Positive signs evident in Dubai realty

Positive signs evident in Dubai realtyImage Credit: Supplied

Dubai is showing the world how mature its real estate sector has become in a short period of time. While the global realty scene is going through a period of instability due to a number of factors, the Dubai realty market is showing positive signs. It offers buyers a superior rental return of 6 to 8 per cent, while other major cities sit on 5 to 6 per cent on average.

Recent industry reports indicate that Dubai's residential market demonstrates an upsurge in terms of prices as a direct result of the improving economic conditions and a relatively stable supply. The authorities in Dubai continue to invest in the economy and new mega projects in the city are dubbed tools to expedite that journey of growth. The visionary leadership of the nation is confident in the strength of the country's economy and is optimistic about the nation's future.

A recent report predicts a price escalation in the market in the near future. The analysis of the relationship between the Dubai real estate market, financial markets and global oil prices disclosed that certain trends are underway. There has been a low correlation between oil and real estate price action historically; albeit, the relationship has dramatically increased in the last six months as concerns have amplified the impact of oil prices on real estate activity.

According to the same report, there has been a moderately positive correlation between the equity and real estate market. This relationship has inverted during the last six to 12 months, as the equity market rebounded by more than 25 per cent from its lows. This suggests an imminent rise in real estate prices. Considering the current prospects for Dubai's property market, transactions are expected to gain momentum again throughout the last quarter and into 2017.

The Dubai Land Department's (DLD) latest transaction report demonstrates strong momentum since the beginning of the current year, with increasing growth month by month, indicating a positive correction in the domestic market. The report reveals that the first eight months of the current year have recorded a total of Dh158.541 billion achieved through 38,838 sales, mortgages and other transactions.

A survey by a market research agency indicates that the UAE is the first choice for living for more than two-thirds of the GCC residents based on the quality and design aesthetics of residences.

The Dubai property market also ensures complete transparency, adding to investor confidence; however, it needs to ensure that properties meet the heightened needs and expectations of investors in a changing economic climate. Developers have to keep up with the changing demands of investors and end-users.

The government's announcement of projects demonstrates how the Dubai market is drawing great strength from big developments. For example, the Jumeirah Central, an urban mixed-use city district, is expected to become a comprehensive model for future urban planning in Dubai and around the world. It signals Dubai's plans to keep growing rapidly despite the impact of low oil prices in the region.

The district, conceived to be home to 35,000 residents, offering 7,200 hotel rooms and a capacity to host 100,000 people annually, is a clear demonstration of the leadership's vision aiming to further strengthen Dubai's global position as an attractive destination for residents and tourists alike.

The vision of the leaders is to position Dubai as a smart, integrated and connected city with a wide breadth of residential choices that caters to everyone's needs.

Get to know about Aykon City, where the towers are designed to offer magnificent views of the Dubai Canal and Shaikh Zayed Road

Source: Manish Khatri, Special to Freehold

The author is Vice President - SPF


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