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Tightening liquidity and project delays are among the trends that will shape the real estate market this year, according to investment and advisory firm JLL’s 2016 Top Trends for UAE Real Estate.
Alan Robertson, CEO of JLL Middle East and North Africa (Mena), said the UAE real estate market can expect more challenging conditions “as we begin to feel the impact of the continuing fall in oil prices and ongoing geopolitical tensions”, which would lead to reduced liquidity and pressure on government budgets. However, Robertson said the UAE is now much better prepared to meet these challenges. “While this overall scenario will naturally impact the UAE and wider GCC, the UAE real estate market is now better equipped to deal with such challenges than it has ever been.”
The vote of confidence was echoed by Craig Plumb, Head of Research at JLL Mena: “While prices and rentals will soften further in the short term, they are likely to increase again, perhaps as soon as 2017, as the UAE continues on its’ path to becoming a more mature real estate market.”
• Tightening liquidity
• Increase in build-to-suit (BTS) and sale and leaseback (SLB)
• Reduced outflow of capital
• Project delays to reduce risk of oversupply
• Productive Buildings
• Adding value to existing buildings
• Changing hotel landscape
• Emphasis on building safety
Asteco Dubai report
Real estate consultancy Asteco has flagged the impact of delayed project delivery in 2015 and a large pipeline for 2016, coupled with demand slowdown and low oil prices, as indicators of market prospects this year, with both rental and sales prices coming under further pressure and is likely to continue through to 2017. Around 22,000 apartments and 7,700 villas are scheduled to be delivered in 2016.
However, demand is likely to grow in the medium and long term in line with key infrastructure projects, said John Stevens, Managing Director, Asteco.
Source: Property Weekly