Weekly Dubai real estate news digest. Issue 82

25.01.2015
Growth in a stable market
Welcome to the eighty-second 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 82 |  January 25, 2014

Growth in a stable market

For some, growth in the real estate sector has to be measured in increasing rents, greater sales and a frenzy for new developments. While there's no doubt that Dubai's property sector has slowed down, there are other factors to consider when measuring growth.

That Dubai is seeing a stabilsation in house prices is no news. Property agent JLL reports that Dubai apartment prices showed no growth between October and December 2014 and villa prices actually dipped by 1% in the final three months of 2014. 

The emirate's real estate crash was a result of a property bubble, with unrealistic increases being made to home prices and most purchases being made only to turn over a profit. Dubai has come a long way from that. In fact, the market has taken a very clear turn towards focusing on the needs of end-users as homeowners. Mohamed Alabbar, chairman, Emaar Properties, noted: 

"Dubai’s real estate market will be driven by homeowners, and not by speculators as in the past, and this is a great sign of a maturing market.”

At the same time, developers are fully confident that there will be continued demand for property in Dubai as populations increase ahead of the Expo 2020. The emirate is set to welcome 25,000 new units in 2015. Developers are also pushing ahead with their off-plan launches as scheduled, rather than waiting around to see prices increase. Reef Real Estate, on Tuesday, launched the 38-storey Reef Residence, which it says is the first tower project at Jumeirah Village Circle. In the first phase, units will sell for AED770 a square foot, and thereafter the “average blended price” would be AED885 a square foot. 

Market Insight is aimed at examining the emirate's dynamic market and forecasting industry trends. Undoubtedly, home prices are not increasing at the rapid pace they were early last year. However, developers are pushing ahead with new projects, confident that the demand will be there for these new developments as the country enters a phase of growth. It's evident that Dubai's real estate market has learnt that growth is possible, even in a market that maintains a sense of stability. 


Sincerely,

Pashma Manglani

Editor


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Home prices flatline: Report

Dubai is seeing a stabilisation in house prices, according to a new report.

Property agent JLL's reports revealed that Dubai apartment prices showed zero per cent growth between October and December 2014, as buyers continued to suffer from the introduction of mortgage caps by the Central Bank and a hike in transfer fees.

Average villa prices in Dubai dipped by 1% during the final three months of 2014, The National reported. In total though, apartment rents in Dubai rose by an average of 18% during the year and villa rents rose 5% with most of the increase again achieved during the first six months of 2014.

 

Read more on The National

'Market to be driven by homeowners'

With an increased focus on the preferences of home-owners, Dubai's real estate market will see a shift towards affordable housing, says Mohamed Alabbar, chairman of Emaar. 

In his exclusive 2015 Gulf Business Power Letter, Alabbar stressed that the emirate’s property market was seeing interest from a different set of investors. 

“With growth powered by the massive preparations to host the World Expo 2020 and the positive performance of Dubai’s diversified business sectors, demand for owned homes to live in, from a larger segment of the population, will gain traction,” he wrote. “Dubai’s real estate market will thus be driven by homeowners, and not by speculators as in the past, and this is a great sign of a maturing market.”


Read more on Gulf Business News

Off-plan launches move forward


Instead of waiting for market conditions to improve, developers in Dubai are moving ahead with off-plan launches, according to Gulf News.

Reef Real Estate, on Tuesday, launched the 38-storey Reef Residence, which it says is the first tower project at Jumeirah Village Circle. In the first phase, units will sell for AED770 a square foot, and thereafter the “average blended price” would be AED885 a square foot.

Meanwhile, other developers will be taking their cue for their own launch plans from the level of buying activity through the first quarter. Since the second half of last year, there has been a marked increase in off-plan project announcements. 


Read more on Gulf News

AED109b pumped into realty in 2014

Investor-led transactions in Dubai totaled AED109 billion last year, with UAE nationals leading in investments by GCC investors, according to a Gulf News report. 

The total number of buyers was 41,715 buyers. In 2013, AED114 billion worth of transactions had been recorded.
 
The value of non-Arab investments for 2014 amounted to more than AED64 billion through 29,098 transactions. Among foreign nationals, Indians again represented the single largest demographic among investors, with the size of their commitments totaling AED18 billion from 7,353 transactions. 


Read more on Gulf News

$816m Meydan project ready by 2017

Millennium Square, a first-of-its-kind semi-detached freehold luxury villa project in Meydan Dubai will be ready by 2017, Arabian Business reported.

The project, to be developed by G&Co at an estimated value of AED3 billion ($816 million), will offer freehold villas with prices starting at AED4,348,750 ($1,184,946), a statement said. 

The project will be handed over in the last quarter of 2017, according to the statement which added that off-plan villas will be sold on a 30/70 payment plan that allows the buyer to pay 30% in the first 12 months and 70% at the time of receiving the completed property.


Read more on Arabian Business

Emirate to get 25,000 new units

Dubai is likely to get 25,000 new housing units in 2015 with the residential property market remaining subdued, according to JLL. 

“The residential sector is likely to remain subdued over the next 12 months as the market is expected to absorb 25,000 additional units in 2015,” the consultancy said in Q4 Dubai market overview. 

The JLL report also noted a word of caution that some of these projects may not be completed within the time-frame. 


Read more on Emirates 24/7

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