Dubai property market sees spike in demand for residences

Demand for residences in Dubai Real Estate MarketYash Shah

The Dubai property market continues on its solid growth due to the increased confidence of buyers.

The luxury property segment is expected to see a surge throughout 2014, especially since many people believe that home prices will only continue to rise and, therefore, the homes they purchase now will be worth more in the future, again making real estate a “safe” investment option.

People from different parts of the world are moving to Dubai now, and new projects are coming up all over the city coupled with returning investor confidence.

Also, the rent increases throughout the region show no signs of decreasing; hence, more and more people are considering buying their own property in order to avoid this.

The consistency of increasing property values is the main determining factor for investing in luxury property.

This attracts sound prices during resale as the steep pricing of the property and its exclusive nature attract investors from different parts of the world.

Luxury properties also fetch huge returns, especially villas that boast rare features matching global standards and exclusivity in terms of community lifestyle, location and connectivity.

Dubai is always a very strong market for the luxury market segment.

Investors from different parts of the world, especially from the Gulf regions, are increasingly buying luxury properties in the city after the global financial crunch.

For those who show interest in buying this type of property, it is essential for them to understand how the luxury real estate investment scenario is changing.

Since the real estate sector is one of the most lucrative avenues for investing money, it can always ensure the value of the money spending for this purpose.

There are two main types of investors in the Dubai property market: international investors and end-users.

The international investors are still buying completed properties; however, the trend is to invest in off-plan properties as the yields will be usually higher and the initial investment lower.

With regard to end-users, it primarily depends on their time frame plus their cash flow.

If they are in the Middle East for a while and can afford to, they may well buy off-plan, rent for a while and wait for their homes. If they need a property immediately or if they have limited funds, they will choose complete properties.

Off-plan sales will continue to rise in the market, aided by more stringent regulations imposed by the Real Estate Regulatory Agency (RERA) on investments into escrow.

A number of new property developers are coming to the market with numerous new projects, so the prices will continue to stabilize for now as there is plenty of availability to sustain the ever-increasing demand.

The affordable housing segment has also turned into a lucrative niche segment catering to the needs of the low and middle-income earners.

Major players in the sector are now venturing into this segment to cover the growing demand.

As the economy is picking up and the population growth continues, developing affordable residential properties will increase the options for people.

This will also contribute to the diversification of the economy and the upgrade of infrastructure.

It is, therefore, crucial for the market to accelerate the delivery of affordable and middle market housing over the short to medium term to satisfy the current demand.

Source: Yash Shah, Property Sales & Leasing Manager, SPF Realty, Special to Freehold


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