Dubai’s real estate market has been struggling to make gains in value and sales through 2011 with little success, but now it appears a turnaround may be beginning. The International Monetary Fund is now projecting a 3.3% gain in the United Arab Emirates’ GDP by the close of the year, and survey group Cluttons reports increased interest from international residential and commercial real estate buyers who are looking for well-designed and well-positioned properties in the country. The lack of movement in the beginning of the year was attributed to uncertainty in regional and global markets, but new developments are forcing investors to take a second look at the area. For more on this continue reading the following article from Property Wire.
Good quality property in good locations in Dubai is helping the emirate’s beleaguered real estate market get back on its feet, according to a new report.
A recovery in the emirates property market is just around the corner as market demand is now originating from variables associated with an established marketplace, says the report from surveyors and valuers Cluttons.
The market is seeing strong interest from buyers in good quality, well positioned and well designed properties with average villa sales growth of 0.7% and the development market showing signs of coming out of hibernation.
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In its market report on the third quarter of 2011, Cluttons says that the early part of the year was characterised by uncertainty and unrest both within the region and overseas. But Dubai is now showing signs of optimistic improvement, citing a report from the International Monetary Fund predicting GDP growth of 3.3% for 2011 growing to 3.8% next year.
The Dubai Chamber of Commerce and Industry predicts that Dubai’s economic rate could accelerate to 6% next year, fuelled by trade, tourism and the logistics sectors, which have posted strong growth figures for 2011.
Cluttons notes that the residential real estate sector seems to be developing with a return to the optimism of June and July of this year. Cluttons has noticed that finish; location, amenities and a sense of community are now far more prevalent in buyer’s minds compared to those purchasing property three or four years ago.
Although the less desirable locations are still experiencing the effects of the supply demand gap with 10,000 to 15,000 new units expected to be delivered this year, Cluttons notes that residential properties found in more desirable areas have seen sustained values and in some cases growth.
This trend has seen a marked interest in residential locations such as the Palm Jumeirah, Meadows, Springs, and Arabian Ranches, which have seen value growth of around 1% since the second quarter of 2011. This trend to desirable location villas has been mirrored in the leasing market, with Cluttons seeing a gain of villa rents across all areas of Dubai of 0.7%. In contrast, apartment rents in most locations have dropped 2.5% compared to second quarter figures.
‘Moving into the final quarter of 2011, the Dubai real estate sector can expect more astute investors and tenants, not only looking for good location sites, but quality and fine detail. The development market is also showing signs of revival, as those holding well located and structured land banks and developments are now considering their options to develop out, and or extend existing projects,’ the report concludes.
This article was republished with permission from Property Wire.