Dubai residential market sees positive growth
Dubai, April 1, 2012
The residential market in Dubai witnessed positive growth during the first quarter with the emirate registering an increase in sales transactions, particularly in the villa market in the first two months of the year, according to a report.
The overall trend in the marketplace was positive, with stability and even growth seen in certain locations over the past six months, said real estate specialist Cluttons in its Q1 residential market report for Dubai.
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, said the property expert.
Cluttons pointed out that the 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 per cent from the third quarter of 2011.
As well as offering mortgage rates for as low as 3.5 per cent, banks are slashing arrangements fees and timescales to process approvals in an attempt to attract the limited market available, the report stated.
The villa stock in Dubai has seen optimistic gains with the Emirates Living developments of The Lakes, topping the best performing units list with a 7.2 per cent growth compared to the third quarter of 2011.
This was followed by Meadows, up 6.4 per cent and The Springs, again up 6.4 per cent from Q3 2011, said the Cluttons in its report.
The report pointed out that villa developments such as Jumierah Village or Green Community have proved less desirable locations and consequently have seen value drop 2.5 per cent compared to the same period last year.
The values of apartments in less desirable locations have continued to be eroded by oversupply and poor property management, the report stated.
'Areas such as Discovery Gardens and International City have fallen by 7.8 per cent and 5.6 per cent respectively from Q3 2011,' noted Cluttons, which has enjoyed a dedicated Middle Eastern presence since 1976.
'The resilience of the higher end of the market has remained strong over the past five months and has experienced positive growth since Q3 2011 in locations such as Burj District, also known as Downtown Dubai (5.3 per cent), The Greens (4.8 per cent), The Views (5.2 per cent) and certain higher end developments in Dubai Marina (1.35 per cent),' it added.
According to Cluttons, the resonance of the ‘Arab Spring’ continues to help the emirates maintain its ‘safe haven’ status.
In its forecast for the year, Cluttons said the remaining nine months will mirror the market movements of the Q4 2011 and Q1 2012, solidifying a robust market which is based on demand fundamentals rather than investor sentiment bubbles.-TradeArabia News Service