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For both tenants and prospective property buyers in Dubai, there could be good news ahead.
A new update by Knight Frank, the property consultancy, reckons that property values could decline by between 5-10 per cent, while rentals are in line for an up to 5 per cent dip across the board. Based on its data for the ongoing market cycle, residential price growth entered negative territory in both the prime and mainstream segments in the third quarter-2014. Moreover, the price indices experienced a second consecutive quarterly decline in the final three months of last year.
Across last year, the total number of sales transactions for ‘mainstream’ residential properties in Dubai was down 41 per cent compared to a year earlier, according to Knight Frank.
“In 2015, new residential supply in the mainstream segment is expected to equate to around 5.5 per cent of existing stock”, states the report, which adds that in the prime segment — properties valued at Dh10 million and over — would show close to the 2 per cent mark.
That there will be more supply in the mid- to upper-middle properties represents good tidings for the broader market. Developers have come to the realisation that focusing solely on the top-tier will not do their chances too good in a soft market. Everyone from master-developers — Nakheel, Dubai Properties, et al — to individual developers are offering a mixed portfolio of projects to choose from.
“There are some areas that are in need of developments, and in those cases these projects could still be going forward such as Jumeirah Village where there still appears to be strong client interest in the community with plenty of work to be done,” said Thomas Bunker, Manager — Better Homes’ Real Estate Offplan Sales Division.
“There are a number of empty plots and infrastructure scheduled for completion in time as this area has lots of room for development. The Culture Village [in Jaddaf] is another area that, once it takes off, is going to be a popular community because it’s well located near the Downtown, the airport, Festival City, Dubai Creek, two Metro stations and the Business Bay Crossing.”
“As months pass, and the market picks up, and — of course — assuming prices remain stable, I believe potential investors will see great value in off-plan investments in the Dubai market.”
Source: Manoj Nair, Associate Editor, gulfnews.com