Growth spurt despite warnings
With several high-profile developments underway, the UAE's property market witnessed at least a 30% rise in apartment rental prices in the past year based on data from Dubai-based intelligence firm Reidin.com.
The Mall of the World development is the latest of all these changes - a $6.8 billion project that will see the world's largest mall constructed with more than 743,000 sqm of leasable area. "We are confident of our economy's strength, optimistic about our country's vision and we continue to broaden our vision," said Sheikh Mohammed bin Rashid Al Maktoum, UAE Vice President and Prime Minister and Ruler of Dubai.
Concerns grew over the past month when Dubai's leading builder Arabtec saw shares plummet in June following the resignation of its CEO. However, in the past week, the emirate's stocks rose to the highest level in over five weeks. The benchmark DFM General Index jumped 1.9% to 4,858.29 on Tuesday - the strongest level since June 8. Arabtec, the UAE's biggest publicly traded builder, added 1.9% to AED4.95, taking a rally this month to 90% and making it the best performer on the MSCI Emerging Markets Index.
With concerns mounting, the International Monetary Fund had encouraged Dubai to add new measures to control the property market. However, the Dubai Land Department has said that there are no plans to increase property registration fees. Sultan Butti Bin Mejren, director general, said the market is stable and appears very healthy. According to him, this is because of the recovery of real demand for the various types of units by investors and tenants. He explains that all parties are working with a clear vision based on long-term objectives and in accordance with the laws.
Market Insight is aimed at examining the emirate's dynamic market and forecasting industry trends. An impressive resurgence by Arabtec lifted Dubai's index three weeks after a selloff ended the bourse's longest rally since 2005. Developers across the emirate also continue to announce new projects, including an AED2.3 billion mixed-use project in Dubai Investment Park. While experts continue to call for added measures in the market, there has been no official comment as to what action will be taken to further protect the realty market but we are sure to hear more about new regulations in the coming months.