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As an increase in supply puts a downward pressure on residential rents, average rents will fall slightly in most areas. Combine this with rising pressure on yields and we can expect the average residential sale price to continue to decrease a little more in the coming year. This is certainly no cause for panic. The overall residential supply-demand is still near equilibrium.
The relaxing of rents will help correct the overzealous rent inflation that has been witnessed over the past two years, which, ultimately, improves affordability and ultimately plays an important part in strengthening long-term sustainability.
New areas popping up as popular destinations are giving previously favoured hotspots a run for their money and offering more than competitive rent prices. Take a look at Jumeirah Village Circle (JVC) thought by many to still be a total building site, but have a drive around there now and you will find some really great buildings finished to very good standards. A studio apartment there, brand new, with good finishing, pool and gym and shops close by, is priced under Dh60,000. Compare it to a studio unit on The Palm which will set you back at least Dh85,000. Of course, it is all down to location every time, but if budget is your priority, then there are now some great choices on offer.
For sure, we know that the Dubai real estate market is very much dependent on two very important factors – supply and demand. The demand for Dubai property, both locally and from overseas investors, still remains high and will continue to surge due to crucial factors such as foreign direct investment, the creation of new businesses in the emirate and more fundamental than anything, the Expo 2020.
The Expo will be a catalyst for development in the region with a number of mega projects and initiatives already underway in various sectors, including real estate, ensuring that the long-term outlook for Dubai’s profile as an international business hub remains in very high demand indeed.
Such factors will help to ensure that Dubai remains at the forefront of the property market.
* There are currently new property developments springing up in the emirate
* This gives local and international property investors more than enough choices
* Expo 2020 considered a catalyst for development leading to many projects
Source: Dawn Draper, Special to Properties
The writer is Managing Director, Pennington Real Estate LLC