Demand heavy in Dubai
Recent reports have revealed the confidence in the UAE market. The country ranks among the world's top 10 in consumer confidence with an index reading of 107, far surpassing the global consumer confidence index at 94, according to Nielson's Global survey.
Foreign direct investment has also recorded a significant increase with the Emirates moving up to the 14th position in the latest AT Kearney Global Foreign Direct Investment Confidence Index, which indicates a positive sentiment for future flows.
Despite the fact that the market suffered a huge blow during the recession, real estate demand is back in full force, especially when looking at the commercial sector - specifically in the areas of Business Bay, JLT and Tecom. It is estimated that out of an additional office space of 500,000 sq. metres which could enter the market in the second-half of 2013, more than 50% of it will be in Business Bay, which is clearly emerging as a commercial hotspot.
However, it is not just the commercial sector that has been performing well. Areas that were once considered "affordable and budget locations" are now outperforming prime properties in terms of pricing. Sales transactions in Discovery Gardens have gone up by 88% in the first six months of the year and listed prices for studios are now between Dhs430,000 to Dhs500,000.
Leading property developer Emaar has also announced that it recorded double revenue from housing and land sales in the second quarter. Within three months, the company reportedly generated Dhs1.63 billion as compared to Dhs815.6 million in the previous year.
With demand not showing any signs of slowing down, experts are concerned whether Dubai is at the risk of entering another property bubble and that is one of the key topics lined up for Cityscape Global, which will be happening in October. Experts note that while regulatory reforms have provided a more transparent environment for investors, it is hard for authorities to place restraints on demand in a market where the majority of transactions are made with cash.
Market Insight is aimed at examining the emirate's dynamic market and forecasting industry trends. For this week, it's clear that demand is on the rise but this also brings with it some concerns. Opinion is divided on where the property market will move from here on now but we'll keep you updated on all the different points of views. Be sure to catch our next issue to find out more about the latest happenings in the property market .