Spirits high in buoyant market
Sentiments in the UAE realty sector have been shifting towards optimistic on the general scale of things. While rents and property value have been increasing over the past few months, many still feared that Dubai was on the verge of another property bubble. New regulations put in place by the government and a clear demand for new developments seems to have assuaged many of these fears.
In fact, UAE investors are definitely more interested in exploring the country's flourishing real estate market. A recent report even goes on to reveal that transactions by over 5,000 UAE investors in Dubai in 2013 surpassed the combined transactions made by seven major foreign investing countries, including Pakistan, China, Iran, US, Canada, France and Germany.
Many of these investors seem more concerned with top-quality rather than getting a discount on prices. Dubai has been listed among the top 20 most expensive locations in the world for high-end rental apartments sought by expatriates. "Dubai is the most expensive location for rental property in the Middle East. The cost of renting a three-bedroom increased by over 30% as demand across Dubai continued to accelerate this year," said ECA International, a human resources consultancy.
Developers, in the meanwhile, have been paying attention to these market trends, the latest being to focus in on the villa segment. "Taking a slightly longer term developer perspective, there is bound to be more - and sustained - demand for comfortably spaced villa projects," said Anand Lakhiana, a founding partner at Indigo Developers. According to him, with plot prices for high-rise development going through the roof and plot availability being very limited in certain areas, it just makes "sense" for a developer to shift focus from apartments.
Another area of potential has been the UAE's commercial sector, which has received a great boost during this period of economic recovery. Dubai Silicon Oasis has been pushing its way up in this front, offering a combination of a free zone and an attractive price point. It has also been announced that there will be an AED1.1 billion project in the area to build Silicon Park. The Park will be free of fuel-powered vehicles and operate on those running on electricity and would be the first integrated smart city.
Market Insight is aimed at examining the emirate's dynamic market and forecasting industry trends. Optimism and confidence in the UAE market is an all-time high, especially from local investors. As a result, developers are investing more time and money to launch newer developments in the city. We are following up on all the latest announcements and will be sure to highlight the most exciting new developments happening across the country.