Dubai’s property market posted strong growth in September with developers banking on the high rental yields and affordable prices of residential properties, while in neighbouring Abu Dhabi the sector trudged on with a steady progress, said a report.

The property prices remained strong, while rental yields posted one of the best trends in the region, stated UAE-based real estate portal Bayut.com in its report.

September’s Cityscape Global 2015 finally cleared all speculative clouds of a dampened demand induced by the purported slowdown in Dubai, it stated.

The property even sent a clear message that Dubai’s realty sector was strong and its demand was increasing by the day. The unprecedented footfall numbers at the event showed investors still see Dubai with much interest, it added.

According to Bayut, the developers banked on the height rental yields and affordable prices of residential properties in Dubai.

The unique combination made the new launches particularly attractive to investors and homebuyers, who were sure that the comparatively low prices of Dubai properties today would prove to be exceptionally beneficial in the future, it added.

While many property experts expected property prices to decline in anticipation of the 25,000 imaginary units to be delivered in 2015, the month of September passed smoothly in Dubai amidst price stabilisation.

Prices in some locations did experience a slight dip due to low transaction volumes, but rents remained strong on average and continued with their upward trends in the more popular locations of the emirate, said the report.

The low transaction volumes were due to the government increasing property transfer fee from two to four per cent of the property value, but this never dampened rental demand in Dubai, it added.

The UAE property portal said the emirate’s residential market offered average annual rental returns of over 7.2 per cent of the property value, which is even higher than London’s.

On the hotspots list, Bayut said Dubai Marina retained its top position for another month exhibiting an eight per cent increase in interest compared to August.

Jumeirah Lakes Towers (JLT) came second with five per cent more search hits in September.

Due to its affordable residential options, Dubailand overtook Downtown Dubai for the third spot, generating 27 per cent more search hits in September and gaining two positions to become the third-most popular locality for renting apartments in the emirate, said the report.

The lively environment of Bur Dubai allowed the locality to post an 18 per cent increase in interest in September and retain the fourth place on the popularity index.

However, Downtown Dubai, the home of Burj Khalifa, lost two places on the popularity index and dropped to a distant fifth. But despite the fall in the ranking list, it still generated four per cent more search hits than it did in August.

The sixth place on the popularity index was secured by Business Bay, which gained one position with a 24 per cent increase in interest in September compared with August 2015.

Al Barsha dropped one spot and traded places with Business Bay after registering a four per cent increase in interest to come in at seventh spot. Dubai Silicon Oasis maintained its eighth position on the popularity index after generating a 24 per cent increase in interest among people looking for rental apartments in Dubai.

With a 15 per cent increase in popularity, Mirdif gained one place on the popularity index in September 2015 to land in the ninth place. On the other hand, Deira gained two places and climbed to the 10th spot with a 14 per cent increase in popularity.

On the most popular localities to buy properties, Bayut said Dubai Marina continued to top the charts for another month generating a 2.9 per cent increase in search hits in September compared to the previous month.

Downtown Dubai followed with an increase of 0.3 per cent in total search hits, while Jumeirah Lakes Towers retained third place despite a 0.3 per cent decrease in search hits in September compared with August.

Dubai Sports City was another locality that witnessed a minor dip in interest (0.9 per cent) yet managed to retain its fourth spot on the popularity charts for another month.

Even though Business Bay generated much interest among property buyers in September 2015 and saw a 19.6 per cent increase in search hits, it remained in fifth place in September.

Palm Jumeirah generated a 5.7 per cent increase in search hits and retained the sixth spot on the popularity charts.

Meanwhile, Dubailand generated a 14.6 per cent increase in interest and climbed three positions to land in the seventh spot. Jumeirah Beach Residence retained its eighth spot and had 4.7 per cent more search hits in September compared with August.

Jumeirah Village Circle dropped from seventh place in August to ninth in September with a four per cent decrease in search hits. Dubai Silicon Oasis experienced a decrease of 20.7 per cent in search hits and ended up in the 10th spot on Bayut.com’s popularity charts.

Abu Dhabi

On the Abu Dhabi scenario, Bayut said the property market found itself in the perfect position for mid to long-term investment in September. Owing to a constrained supply, residential rents rose and so did the prices.

The Abu Dhabi Urban Planning Council also announced that it would be launching a new policy making allotment of 20 per cent of all new residential projects to affordable housing mandatory for all developers.

Despite the oil-price crunch, there has been no slowdown in the construction process of ongoing projects and some new launches are in the pipeline as well.

On the top apartment renting localities, the property portal said Al Reem Island continued to dominate the popularity charts for another month exhibiting a 21.39 per cent increase in search hits compared with August 2015.

Al Raha Beach followed with 29.27 per cent more search hits in September, while Al Khalidiyah retained the third spot on the popularity charts with a 32.09 per cent increase in search hits.

Generating a 23.11 per cent increase in interest, Al Reef overtook Khalifa City A climbing to the fourth spot in September. Despite dropping to 5th place, Khalifa City A witnessed a 7.55 per cent increase in search hits.

Al Ghadeer retained the 6th spot and generated a 23.62 per cent increase in interest in September 2015, said the report.

Beating all odds due to the delivery of new units, Saadiyat Island received 102.11 per cent more search hits in September compared with August and jumped six positions to land in the seventh place. Al Muroor retained the eighth spot on the popularity index by exhibiting a 27 per cent increase in interest from tenants in Abu Dhabi.

The Corniche Area dropped two positions to ninth place, but still generated 4.2 per cent more search hits than it did in August. Al Bateen was another top scorer that climbed three spots on the popularity index in September to land the 10th spot. The locality generated 61.22 per cent increase in interest in September compared with August.

Bayut said the property developers in both Dubai and Abu Dhabi were now focussing on building mid-end affordable residential units.

"We believe the particular trend of developers addressing the imminent demand would not only strengthen the property market of both the emirates, but it would also lay to rest all fears that developers were only bent upon launching high-end luxurious projects," said the property portal in it review.

Studies indicate numerous new affordable housing projects entering the market in the coming two years.

"We believe these properties would likely see a burst of new investment flowing into the UAE. Office and commercial spaces remained in high demand, depicting a healthy inflow of business to the county, in September," remarked Bayut.com CEO Haider Ali Khan.

“Although the activity in real estate sectors of both Abu Dhabi and Dubai has been slowed down by global factors, there is no shortage of positivity in the market. High-quality options that offer lucrative gains still remain in high demand,” he stated.

"The growing business and employment activity in Dubai and Abu Dhabi means resident population is on the rise and creating a persistent demand for housing and commercial spaces. And with economies offering professionals, businessmen and investors much more than once thought, Dubai and Abu Dhabi appear ready to face all eventualities," he added.-TradeArabia News Service