Economists ‘pleasantly surprised’ by performance of Dubai property market
Following the global financial crisis, Dubai’s once-booming residential property market spent several years in the doldrums. However, the first quarter of 2012 has seen yet another change of fortune, as Susan Farrow, of Move One Inc, reports.
After the financial crisis of 2008, the Dubai property market faced massive losses, and investors didn’t show any interest in making property deals. Nevertheless, in the last quarter of 2011, the market finally started to show remarkable recovery, and regained its momentum.
Whilst countries in the Eurozone are still struggling to recover from financial crises, Dubai’s performance in the first quarter of 2012 has pleasantly surprised many economists. Property rents and sale prices have stabilised, and the future looks bright.
The residential sector displays mixed results. This is because of the rise in demand for premium properties in some areas of the city, while some other areas are still under pressure. Collective analysis of the real-estate market exhibits stability.
In a comparison report from 1Step Properties, current to the previous year, villa rents have increased by approximately 6–10%, depending on the area, and selling prices for villas have increased by 4%. The reason for the higher selling prices of villas is low availability of properties for sale in Arabian Ranches, Palm Jumeirah, and Emirates Living.
On the other hand, apartment rents demonstrated stability in most areas of the city. This is mainly because around 3,000 apartments have been added to the Emirate’s residential stock inventory in the first three months of this year. It is also expected that Dubai will see an additional 43,000 units built by the end of 2014, proving that the residential property market is moving slowly getting back on track.
In comparison with the residential real-estate market, commercial real estate showed considerably lower performance, with a decline of 2% in total sales of offices and commercial properties, mostly because of a falling off in business deals. Office rents declined by 1%. For 2012, experts have predicted a brisk improvement in the real-estate market.
As commercial landlords improve their properties to meet tenant demand, more foreign companies have started looking to open offices here, and landlords provide more incentives and flexibility to support them. These trends in the commercial real-estate sector will play a key role in developing Dubai’s image as a safe place for business.
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