The Cluttons 2012 Quarter One report shows the Dubai residential property market is showing signs of growth and more stability in certain areas thanks in part to mortgage lenders who are competing for business by lowering rates. Banks are also helping by eliminating fees and have helped to boost interest, particularly in the Emirate’s villa market. Areas that are enjoying growth include the Lakes, the Springs and the Greens, while Discovery Gardens and International City have fallen considerably through the last quarter of 2011. Cluttons predicts more growth through the end of 2012 based on demand rather than investor sentiment. For more on this continue reading the following article from Property Wire.
Residential sales transactions saw a natural increase in January and February 2012 as mortgage lenders compete to offer the most attractive packages, according to the latest real estate report from Cluttons.
The Lakes, the Springs and the Greens have all seen price gains since the third quarter of 2011 and resonance of the Arab Spring continues to help the Emirates maintain its safe haven status, says the firm which has had a dedicated Middle Eastern presence since 1976.
Its 2012 Quarter One market report says that the overall trend in the marketplace is positive, with stability and even growth seen in certain locations over the past six months. Residential sale transactions saw a natural increase in January and February particularly in the villa market, aided by the confidence given by the resurfacing of the local mortgage market.
Mortgage lenders, who continue to fight for market share, offering more attractive rates to credit worthy clients purchasing particular stock, have aided recent activity. The release of stock in Jumeirah Islands, for example, has caused values to increase in the development by 5.2% from the third quarter of 2011.
As well as offering mortgage rates for as low as 3.5%, banks are slashing arrangements fees and timescales to process approvals in an attempt to attract the limited market available.
Villa stock in Dubai has seen optimistic gains, the best performing are the Emirates Living developments of The Lakes, up 7.2% from the third quarter of 2011, The Meadows, up 6.4% and The Springs, again up 6.4% from Q3 2011. Villa developments such as Jumierah Village or Green Community have proved less desirable locations and consequently have seen value drop 2.5 % compared with the third quarter of 2011.
Values of apartments in less desirable locations have continued to be eroded by oversupply and poor property management, the report points out.
Areas such as Discovery Gardens and International City have fallen by 7.8% and 5.6% respectively from the third quarter of 2011.
But the resilience of the higher end of the market has remained strong over the past five months and has experienced positive growth since the third quarter of 2011 in locations such as Burj District, also known as Downtown Dubai, up 5.3%, The Greens up 4.8%, The Views up 5.2% and certain higher end developments in Dubai Marina up 1.35%.
Cluttons predicts that the remaining nine months of 2012 will mirror the market movements of the fourth quarter of 2011 and the first quarter of 2012, solidifying a robust market which is based on demand fundamentals rather than investor sentiment bubbles.
This article was republished with permission from Property Wire.