market is set to bounce back to nearly full capacity with a number of megaprojects in the pipeline, Zawya reported.

According to EC Harris' 2014 International Focus on the UAE report, the country is increasing its social infrastructure spend as well and there is accelerated momentum across industry sectors. 

"The UAE has experienced a shifting momentum of activity over the past decade with 2009 onwards being difficult years for the market. The dynamic has changed from a period of negative to low inflation over the last few years to a period of moderate increase," said Christopher Seymour, Partner and Head of Property and Social Infrastructure at EC Harris. "The market is finally showing real signs of recovery and prospective growth suggesting that the construction market will remain strong this year."

According to EC Harris' Construction Cost Index, construction prices in the UAE are set to rise by 4 to 5% over the duration of the year and approximately 6% in 2015.

 

Read more on Zawya 

Emirates scores below average on living conditions

Cities in the UAE have scored a below-average score in a global list ranking the cities with the best living conditions, it was announced on Tuesday.

According to Arabian Business, the 2014 edition of The Economist Intelligence Unit’s Global Liveability Index ranked Dubai 78th out of 140 cities around the world, scoring 74 points out of a possible 100. Abu Dhabi was placed one position lower in 79th, scoring 73 points. The EIU report said the global average score was 75.33 points.

Last year, Dubai was ranked 77th and was named one of the most improved cities in the world.

Melbourne remained the most liveable location of the cities surveyed, followed by the Austrian capital, Vienna. Vancouver, which was the most liveable city surveyed until 2011, was ranked in third place.

Damascus in Syria was named the city with the worst living conditions in the world, with Dhaka, Bangladesh and Port Moresby, Papua New Guinea also in the bottom three.A new report says the UAE construction market is set to bounce back to nearly full capacity with a number of megaprojects in the pipeline, Zawya reported.


Read more on Arabian Business 

AED37.5b invested in Dubai realty

Emiratis might be the top investors when looking at the GCC, but Jordanians topped the list of Arab investors while Indian nationals ranked first for foreign investment, reveals a Zawya report.

The Dubai Land Department has reported that total of 17,289 real estate transactions worth AED 37.5 billion were conducted in the first half of this year.  DLD 's report, issued by its Research and Real Estate Studies Department, revealed that Arab Investors completed a total of 3,058 transactions worth AED 6,905 billion in the first half of this year.

Jordanians made 640 transactions to the value of AED 1,347 billion, with Lebanese nationals second on the list of Arab investors through their creation of 459 real estate deals worth a total of AED 1.235 billion. Egyptians came in at third place after being involved in transactions worth AED 1,009 billion.

 

Read more on Zawya

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