- Broker Directory
- My Tools
- News & Advice
- Market Trends
- Other GN Sites
According to the Dubai Residential Market Outlook Winter 2014 report, released by international real estate consultancy Cluttons, Dubai’s freehold transactions fell by almost one-third during the third quarter of 2014, while the emirate’s off-plan residential sales market remained buoyant and continued to attract regional and international investors.
“Many households that are determined to purchase now view off-plan properties as good value,” said Steve Morgan, Chief Executive — Middle East at Cluttons. “For instance, at Villa Lantana, there has been a high level of interest, particularly from Emirati [43 per cent] and Indian [24 per cent] investors. The former primarily comprises buy-to-let investors.”
The report also highlights that investment appetite remains strong, with investors keen to free up capital for their next purchase.
Faisal Durrani, International Research and Business Development Manager at Cluttons, said, “We are seeing nearly four out of every five transactions being refinanced once buyers have met the developer restrictions on the transfer of title deeds. While the market continues to adjust to the changes in the financing landscape, we expect the gradual softening in values to persist over the next three to six months.”
Global property consulting firm CBRE’s year-end market update revealed that while the second half of the year saw a period of relative stability in residential rental rates, over the course of the year, a modest growth of around 7 per cent was recorded compared to 24 per cent in 2013. More than 20,000 new units are expected to be available in the next 12 months, which could have a deflationary impact on sales and rental rates.
“Over the past 12 months the sales segment has outperformed the rental market, recording an 18 per cent growth year-on-year,” said Matthew Green, Head of Research at CBRE Middle East. “This disconnect is highlighted as a potential area of concern, resulting in mounting pressures on rental yields.
“However, the market continues to see strong occupier and investment demand for well-located, good quality residential apartments, a fact that is backed by recent transaction numbers in established locations.”
According to the Colliers International’s Dubai House Price Index Q3 2014, the overall quarterly index registered no major change in Q3 2014, staying at 170 index points. The index is compiled using mortgage transaction data from an association of financial institutions.
Ian Albert, Regional Director at Colliers International, said, “When we analysed the data, it was clear that the measures introduced by the government to dampen property speculation are now taking full effect.
“With no change recorded in the third quarter and growth falling from 5 per cent to 3 per cent over the previous two quarters, the pattern could indicate a levelling off of the market.”
Given the growing demand for more affordable locations, a high level of activity and growth was witnessed in Motor City, which saw an increase of 30 per cent compared to the third quarter of 2013.
Source: Property Weekly