A dynamic property market. Weekly Dubai real estate news digest. Issue 92

A dynamic property market
Welcome to the ninety-second issue of Market Insight, your weekly guide to what's happening in the Dubai real estate market.
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MARKET INSIGHT. Weekly guide to Dubai's property scene
Issue 92 |  April 5, 2015

A dynamic property market

Residential rents in Dubai rose 3% in the first quarter of 2015 (compared to a decline of 1% in the fourth quarter of 2014).

A report by chartered surveyor and property consultancy firm Land Sterling revealed that rental correction will eventually set in with a number of project handovers scheduled throughout the year, especially in communities such as Dubai Sports City, Jumeirah Village Circle and Business Bay. 

At the same time, developers are seeing demand continue to rise from investors. According to the managing director of Damac Properties, Ziad El Chaar, sales hit AED2.8 billion in the first three months of the year, mainly as a result of robust demand from foreign buyers. According to him, the emirate's lack of taxes on inheritance, rental income and capital gains continued to attract attention. 

Meanwhile, Dubai Properties said that it had sold all its four-bedroom townhouses in its upscale Mudon development in Dubai, following strong demand at the International Property Show 2015. Launched during the second half of last year, the 120 units ranging from 3,786 to 3,800 square feet were sold out during the event, the developer said in a statement.

Another new residential development has also been launched this week, this time in the Al Barari estate. The Nest includes 99 four-bedroom villas set in a foreign environment. "We now have a full spectrum of homes available, offering a choice for everyone from stylish apartments for couples through to spacious villas for families. The Nest bridges the gap between our different properties, offering well-appointed, more affordable lush living for families," said CEO Mohammed Bin Zaal. 

Market Insight is aimed at examining the emirate's dynamic market and forecasting industry trends. With developers pushing their projects forward, it's apparent that demand continues to increase, especially that from foreign investors. At the same time, it's interesting to note that the sector has evolved so that developers are thinking about long-term market needs: especially that of affordable housing. It's clear that Dubai has made a place for itself in the global investor marketplace as it gets ready to host the Expo 2020.  

Pashma Manglani


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International City boasts lowest rents in city

International City offers the lowest rental rates in the emirate, according to a new report.

Current rents for studio units average at AED38,000 per annum (pa), one-beds AED53,000 pa and two-beds at AED70,000 pa. 

Real estate consultancy Tasweek said rents in Dubai remained stable in the first quarter of 2015. “The first two months of 2015 saw continued stabilisation in Dubai’s residential sales and rental markets. Transactions slowed down 20% in January and 17% in February compared to the same months in 2014."

“This indicates consumer patience and growing confidence for the future,” it added.


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'Property sales remain strong'

Dubai developer Damac Properties posted strong property sales in the first quarter thanks to robust demand from foreign buyers, its managing director told Reuters.

Sales hit AED2.8 billion ($762 million) in the first three months, Ziad El Chaar said. He said sales in the first quarter of this year were higher than the fourth quarter of 2014.

Chaar said the momentum in the property market was being driven by foreign buyers, both those living in Dubai and abroad. He said the emirate's lack of taxes on inheritance, rental income and capital gains was attracting interest.


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Luxury rentals stand their ground

For investors it still makes sense to invest in Dubai’s luxury properties, with the city recording the second-highest increase in rental value gains for its high-end units after Tokyo for 2014.

Over a 12 month period ending December last, rentals were up by an average 8.1%, according to a Knight Frank, which also found that Tokyo’s gains were around 11.1%.

By the looks of it, rentals for luxury property in Dubai seems impervious to any downward pressure. For that matter, the city’s tenants would say such is the case with all of Dubai’s rental market — high and low.


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Emirates eyes affordable housing for future

“We can’t just keep building wider roads, bridges and tunnels,” Abdullah Rafia, the assistant director general of engineering and planning for the Dubai Municipality says. “Affordable housing is the solution to the mobility problem in Dubai.”

“Rents and the high cost of living, if not addressed, will discourage future companies from relocating here,” Martin Cooper, the Dubai-based director of Middle East property at Deloitte, told Bloomberg news. “They need to start addressing it now, because affordability is increasingly becoming an issue even for those with relatively high income.”

Among the steps taken or under consideration, the government says developers should designate 15 to 20% of their projects for low-cost housing. For now, “we are keeping it optional”, Rafia says. “After a few years, if it’s needed, we’ll go with regulations that are compulsory for everybody.”

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Apartment complex linked to Dubai Mall 

Emaar Properties has launched its newest residential project called ‘Downtown Views.’

With Downtown Views overlooking Downtown Dubai, Emaar is offering the opportunity to own residences that are directly linked to The Dubai Mall.

Downtown Views is located on a nine-storey podium that is part of the ongoing expansion of The Dubai Mall. It will feature 1, 2 and 3-bedroom apartments as well as a collection of duplexes at the highest levels of the 55-storey structure.


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New green community launched in Al Barari

A new residential development at the Al Barari estate, a green community in the Dubai desert, has been launched on Wednesday.

The Nest includes 99 four-bed villas set in a forest environment, Arabian Business reported. The villas will be available in two styles that offer subtle differences in layout and lifestyle, but both include floor to ceiling windows and a contemporary aesthetic.

“The Nest is the last piece of the residential puzzle at Al Barari, making it a viable investment and place to live," CEO Mohammed Bin Zaal said.


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