Growth course and terms specified.

08.11.2015
Last week in Dubai has brought surprises, both statistical and forecasting. Long awaited news about housing market revival finally came from official sources: Dubai Land Department has confirmed that property prices are expected to start rising again in the middle of 2016.

Khalid Bin Kalban, the head of Union Properties, was the first to cheer up the potential investors. Presenting its new Green Community townhouses development, where about 16 duplexes and 210 townhouses are to be constructed, Union Properties chairman shared his colleagues’ intention to maintain the status quo between supply and demand in the Dubai housing market.

Then came the House Price Indices data from Phidar Advisory revealing that apartment yields in Dubai increased to almost a record of 7.5% over the last three months, while villa yields increased to 4.8% along with a decrease in sales prices and overall stability in the rental segment.

All these data were later completed by 'The Hub Report 2015' from Knight Frank, which reported that Dubai outperforms other world centers such as London, New York, Singapore and Hong Kong, in terms of property capital value growth, due to the emirate's luxury property prices increase of 59% in the last five years.

And according to Phidar Advisory, a compound annual growth rate in the Dubai housing market won’t exceed 2.8% in the next five years, while population growth expected during this period will be 5.8%. A great number of new jobs will be created ahead of Expo 2020, that’s why the peak of demand for housing can be achieved starting from 2018, the report said.

And finally, all rumors and expectations took real shape after the official report by Dubai Land Department was published last week. In contrast to the forecasts and analysts' estimates, all the data presented by Department are based only on facts, so there are serious grounds for the forecasted market uplift in the mid of the next year, as indicated by DLD.

DLD report has recorded 33 907 real estate transactions totaling over USD 50 billion in the first nine months of 2015 in Dubai, which means that none of the previous quarters did show a marked slowdown in the housing market over the last two years.

Foreign investors also showed an exceptionally high activity rate, according to the DLD: 132 nationalities invested about USD 12.5 billion in the Dubai real estate over the last nine months.

Besides, DLD has also promised not to raise the registration fee in Dubai in the coming years. And that's not all good news. Many developers offer paying the whole fee (4% of the transaction value), or the half of it (2% of the transaction value) for their buyers. Several large developers have already joined to this special offer.

Market participants’ common conclusion concerning Dubai’s property future is clearly positive. Dubai housing market is moving towards sustainable growth, having used all the recent falls in prices to its own good.

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