Back to the Future: Dubai property market to gain momentum

Last week, several sources confirmed that Dubai real estate market is likely to recover its previous development pace in the mid-2016.

One of these forecasts was made by Khalid bin Kalban, the head of Union Properties after announcing the launch of Dh750-million Green Community West - phase 3, on Tuesday. He believes that the status of Dubai as an international investments hub and its favorable geographical position and geopolitical situation will enable the emirate’s return to the stable growth in all economy’s areas, and especially in real estate industry. He ruled out any oversupply in the residential market, saying, “As far as rents are concerned, they are increasing and that is a clear indication that there is shortage in the market.”

The same was said in the forecast by the IMF, which predicted the UAE’s economy a new infusion of additional funds in the amount of at least USD 13 billion due to the lifting of international sanctions from Iran. According to IMF estimates, the annual GDP growth in the UAE due to the lifting of sanctions from Iran will be not less than 1%, plus to the annual growth of 3% over the next three years.

Dubai is a major transit hub, where all traffic flows to Iran intersect, so the lifting of sanctions will give a powerful additional impetus to the development of the emirate. Thanks to the trade recovery between Iran, the UAE and the rest of the world, office, commercial, and thereafter also residential property in Dubai will also be in high demand.

The demand for Dubai housing now and in future will significantly outperform supply, analysts and market participants say in one voice. This view is shared by Khalid Bin Kalban, the head of Union Properties, Ziad ElChaar, the head of Damac, and also by Land Sterling and Bayut consultancies.

An increased demand for affordable rents, recorded by the Land Sterling latest report, has predetermined the increase in rental prices for studio apartments in Dubai affordable areas by 13% in a quarter.

At the same time, a bit lower prices for Dubai luxury properties have also attracted a larger number of interested investors in the emirate, making the Reidin’s list of the most expensive apartments sold in the last three months in Dubai no shorter than always. It still features such popular Dubai’s luxury residential developments as The Fairmont Palm Residences on the Palm Jumeirah, Le Reve Tower in Dubai Marina and The Address Downtown Hotel in Downtown Dubai, where the price per square foot comes to USD 1700.

There is every reason to believe that in six months or so Dubai property market will return to the previous growth levels. Thus, it makes sense using this time wisely and investing in the emirate’s real estate before the prices start rising again, experts say.

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