Weekly Dubai real estate news digest. Issue 49

Dubai market remains bullish
Welcome to the forty-ninth 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 49 |  June 8, 2014

Dubai market remains bullish

The property sector in Dubai continues to outperform other markets in the region with a resurgence of off-plan sales, as developers woo buyers with attractive and easy payment options.

In a rapidly rising housing market, buying off-plan actually enables investors and home buyers to buy property at a lower price as opposed to the post construction phase, says Robin Teh, country manager, Director Valuations and Advisory at Chesterton Mena. 

Leading developers have been at the forefront of new launches in prime locations. Aldar Properties announced that it is mulling up to 20 new development projects. Meanwhile, Meraas Holdings' Jumeirah Gardens project, the biggest in terms of value, is estimated at $89.5 billion and is due for completion in 2021, followed by Dubai Holding's Dubai Land development, valued at $61 billion with a completion date set in 2020. 

The ongoing $16.7 billion Dubai World Central development that will be completed in 2030 comes next, followed by Limitless' Downtown Jebel Ali project, estimated at $14.6 billion set for completion in 2020.

Other landmark projects include the ongoing Business Bay project, currently valued at $11.2 billion, which is expected to be fully completed within two years. Mohammed bin Rashid City, which is being developed jointly by Dubai Holding, Emaar and Meydan Sobha, is valued at a cost of $11 billion and will be ready by 2023. Emaar's Downtown Dubai development project is just another example with a budget of $10.9 billion and expected to be ready for completion by 2020. 

Lower off-plan prices, economic stability and better liquidity in the market are key factors driving the resurgence of the market, Robin said in a report. The sheer volume of projects in development "clearly reflects the positive sentiment in the investment scenario of the economy which is expected to continue in medium term."

Market Insight is aimed at examining the emirate's dynamic market and forecasting industry trends. While growth and development continue on a positive trend, Dubai home prices slowed in the first quarter after financial authorities took steps to cool the market. With banks increasing exposure to the UAE's booming real estate industry, it's clear that the general view is that this time things will be different. 


Pashma Manglani


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Prices cool as measures take effect 

Dubai home prices, which rose the most in the world over the 12 months through March, slowed in the first quarter after financial authorities took steps to cool the market, broker Knight Frank LLP said.

Values gained 3.4% in the emirate, slowing down from 9.2% a year earlier and putting Dubai behind Lithuania, Estonia and Malta for the quarter, London-based Knight Frank said in a statement. Dubai homes climbed 27.7% during the 12 months through March, sparking concern that a bubble was forming.


Read more on The National

Real estate projects top $123b 

New data published by business intelligence service MEED has revealed that 744 individual real estate developments are currently planned or underway in Dubai with a combined budget value of US$123 billion.

The latest data from MEED's project tracking database, MEED Projects, shows that the combined value of the top ten biggest projects planned or underway is is US$50.5 billion. 

The biggest individual project currently planned is the US17.7b Lagoons project being developed jointly by Dubai Holding and Emaar Properties as part of the US$32b Mohammed bin Rashid City mega project.

Many of the individual projects form part of much bigger master plans. When including the overall project masterplans, MEED's analysis reveals that there are 566 real estate projects with a combined value of $464b. This includes real estate developments such as the Dubai Government's US$7b Expo 2020 masterplan as well as hundreds of standalone developments.


Read more on AMEInfo

Infrastructure gives Dubai decisive edge 

The pace of transactional activity in Dubai's realty space may have slackened in the last give months, but there is still enough going around to keep Gulf-based investors interested.

A significant plus is that Dubai has the ready properties - cutting across all categories - for investors to pile in.

Recently, PineBridge Investments Middle East completed the first close of a GCC-targeted real estate fund  after raising more than $140 million. It is targeting an eventual close of $200 million. The first investment was in a property housing a school in Dubai. Other real estate categories in the emirate are being looked at.

"There are a number of opportunities to invest in specialist real estate assets that generate stable returns and unlock capital for business owners in the GCC," said Talal Al Zain, CEO of Pinebridge Investments Middle East. "The target sectors - logistics, social infrastructure and community retail - are key contributors to economic growth and development of the region as well as job creation."

Read more on Gulf News

Apply now for holiday home license

Dubai homeowners who are willing to leverage the emirate's growing tourism market and the Expo 2020 rush have finally got a legal route to listing their homes as holiday homes. 

Dubai's Department of Tourism and Commerce Marketing announced in a statement that Dubai homeowners who wish to rent out their property as a holiday home will be required to use the services of a licensed operator, with their property becoming part of the operator's portfolio.

The announcement follows the December 2013 issuance of Dubai Decree No. 41 of 2013, concerning the regulation of the Holiday Homes Market. From June 15, 2014, the operating of residential properties for use as holiday homes will be restricted to licensed operators only.

Read more on Emirates 24/7

Banks open up to UAE's booming property market

Banks are increasing exposure to the UAE's booming real estate industry and betting that, five years after property values slumped and non-performing loans soared, this time it will be different.

Lending to the construction sector climbed 40% to AED181 billion last year, according to the latest central bank data - the highest figure since 2008 when loans jumped 81%.

Banks' non-performing loans grew to between 10 and 12% in the 2008 credit crisis as property prices crashed by more than half. Real estate values in Dubai increased at the fastest pace in the world last year, while bank lending growth accelerated to the quickest in five years.

Read more on The National

Group plans to invest AED300m in projects

Dubai-based diversified group Mostafa bin Abdullatif Holding is expanding its real estate portfolio by investing AED300 million in new projects in the emirate, according to its CEO.

Hamdan Ali Mostafa said the group will be investing in three residential and one commercial project this year. "Some are for the rental market and some as freehold. [The projects] will be announced in the next six months," he said.

According to Mostafa, there is still room for growth in the emirate's property market and chance to make money. 


Read more on Emirates 24/7

New realty firm on the block 

Nakheel recently announced that it has signed a Letter of Intent with Germany-based real estate brokerage company, Engel and Volkers (E&V), to create a new company specialising in selling and leasing properties in Dubai.

Trading under the E&V brand, the new company expects to open its Dubai office on October 1 this year. Nakheel also said that the new joint venture will help in enhancing services to Nakheel's new and existing customers and further expanding its diverse range of property-related business activities.

Nakheel is looking to hire 250 estate agents to work for the new company. 


Read more on Gulf News

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