New big analytical report by Core Savills, issued recently, examines the results of 2016 and the prospects for 2017, giving its evaluation of the current situation in the Dubai’s housing market.
Core Savills experts are generally at one with their colleagues regarding the confidence in the inevitable Dubai house prices uptick. However, the growth won’t be industry-wide or city-wide either, and changes are definitely going to take some time.
“Considering the current drivers and deterrents illustrated, we predict an uptick in Dubai sales prices in 2017,” Core Savills CEO David Godchaux said.
Core Savills’ outlook for 2017 can be called truly optimistic only regarding prime property market category. Here, we can expect a rise in sales prices by 2017 mid-year, Godchaux said. Limited supply on the background of stable demand, as well as innovations and improvements Dubai authorities made to the prime central areas’ infrastructure, can be regarded as the main triggers for a future uptick in prices:
“Although lagging in recovery, limited supply and sustained demand is expected to cast steady upward pressure on the prime segment by mid-2017,” Godchaux added.
Some sub-markets, however, are expected to show a downward trend, according to Core Savills: "We foresee few submarkets to underperform — particularly the affordable and low-mid market segment are likely to be negatively impacted by the large amount of pipeline supply. Nonetheless, this effect may relatively balance out with the overall positive market sentiment coupled with the fact that developers continue holding back stock to align demand with absorption.”
It is expected that up to 20,000 new housing units could possibly enter the market in Dubai in 2017, but only 19% of them will presumably be of the premium stock, while in 2016 this ratio was about 30 to 70 percent.
However, overall market activity, including even the mid-market segment, is expected to be high enough, according to Core Savills. Special demand for properties within the price range of AED 800,000 – 2 million in the high yielding districts, like that of Jumeirah Village and Dubai Sports City, is forecasted to eventually push transaction activity upwards.
And off-plan apartment projects, especially those nearing completion, will keep enticing end-user occupiers with the world’s highest ROI, like that of the Palm Jumeirah’s premium projects, particularly located on the island’s trunk, which are expected to see steady activity, also, due to better connectivity and access to newest infrastructure, including The Palm Promenade pedestrian zone etc.
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