The outlook for Dubai’s property market may not be as bearish as industry analysts have forecast, according to new data from Emirates NBD. Since late last year, there have been countless reports, warning against a second market crash. Meanwhile, other analysts argued that people should not expect a crash, but rather a stabilising of the market.
Now as we near the middle of the year, it's easy to see who was right. The outlook for Dubai’s property market may not be as bearish as industry analysts have forecast, according to new data from Emirates NBD. The Emirates NBD Real Estate tracker is a pretty comprehensive effort, based on survey data collected from real estate agents and households across the region.
A majority of householders expect rents and house prices in Dubai will continue to rise, survey data shows. Rising sales prices, sustained government capital expenditures, jobs growth and a growing population could keep rents rising, albeit it at a slower rate than previously, analysts at Emirates NBD said. Further signs of the dollar weakening, or of rising oil prices, could spur business confidence and lift the property market later this year, they said.
This contrasts with a 10% fall in rents in 2015 projected by the property consultancy JLL, and a 20% fall in sales prices projected by the ratings agency Standard and Poor’s.
Instead of a crash, the market shows signs of maturity, with the year 2015 being the year of affordable housing as developers tap into the demand of end-users. Mashreq said in its 'Wealth Gauge' report in March that real estate development with innovative payment plan was the need of the hour and back-loaded schemes especially for off-plan properties. MAG Property Development, for example, has revealed plans to build ‘MAG 5 Boulevard’, an integrated residential community in Dubai World Central residential district, adjacent to the Expo 2020 venue. Prices for studio units start from only AED380,000.
Property prices (more so apartments than villas) are stable or even rising in some parts, and rental values are definitely going up again in prime areas. Developers are moving ahead with new projects and investors continue to pour into the Emirates. Clearly, there is no second market crash. In fact, if anything, the real estate sector has only grown stronger.