Booming ahead of the rest
According to a new report, the region's ultra-wealthy hold more than a quarter (26%) of their wealth in real estate, more than the global average of 19%.
Real estate now accounts for around a fifth of the invested wealth of the nearly 200,000 super-rich individuals in the world, according to new analysis from international real estate advisor, Savills, in association with Wealth-X, an intelligence provider no the world's ultra wealthy. These figures are significant in their magnitude when compared to global peers.
Private wealth is increasingly shaping the world's real estate markets and the use of private equity in major property deals worth at least $10 million has nearly trebled since 2009, says the report titled Around the World in Dollars and Cents.
The Dubai-based classifieds website Dubizzle released its 2013 UAE Real Estate Price Trends Report, which offers an overview on the shifts in prices for rental and sale properties from January to December 2013. Established communities are experiencing a substantial price rise. JLT, for instance, has seen 41% increase in price for a 1-bedroom apartment, now being advertised for approximately AED1.2 million as opposed to AED850,000 at the start of last year. Overall, property prices and rentals have increased by up to 50% in some areas of Dubai, such as Jumeirah Village Circle, Tecom and Dubai Sports City.
Demand is predicted to continue its upswing as well, if a local expert is to be believed. According to Samir Munshi, managing director, Orion Holdings, there is a shortage in the market currently. He asserts that residential property prices and rents will continue to rise in the coming years as demand will exceed supply.
However, on the other hand, others argue that there is a gap widening between what sellers are demanding and how much buyers are willing to pay - at least in some areas. Mark Wellman-Riggs of the Crompton Partners Estate Agents says that sellers are holding out for prices that do not reflect bank valuations in areas like Marina.
Market Insight is aimed at examining the emirate's dynamic market and forecasting industry trends. With optimism high and prices continuing to soar, Dubai realty is certainly outperforming other markets. The key driving factor has been investment that continues to pour in from residents as well as overseas professionals. The problem, of course, lies in the fear that speculative behaviour will trigger another bubble. However, with continued efforts by the government to curb this, there is confidence that the market will come out stronger. We continually monitor analysis reports and market news to ensure our readers are made aware of the latest happenings as and when they happen.