Dubai realty market in flux
It's been a busy month for the real estate market in the UAE. New projects, increasing rents and added investor interest have all contributed towards creating a buzz in the sector.
Profit-taking was particularly heavy in the UAE with Dubai's index falling 2.4%. Emaar Properties sank 3.9% after reporting strong second-quarter earnings that failed to deliver a positive surprise. Trading volumes in Dubai have been modest since the market reopened at the end of last week after the long Eid break. However, stocks have been picking up. “This was a good set of results. Emaar showed its traditional strengths – it’s good at retail, good at hospitality, and its core profitability was strong,” said Loic Pelichet, who covers Emaar for NBK Capital.
Residential rents in Dubai saw a 0.16% month-on-month hike in June, according to data issued by Reidin.com. This clearly shows a slowing down of growth, something that has been a cause for concern for industry players. In fact, the realty market is expected to peak in 2015, according to Masood Al Awar, CEO of Tasweek Real Estate Development & Marketing. "We do a lot of analytics and we do a lot of market research. We know that every eight or seven years, there are some disturbances in the market and nothing can climb so rapidly."
Meanwhile, when it comes to new projects in the market, UAE developer Tiger Properties has announced the launch of its latest construction project in Dubai, Al Manara Tower. The residential complex is being built in Jumeirah Village Circle at a cost of AED200 million. The conglomerate Danube has also announced a presence in the sector, launching a real estate arm. One of its first projects include an AED500 million development - Dreamz - which will feature 175 townhouses within the Al Furjan community.
Market Insight is aimed at examining the emirate's dynamic market and forecasting industry trends. It has become quite apparent that investors today have increasing demands from developers and these are being addressed in the newer projects under construction. "With the restored investor confidence in the real estate market, competition between developers is fiercer than ever and the emphasis on excellent design couldn't be higher," says Rod Stewart, property managing director of Atkins. How this will affect the direction of new projects is something we all just have to wait and see.