Market gains

With the price correction and enticing off-plan offers, there are now plenty of  attractive propositions for homebuyersRobin The

Property buyers invested a total of Dh53 billion during the first half of the year, with Indians, Pakistanis and British topping the list. The luxury property segment remains a favourite among buyers; however, end users are also entering the market as rentals scale up.

Dubai properties have started to look attractive after a phase of price correction in the first half of the year, where prices corrected about 5-8 per cent quarter-on- quarter and approximately 15-20 per cent year-on-year. Buying property is now more attractive than renting, provided you can afford the down payment. Banks are also offering low mortgage rates from 2.3 per cent.

In terms of sales, luxury areas remain popular with buyers with the Palm Jumeirah topping the list with transactions worth Dh2.5 billion during the second quarter  followed by Dubai Marina with transactions worth Dh2 billion. Corrections in secondary areas have also made property affordable with a twobedroom unit being listed at Dh800,000.

Off-plan buyers can also choose from projects that are available at attractive prices and flexible plans, with most offering payment plans post-completion. It is  estimated that the property market has seen more than 100 launches over the past  two years. Developers such as Emaar have launched luxury off-plan units, while other developers have tried to capture the affordable housing segment, such as Nshama’s town houses and apartments.

Increased trade

Lower oil prices have had very little impact on the real estate sector till date. However, Dubai could potentially see the supplies being scaled back as developers become extra careful about spending amid ongoing uncertainties. However, a recent international agreement with Iran is expected to have direct benefits for the economy in terms of increased trade and business opportunities.

The International Monetary Fund (IMF) forecasts that $13 billion (Dh47.74 billion) will be added to the UAE’s economy by the ending of sanctions on Iran, as trade between the two countries steps up between now and 2018. That is equivalent to a 1 per cent gain in real GDP growth each year over the next three years, the IMF said in its annual report on the country’s economy. The Middle East Economic Digest estimates about $167 billion worth of energy projects planned or under way that will become available to international investors after the lifting of sanctions. These include the construction of a $4.5-billion gas project off Kish island and a $3.2-billion oil refinery in the west of Iran.

The commercial segment remained relatively stable as the market enters a stage of maturity. Rentals have stabilised over the past quarter. The sales market witnessed slight price correction primarily in the secondary market, with Dubai Silicon Oasis witnessing the highest price correction of about 4 per cent. The primary market remained unchanged with prices reflecting relative stability compared to the secondary market.

New projects

Freezones continue to add companies; Dubai Investments Park registered 436 new companies in the first five months of the year, taking the total number within the 2,300-hectare facility to nearly 4,500. The Dubai Chamber of Commerce and Industry registered 8,800 new companies, marking a substantial membership growth during first half of 2015.

The commercial market segment recorded transactions worth Dh1.4 billion in the second quarter, out of which sales transactions were about 60 per cent, amounting to about Dh850 million. July recorded the highest value of transactions amounting to Dh747 million. Dubai’s freehold office supply is concentrated in areas such as Business Bay, Dubai International Financial Centre and Jumeirah Lakes Towers. Business Bay, however, holds the largest supply of office space. It was envisaged as the biggest office district in the Middle East, with towers for offices and homes.

Dubai Municipality has also embarked on various projects to enhance the quality of life. Projects such as the new Dh299-million Dubai Safari Park, Dh269-million fish market and an iconic Dh160-million Dubai Frame are being built to bring added value to the lives of people living in the emirate. As part of the initiative to transform the city, the municipality announced that some 68 projects worth around Dh4.5 billion are currently either being reviewed, designed or implemented.

Overlooking the short-term fluctuations, long-term prospects remain positive, driven by the emirate’s safe haven status, mega projects and public spending, which are a critical part of the government strategy for continued economic growth.

Source: Property Weekly


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