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According to industry expert Jones Lang LaSalle’s (JLL) 2014 Q2 report, the Dubai real estate market is continuing on its positive trend of growth. While there has been overall growth within the residential sector, certain areas are showing signs of slowing down.
Compared to this quarter last year, when the residential market’s growth was still accelerating, Q2 of 2014 has seen its growth begin to slow down. JLL reported that the residential market is growing by 6% this quarter, down from 10% in Q1. This modest level of growth could be due to the series of regulations introduced by the Dubai government after the real estate market began showing signs of another boom last year.
Meanwhile, Steven Morgan, chief executive of Cluttons Middle East, in a report said that the mortgage cap and measures such as the doubling of the property registration fee to 4% and the ban of off-plan re-sales until handover have had a positive impact on the market behavior, and that “this has been reflected in the gradual slowdown in price acceleration, which we view as a normalization of the residential market.”
However, experts say there is still a strong demand from investors within Dubai real estate market especially residential, thus several new development projects have been announced. Many of the new projects launched in 2014 have a strong focus on sustainability and energy saving initiatives, in keeping with the increased regulations and green building codes put in place by the government with regard to new buildings.
Reports also reveal that there has been a significant reduction in the volume of residential units sold, particularly existing villas. This, therefore, suggests that secondary villa asking prices will decrease in the coming months. Sales have increased YoY for apartments by 23%, and rentals increased by 11% YoY. In comparison, the Dubai Residential Property Rent and Sales Indices have seen a much more substantial increase in the apartment residential market; apartment sales have increased 40% YoY and apartment rentals have increased 27% YoY
Handy Hints on Dubai Real Estate Market
• A JLL report revealed the residential market only showed 6% growth in Q2
• There is a significant reduction in volume of units sold particularly existing villas
• There is still a strong demand for houses thus the launching of new projects
Source: Nicholas Baker, Special to Properties
The writer is a freelancer