Things have been looking up in the United Arab Emirates real estate market in the first half of 2012 and some experts say it’s thanks to the increased availability in funds for investment. The Royal Institution of Chartered Surveyors (RICS) notes that improved sentiment in the market has boosted transactions by 21% in the first two quarters and its Global Commercial Property Survey projects even more growth in the near term. RICS analysts warn, however, that the threat of oversupply could put a damper in some sectors like commercial office property. For more on this continue reading the following article from Property Wire.
Land transactions in Dubai increased 21% to reach AED63 billion in the first half of 2012, figures from the emirate’s land department show.
There were a total of 18,953 transactions to the end of June at an average of 133 per day and Sultan Butti bin Mejrin, director general of the Dubai Land Department, said the figures are an important indicator of the growth and strong performance of the market.
‘The real estate market in Dubai has shown high levels of flexibility in meeting investor requirements and trends during the first half, especially new investors looking to benefit from the price correction that emerged in the past two years,’ he explained.
He also pointed out that prices had increased in the past few months due to high demand for buying lands, villas and flats in certain areas of Dubai.
The figures come as a time when the latest report from the Royal Institution of Chartered Surveyors shows that sentiment in the United Arab Emirate real estate investment market improved during the second quarter of 2012 boosted by the rising availability of funds.
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Its latest Global Commercial Property Survey said purchaser enquiries rose for the second consecutive quarter and transactions are forecast to rise in the coming months. It said expectations for capital values in the UAE for the third quarter show a modest increase for the first time since 2008.
The survey also showed that 16% more respondents indicated that money available for investment in real estate increased during the second quarter of the year and that occupier demand, led by an active retail sector, continued its rise, though at a slightly slower pace.
However it added that new supply coming on to the office market, added to existing stocks, meant that despite the recovery in demand, oversupply continued to impact upon rental expectations.
‘It is encouraging that there are now some tentative signs of a turn in the real estate market in the UAE. At the moment, this is more visible in the investment market and it will take some take some time to work off the excess space that has built up in recent years,’ said Simon Rubinsohn, RICS chief economist.
‘As a result, it may be premature to envisage any upturn in rent levels but after a torrid period, the indications are that that they are at least now close to stabilising,’ he added.
And according Hesham Al Qassim, chief executive officer of Wasl Asset Management, the emirate’s largest landlord managing the property portfolio owned by the Dubai Real Estate Corporation, current prices meant that now is ‘the right time’ to invest in the local market.
‘In terms of freehold, all the residential units in the Wasl portfolio are seeing good demand again and the market is starting to roll over again,’ he told Arabian Business.
‘I think it’s the right time for it. The market has to move at some point. It is four years from the time that everything started to slow down, and I think that prices have gone below the right level. It’s the right level to buy again,’ he added.
The managing director of Daman Investments, Shehab Gargash, also said that he believed that real estate now presents a real opportunity for investors, alongside sectors such as financial services and agriculture.
This article was republished with permission from Property Wire.