No dramatic drop for Dubai real estate market

Diversification named the key stone to real estate market in Dubai: Q2 first analytics.

Last week there was no lack of analytical reports covering different aspects of the housing market in Dubai. Dubai Land Department was the first to present its summary statistics, according to which the emirate Q1 real estate market performance indicators seemed to be quite satisfactory: Q 1 2015 real estate transactions total amount in the emirate reached US $ 17,4 billion. During this period about two-thirds of real estate transactions in Dubai were carried out using mortgages provided by banks, which is also a criterion for a healthy system functioning.

Department report figures, according to its CEO, Sultan Butti bin Medjren, indicate a high level of confidence of both foreign and regional and local investors in Dubai housing market. Tasweek CEO Masood Al Awar also pointed this fact out in Tasweek’s first Q2 overview report. Investor confidence, together with population growth, regulatory support and, most importantly, the economic diversification of the property sector will be the main leverage for a further rise of the real estate industry in Dubai, said the report.

Dubai property market diversification as a whole was a central subject to most of the analytical reports presented last week. Developers have shifted their focus from the quite narrow segment of luxury housing and commercial property to other segments of the real estate market requiring support, particularly the affordable housing segment. Affordable housing sector expand will be the main subject for the world's first real estate exhibition entirely dedicated to this market segment. Its organizer Worldsouq plans to bring the Show to Dubai in early autumn.

Investor’s confidence and foreign investors’ growing interest in Dubai real estate also gave an impetus to the Cityscape Global expand this year. The number of exhibitors having already confirmed their early registration to the show increased by 30% this year.

The positive nature of the prospects for further market development is also confirmed by a London Business School latest survey. According to this study, the results of which were presented last week, 47% of businessmen do not change their plans to invest in real estate in Dubai, and 84% of the 200 survey participants are confident that severe recession and prices decline don’t threaten Dubai’s development in the near future.

Thus, on this general optimistic background, Q 2 statistics report by Tasweek, according to which house prices in Dubai declined by 5-10% for the quarter in different segments, doesn’t look too disturbing. Especially since the real estate sector as a whole "exceeded all expectations" in terms of Q 2 development, according to Tasweek experts. And the final judgment concerning Dubai real estate market’s further stabilization and maturing will depend on the year second half results, which promise to be the most important indicator of the Dubai’s future development till 2020.

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