The real state of real estate: what’s behind the play in Dubai?

20.12.2015
Last week experts stepped forward with encouraging real estate statistics and gave reasons why Dubai real estate market's stability today is non-dependand on price fluctuations.

Reidin analytical portal was the first to cheer investors up with their statistics for the Palm Jumeirah villa sales segment, where 61 villa sale transactions worth USD 255 million were completed during nine months of 2015. Reidin also forecasted another prices upturn for these villas over the next 18 months, due to a "renewed interest and increased retail options to be ready before 2020".

On the other hand, a new report by CBRE unveiled a rather disappointing price changes statistics for the nine months of 2015 in Dubai. According to the consultancy, prices have fallen by as much as 14% in some emirate’s locations.

So, what gives ground to such different estimates by independent agencies having proved their reliability? What makes the leading consultancies with a decent and well-deserved reputation like JLL, Asteco and CBRE, reveal such controversial data and forecasts?

It turned out it's not just taking into account all the various factors such as double references to the same property unit double sales during the accounting period. It’s also the question of the over averaged statistics, while Dubai housing market latest trend is extreme spottiness in property prices ups and downs. This is a sign of stabilization, when some areas show a decline in prices and other demonstrate growth, while it all depends on demand.

Of the total summary reports number only official data given by state bodies, perhaps, deserve absolute trust. Here is another stability sign: five years after Tanmia initiative for the stalled real estate projects revival was launched in Dubai 51 project worth in total USD 3.2 billion was revived. Another governmental initiative, the Tayseer scheme helped to revive more than 40 real estate projects with 1100 housing units in total. USD 37.33 million had been secured under this scheme, DLD revealed this week.

These and other steps made by the Dubai authorities, including the demand for developers to create escrow accounts for the accumulation of the off plan property buyers’ funds, compulsory registration of all real estate projects at RERA, mandatory pre-purchase of land for development to start construction of the facility, as well as the demand for minimum 20% project’s completion before property sales can be launched guarantee peaceful future to Dubai property buyers and investors.

The truth about Dubai real estate market is that the future of the Dubai housing market is successful despite of any price fluctuations in the market, which are more indicative of the bare statistics rather than of the market actual situation, experts say.

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