Weekly Dubai real estate news digest. Issue 59

Sector continues to perform well 
Welcome to the fifty-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 59 |  August 17, 2014

Sector continues to perform well 

With the UAE's continuing economic growth, the country's real estate sector has received a massive boost over the past year. There has been an increasing interest from investors looking to purchase property in the Middle East. 

In fact, according to figures from the Dubai Land Department, GCC nationals invested up to AED19 billion in the emirate's property sector. Emiratis accounted for the lion's share of this figure with their investment totaling AED12.5 billion.  

“UAE investors made 2,513 transactions worth a total of Dhs12.5 billion in the first six months of the current year and in doing so, were placed at the GCC top spot well above all other investors in Dubai’s real estate market,” said Sultan Butti Bin Mejren director general of DLD. The Dubai Financial Market general index saw an increase of 1.6% on Monday, closing at 4,819.86 points. 

Leading developers in the UAE have also reported gains during the second quarter of the year. Damac, for example, said it recorded US$819 million in off-plan sales. Last week, Emaar reported that it experienced a 41% profit increase since 2013. 

As per a recent IMF (International Monetary Fund) report, UAE's economic growth is expected to be at 4.8% in 2014 and about 4.5% in the coming year due to the series of mega projects announced over the past 18 months in addition to the Expo 2020 win.

Market Insight is aimed at examining the emirate's dynamic market and forecasting industry trends. Things have been looking up when it comes to real estate in Dubai. The slight dip in shares (as a result of leadership changes in Arabtec) has started to pick up with renewed investor interest. Overall, most experts also agree that the emirate's market is more resilient this time around, expressing a positive outlook on Dubai's future. As CEO of Standard Chartered Bank Mohsin Nathani put it: "We are seeing a more robust market this time." 


Pashma Manglani


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Emiratis top investors in realty

The Dubai Land Department (DLD) said the total amount of GCC investment in Dubai’s property market for the first half of the year had exceeded AED19 billion.

Emirati investment formed the lion’s share, according to the DLD’s research and real estate studies department report, with UAE nationals making transactions worth AED12.5bn in Dubai’s property sector in the first six months.

“UAE investors … were placed at the GCC top spot well above all other investors in Dubai’s real estate market,” said Sultan Butti, the director general of the land department. “The figure indicates the great demand from UAE nationals in investing in property in Dubai, and sends out a reassuring message to all other categories of investor. In addition to strengthening confidence in the market, it provides solid foundations that will ensure its sustainability and long-term stability,” he added.

DLD’s report revealed citizens of Saudi Arabia were in second place on the list of GCC property investments after completing 1,121 transactions worth Dh3,371bn in the first half. Qataris had 113 transactions worth AED1,463bn, Kuwaitis made 263 purchases worth AED839 million and Omanis were in the fifth spot with deals worth AED482m.


Read more on The National

Damac records strong quarter, marks recovery

Damac recorded a strong second quarter ahead of its listing on the Dubai Financial Market and predicted it would deliver more than 4,000 properties by the year's end.

The company recorded US$819 million in off-plan sales, up 32% year-on-year.

Hussain Sajwani, the founder and chief executive of Damac, said: “customer demand for our luxury product remains high, and we strongly believe that the current real estate market in Dubai remains sustainable, supported by a structural and ongoing supply-demand imbalance for high-end property.”

Harshjit Oza, an analyst at Naeem Brokerage, wrote in a research note: “Damac [is] a growth story, given its Dubai exposure and a promising pipeline of projects within the high-end residential and hospitality sectors. We expect real-estate demand in Dubai to continue being resilient and view Damac as a key beneficiary.”

Read more on The National

Stock market revives 

Investors once again turned their attention to Dubai stocks after a quiet week, following rumours that they were deploying funds to the Saudi market amid preparations by the kingdom to open up the exchange to foreign investors.

“There was speculation in the markets here that people had closed their positions and moved their money towards Saudi stocks and that dampened activity in the market last week,” Khaldoun Jaradat, a stockbroker at Brokerage House Securities in Dubai, told The National. “But the market was good today and the activity has shown that the liquidity is still very much here.”

The Dubai Financial Market General Index rose 1.6% on Monday to close at 4,819.86 points. Construction and property stocks led the gains on the broader market.


Read more on The National

Outlook for industry positive: Bank

The general outlook for the UAE's banking sector and property market is positive, says Standard Chartered Bank CEO for the UAE Mohsin Nathani.

He welcomed the new regulations issued by the Central Bank of the UAE for the betterment of the industry, especially for the property market. “Our view is generally positive on the outlook over there,” he said for the sector. Citing an example of the property market at its peak time in 2007, he said: “We are seeing a more robust market this time.”

The increase in the transfer fee by the Dubai Land Department is an important step, he added. Regarding debt restructuring, he said that overall credit portfolios of banks are good and they are comfortable. “It’s not a worrying sign for the banking industry anyway,” he emphasised.


Read more on Khaleej Times

Ismaik nets nearly $50m from share sales

The former Arabtec chief executive Hasan Ismaik has earned US$48 million from the sale of shares in the company over the past month, according to The National. 

Ismaik's shares that were sold equate to 0.9% of the company and 4.3% of his stake. He has reportedly sold 41.8 million shares since July 23. He remains Arabtec’s largest shareholder, with a stake of 27.9% of the company. At current prices, his remaining stake is worth $1.36bn.
On Wednesday, Arabtec had a market capitalisation of US$5.02 billion as of the close of trade.


Read more on The National

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