Dubai market sees slowdown. Weekly Dubai real estate news digest. Issue 93

Dubai market sees slowdown 
Welcome to the ninety-third 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 93 |  April 12, 2015

Dubai market sees slowdown 

House prices in Dubai fell slightly during the first three months of the year as thousands of new homes came on stream.

Apartment rentals witnessed decline in Al Nahda, Al Barsha, International Media Production Zone (IMPZ), MotorCity and Liwan; however, Jumeirah Lakes Towers, Discovery Gardens and Karama saw the greatest drops. Figures released by the property broker CBRE reveal that average house prices in the emirate fell 2% compared with the previous quarter after 16,000 new homes were completed during 2014. The news is the first confirmation that house prices in the city are set to fall significantly this year as new homes complete at a time when oil prices have slumped and the government’s plans to slow the market come into effect. 

Landlords in Dubai are likely to offer rent-free periods as new housing supply comes in, according to a global real estate consultancy. “The leasing market which has remained stable over the past three quarters is expected to witness increased landlord incentives in the form of rent-free period and other allowances, while rental declines are also likely in some areas,” said Mat Green, Head of Research & Consultancy UAE, CBRE Middle East, in the first quarter ‘Dubai Property Report’.

While rents may be coming down, investor attention in Dubai has not slowed down. In fact, potential investors from Iran have also started looking to Dubai as the place to invest after western powers reached a deal that should pave the way for an end to the crippling sanctions on the country. “In the last 48 hours, we have been taking calls from Iranian prospects who have sounded out the possibility on exposures in locations, such as the Downtown and for mid-tier properties elsewhere in Dubai’s freehold areas,” Juwaad Beg, CEO of Al Madina Al Raeda Real Estate told Gulf News.

Market Insight is aimed at examining the emirate's dynamic market and forecasting industry trends. It's clear that the market is slowing down, as predicted. Asteco, a real estate consultancy, said earlier that rents will not only soften in 2015, but a more significant drop in rental rates could be on the cards from 2016 onwards as a large number of projects announced in 2013/14 (an estimated 12,000 to 14,000 villa units) are completed.

Pashma Manglani


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Residential prices fall 2%

Residential prices in Dubai fell by two percent in the first quarter of 2015 as home deals slumped by 20 percent year-on-year, CBRE has said.

Its Q1 2015 Dubai MarketView report said more downward pressure on prices was likely for the remainder of 2015 as new supply enters the market. CBRE also said annual residential rental growth measured just three percent - a reflection of "more stable market conditions".


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'20% of prime property stands empty'

There's a new trend in town: affluent out-of-towners are buying up prime properties in urban centres.

According to a recent article in Newsweek, an American weekly news magazine, one in four apartments stand empty in the world’s top cities. Property experts in Dubai believe that around 15 to 20% of the emirate’s units are not occupied as they have been purchased by foreign owners either for investment or as a holiday home, Khaleej Times reported.

“Dubai does host a vast number of absentee owners, just like many other similar cites in the world that attract high net worth individuals,” says Andrew Cleator, luxury sales director, LuxHabitat, adding: “There are no recorded statistics for absentee owners, but in my opinion, I would safely say currently in the region of 20 per cent of properties, of which buyers mainly come from Europe, Russia, the GCC and to a lessor degree the Indian sub continent.”


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Nakheel plans $3.81b projects 

Dubai developer Nakheel has announced plans to implement projects worth nearly $4 billion over the next three years.

Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE, was briefed on the new projects worth AED14 billion ($3.81 billion) during a tour of Nakheel's head office, news agency WAM reported.

The project includes Deira Mall, which will be surrounded by about 16 residential towers, offices, four residential complexes hotels and upscale resorts. He was also briefed about the expansion project of Ibn Battuta. 


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Emirates Hills home among top villa deals

Emirates Hills, home to some of the richest in Dubai, has topped the list of the top 10 biggest villa deals for the first quarter 2015, reveals data shared exclusively by with Emirates 24|7.

Five transactions were reported in the upscale community, totaling AED223 million, with Palm Jumeirah accounting for the remaining five transactions, amounting AED145.59 million. In the Emirates Hills community, a AED60 million transaction topped the chart. 


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New project focuses on Karama

Dubai-based real estate firm wasl properties has announced the launch of "wasl hub" - a new mixed-use project in the Karama neighbourhood of the emirate.

When completed at the end of 2016, wasl hub will feature alley ways and paved temperature-controlled 'sikkas' in and around the residential and retail project providing a comfortable walking environment for residents and visitors even during the hot summer months.

wasl hub will include more than 70 shops and 32 restaurants and cafes. The project will also feature 312 apartments of one, two and three-bedrooms with parking.


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Iranian investors look at Dubai realty market

Potential investors from Iran have already started making enquiries about acquisitions in Dubai’s real estate, according to market sources.

Iran and world powers - US, Russia, China, France, United Kingdom and Germany - reached a framework nuclear deal at the weekend which should pave the way for an end to years of crippling sanctions on the country.

“In the last 48 hours, we have been taking calls from Iranian prospects who have sounded out the possibility on exposures in locations, such as the Downtown and for mid-tier properties elsewhere in Dubai’s freehold areas,” Juwaad Beg, CEO of Al Madina Al Raeda Real Estate told Gulf News.

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