Key trends for Dubai property market in 2016

31.01.2016
Dubai has it all to succeed as an international real estate investment hub in 2016, experts predict.

Last week JLL, Knight Frank and a couple of other leading consultancies revealed its forecast for the main top trends to shape UAE real estate market in 2016. A shift to greater office property rental demand, reduced capital outflows together with a return to the price growth at the end of the year due to expansionary budget are among the most important trends to name a few.

Experts from Deloitte consultancy concluded that over the past 13 years Dubai has experienced development on a scale and to a standard like no other real estate market globally, and Knight Frank in its latest report emphasized that Dubai had become a city of superlatives over the last 15 years. That is why it is time now for the emirate to reap the harvest in the field of investors demand for business accommodation and residential units on part of the new population.

As for the office property demand there will be a trend towards more mixed use office led developments, Deloitte predicts, and a greater allocation of space to amenities, which will enable schemes to differentiate against competition. And among business locations Dubai tenants will probably seek for perfectly fitted quality units in such developed Dubai areas as Jumeirah Beach Residence and Dubai Marina. And it refers also to the residential sector.

Presenting its new signature development 1/JBR Dubai Properties last week Dubai Properties has stressed out that JBR on the whole is a niche development representing a well-established destination that enjoys relatively stable market prices to position against. Besides, JBR and Dubai Marina saw a mere decline in property prices last year of about 2-3% pa marking its stable position at the market.

Global investors’ interest to Dubai’s luxury property sector is another trend expected to come forward in 2016, experts from Chestertons MENA forecast. Luxury properties in Dubai prime areas like Dubai Marina, JBR and Business Bay are seen as long term trophy assets and current prices are highly attractive for global investors. Furthermore, regional tensions have also attracted luxury property buyers from other parts of the Middle East. That’s why an exceptionally favorable outlook for Dubai luxury properties in 2016 is another up-to-date market trend.

Rental yields are a main reason for international investors to head in for Dubai. According to the recent Land Sterling report, Dubai guarantees world’s highest property rental yields, while rental income here is not taxed. Up to 10.6 % of rental return is a highest rate in the world and an everyday reality in Dubai. Affordable properties are in greater demand, while high-end luxury units in central locations can bring up to 8.10% of rental income.

Among other market trends forecasted by JLL there are also providing of ‘build-to-suit’ schemes as a way of funding new developments and a substantial supply shortage as a means to regulate market prices. And a joint study by Reidin and Global Capital Partners predicted that property prices will return to previous growth pace by the end of the year due to the Dubai's budget expense increase by 12%.

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