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New era 'emerges in UAE property market'

Dubai, February 1, 2009

A new era in the UAE’s property market is emerging from the world economic crisis according to Landmark Advisory’s first quarterly market report of 2009.

The region’s real estate sector will shift to a demand-driven market where need and customer preferences, rather than greed from frenzied speculators, will determine market prices.

“As the overall price declines continue across most real estate assets in 2009, developers that deliver on the quality they promised will be rewarded, while lower quality units will bear the brunt of falling prices,” explained Daniel Seleanu, Research Analyst.

“As the price discovery process unfolds, we expect sale prices to fall on average by 20 per cent for apartments and 35 per cent for offices. Villa prices, however, are likely to remain fairly stable,” he noted.

The report also reveals solid prospects in the warehouse segment, which is undersupplied and has a strong price support due to its practically untapped leasing potential.

Stagnating income levels in Dubai, caused by a slowing economy, mean that increased liquidity and widely available lending will be the key factors determining how and when the region’s property market will begin to recover.

“Maintenance fees are commonly overlooked in the rental market, and because they hurt rental yields, landlords have been attempting to pass off ever larger portions of this cost onto tenants,” Seleanu pointed out.

“Until RERA’s new, owner-oriented strata law is fully implemented, buyers must be sure to ask about all past, present, and planned monthly fees. These charges are likely to fluctuate in the year ahead,” he warned.-TradeArabia News Service




Tags: Crisis | new era | UAE property market | demand-driven market |

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