All eyes on Dubai rents. Weekly Dubai real estate news digest. Issue 87

01.03.2015
All eyes on Dubai rents
Welcome to the eighty-seventh 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 87 |  March 1, 2015

All eyes on Dubai rents


The UAE property market has been making waves internationally as Dubai hosts its property exhibition in London. Shedding light on some of the emirate's upcoming mega projects, the exhibition has been successful in attracting investor attention. 

According to Sunil Jaiswal, a British property investor who is organising the show at Olympia, the emirate's tax-free status is one of the biggest attractions. Statistics by the Dubai Land Department showed there are around 19,000 Britons who have invested in property, spending around 1.6 billion GBP during 2014 alone. Britons are third on the list of top investors in the market, beaten only by Indians and Pakistanis. 

Another factor that has investors watching the Dubai market is the assumption that rents are set to fall this year. Increased supply of apartments and villas in Dubai during 2015 could result in a softening of sales prices and rents, according to a new Asteco report. Its Dubai Property Review 2014 Highlights & 2015 Outlook report said a further 12,000 apartments and 2,000 villas are set to come to market this year. A more significant fall in rents could be seen from 2016 onwards as large numbers of real estate projects are completed, the report added.

Not only are prices set to fall this year, but the UAE stock market appears to be picking up from its slump. Property companies have been topping the list of gainers recently. In the past month, there has been a revival of oil price shares and a corresponding improvement in share prices across the markets.

 

Market Insight is aimed at examining the emirate's dynamic market and forecasting industry trends. With prices expected to fall, Dubai's property market has been attracting international investors, who have been waiting for any change in the current real estate situation. Most analysts agree that while the market will show signs of declining prices this year, major changes will be felt into 2016 as more and more projects are completed. 


Sincerely,

Pashma Manglani

Editor


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Dubai to build ME's first rainforest

A tropical rainforest is set to be created in Dubai as part of a luxury housing development, The National reported.

The Dubai Rainforest, described as an educational and cultural dome, will be housed within Damac Properties’ Akoya Oxygen master community and is slated to be completed ahead of Expo 2020.

It is designed to recreate the natural environment of rainforests, which cover 6% of the world’s surface, said the developer.

 

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UAE stock markets normalise

After months of crashes in the stock market, there is finally some good news for investors, The National reports.

While it may be too early to say that the market has recovered from the fall in oil prices, but there are signs that this is the beginning of a revaluation of equities in the emirates.

Financial professionals are coming to terms with the “new normal” in capital markets, as they are in oil markets, and starting to get on with life again. In the past month there has been a revival of oil price shares, and a corresponding improvement in share prices across the markets.

 

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Huge boost to supply expected

Rents are set to soften this year and part of the reason is the addition to supply in the market, Emirates 24/7 reported.

“A further 12,000 apartments will be added to the city’s existing inventory in 2015 as well as over 2,000 villas. This is good news for tenants across the emirate, and a more tempered rental environment is especially welcome when you consider that since 2011 apartment rents have increased by 65% and villas by 55%,” says John Stevens, managing director, Asteco.

The report, however, warns that any further increase in rents will make many areas “unaffordable to their target market leading to decreased demand and tenant outflow”.

 

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479 new units at MBR city

Even five years after the financial crisis, buyers in Dubai are wary of off-plan property purchases, according to Construction Week Online.

A biennial survey recently published by Dubai-based law firm Hadef & Partners called The Legal State of The Dubai Property Market found that 84% of respondents (of which there were more than 1,000) said they favoured investing in completed schemes over off-plan sales, with only 15% expressing a preference for off-plan.


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Emirates makes waves at London show

Dubai developers are busy making waves in London, reaching out to international investors, Gulf News reported.

Some of these developers are going further by sweetening their deals through incentives such as 0% agency fees and guaranteed returns, as well as offering up prelaunch prices on projects that have already had gone through an extensive sales phase here. One among their ranks, Texture Properties, is lining up free tickets to Dubai to those buyers at the show who put up 15% as down payment.


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DLD steps up real estate insurance measures

The Dubai Land Department (DLD) is studying new measures for real estate insurance in Dubai, Sultan Butti bin Mejren, director general of the DLD, was quoted as saying by Al Ittihad newspaper.

The new law will identify the various responsibilities of all involved and include payments and settlement of receivables in the event of accidents. Bin Mejren told Al Ittihad that the study will be finished within the next two months.


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