Weekly Dubai real estate news digest. Issue 27

Reaching for the sky 
Welcome to the twenty-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 27 |  January 5, 2014

Reaching for the sky 

The UAE is set to witness a strong return on investments in the range of nine to 12 percent per annum, which will serve as a major attraction for investors. With the market picking up at the same time, the realty sector is on a very strong growth trajectory, according to research carried out by Tasweek Real Estate Development and Marketing. 

The Tasweek study revealed that the UAE's real estate sector contribution to the country's GDP would touch AED111.4 billion in 2013, which is expected to go up to AED118 billion by the end of 2014. In 2009, the sector's contribution to GDP was AED99 billion. Dubai Investments has also announced that it expects AED800 million in net profits for the year 2013. The 148.9% projected net profit increase has largely been driven by the company's real estate and financial portfolio. 

"2014 will mark a major change in the growth of the UAE real estate sector, especially that world economic recovery started with the Eurozone comeback and US housing growth pushing the mortgage lending and interest increase - all of which will become more robust and sustainable," said the study. 

As investments continue to increase, property prices in the emirate continue to soar. In fact, prices have gone up by over 22% in the year 2013, according to research carried out by Reidin.com. Apartment sales prices registered an increase in November of 2.9% month-on-month and were up by 24.5% on an annual basis. Apartment values in Burj Khalifa have outstripped freehold units across the city with asking rates at or around AED4,000 a square foot. 

Market Insight is aimed at examining the emirate's dynamic market and forecasting industry trends. The year 2014 is set to be a game-changing year for the Emirates with rising property prices and rents, increased investment in the real estate sector and new developments being launched in preparation for the city to host the Expo 2020.  We hope our round-up of key stories and expert opinions have helped outline the changes that we are bound to see in the coming year. We will continue to analyse the latest developments and ensure to keep our readers updated on the direction the market is heading. 


Pashma Manglani


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Burj Khalifa towers over local realty

Properties in Burj Khalifa are lording it over Dubai's property market, both literally and figuratively. Apartment values at the world's tallest high-rise have outstripped those at freehold units across the city, with asking rates at or around AED4,000 a square foot.

According to data by Cluttons, current prices at Burj Khalifa is averaging AED3,750 a square foot while elsewhere in Dubai it is AED1,359 a square foot. In 2013, prices have risen by 25%, says Steve Morgan, head of Cluttons M.E.

Even then, today's asking rates are still way below the staggering peaks they had touched - AED9,000 a square foot in August 2008. Asking rates should soar further, according to market analysts. 

Read more on Gulf News

Rents up 16%

Property prices and rents in Dubai jumped by 22.4% and 16.6% respectively in the year 2013 to November, Reidin.com indices reveal.

The index that measures the average change in house prices in certain districts and communities of Dubai showed prices rising 2.44% in November compared to October. On an annual basis, prices were up by 22.4%. 

Apartment sales prices registered an increase in November, increasing 2.9% month-on-month and 24.5% year-on-year. Rents on the other hand, increased by 1.33% compared to October and surged 16.6% compared to 2012.


Read more on Emirates 24/7

Costliest villas sold in Emirates Hills  

The costliest villas in Dubai were sold in Emirates Hills in 2013, with nine of the top 10 transactions taking place there, data shared by Reidin.com reveals.

The biggest villa deal took place in Emirates Hills, which sold for a whopping AED67 million in 2013. The transaction, registered in September, saw the buyer paying AED2,692 per square feet.

Of the top 10 villa transactions registered by the Dubai Land Department, nine were in Emirates Hills and one was on the Palm Jumeirah.  

A villa sale in Palm Jumeirah took the second spot on the list with the buyer paying AED55 million or AED4,105 per square feet. 

Read more on Emirates 24/7

Burj 2020 project on track

Dubai Multi Commodities Centre (DMCC) will engage service and utility providers in the emirate by early next year to ensure timely and successful completion of Burj 2020, the world's tallest commercial tower.

"We will be engaging with service providers such as the Dubai Municipality, the Roads and Transport Authority and the Dubai Electricity and Water Authority in early 2014 to ensure a successful and timely delivery of the Burj 2020 and One JLT projects," said Ahmed Bin Sulayem, executive chairman, DMCC.

"We are building the tower from the inside out. Efficiency is the key...it will be the most efficient high rise in the world," he noted.


Read more on Emirates 24/7

Marketing gimmicks back

Property investors are being offered exciting incentives to make the jump into Dubai real estate.

Buyers of penthouses in Damac Maison, The Dubai Mall Street will be given a 2014 Lamborghini Aventador as part of the company's Dubai Shopping Festival (DSF) promotion.

Meanwhile, buyers of a penthouse in Burjside Boulevard or the signature collection at Ocean Heights are being offered a 2014 Audi R8 worth AED500,000 by Damac Properties. 


Read more on Emirates 24/7

Dubai Investments expects AED800m profit 

Dubai Investments expects to announce in excess of AED800 million in net profits for 2013, Khalid Bin Kalban, chief executive officer of Dubai Investments, told Gulf News.

He said the projected 148.9% net profit increase was largely driven by the company's real estate and financial portfolio. In 2012, Dubai Investments reported AED321.4 million in net profit. Its portfolio includes Dubai Investment Park, building materials companies including Emirates Glass and Abu Dhabi Investment House.


Read more on Gulf News

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