Tuesday 19 March 2024
 
»
 
»
2015 OUTLOOK STABLE

Dubai property... valuations seen steady next year

Dubai property price rises slowdown in H2

DUBAI, December 17, 2014

Increases in Dubai property prices slowed in the second half of 2014 and valuations will be steady next year as a glut of new units are released, leading real estate consultants CBRE said.

 Increases in Dubai property prices slowed in the second half of 2014 and valuations will be steady next year as a glut of new units are released, leading real estate consultants CBRE said on Tuesday.

The real estate sector in Dubai, one of seven emirates in the United Arab Emirates, has been among the most volatile globally over the past decade as it turned from boom to bust to boom again. Prices rebounded from early 2012, soaring from June that year to the end of 2013.

"The major investors haven't really changed over the past five years - UAE nationals are some of the largest buyers, (plus) India, Pakistan, the UK," Matthew Green, CBRE Middle East's head of research, told a news conference.

"For money coming in from this region, it's about moving cash out of countries which are higher risk into a country that's perceived as comparatively stable."

Residential property rental values rose 7 per cent in 2014 - less than 2013's increase of 24 per cent - while sales prices climbed 18 per cent this year and 30 per cent in 2013, CBRE estimates.

But the vast majority of 2014's gains occurred in the first half of the year - the final six months were near-flat for rentals and sale prices rose 3 and 2 per cent respectively in the third and fourth quarters, said Green.

Transaction numbers in 2014 fell by 23 per cent year-on-year and the total transaction value dropped 17 per cent. More than 20,000 new residential units are due to enter the market next year.

"The apartment market is going to see significant supply, the same for villas, so we're not expecting a repeat of this year's performance in 2015 - we're looking at more marginal growth levels," said Green.

"Hyperinflation dramatically increased the cost of living, so stability in the market is a very good thing."

The bigger increase in sales versus rental prices has pressured rental yields.

"Not everyone is a buy-to-let investor but, as an investment destination, Dubai is no longer as attractive as it was," said Green. "I don't think we will have a correction like we had before. The market is relatively well insulated, with the kind of population coming in and the economy still sound."

Dubai's economy is expected to grow about 4.5 per cent this year, with growth rising above that level in coming years, a senior official of the emirate said on Tuesday. – Reuters




Tags: CBRE | Dubai property | 2015 | New supply |

More Construction & Real Estate Stories

calendarCalendar of Events

Ads