A recovery in the property market in Dubai is just around the corner according to the latest report into the emirate’s real estate sector.
It is experiencing strong interest from buyers in good quality, well positioned and well designed properties, according to the the report from surveyors and valuers Cluttons which has had a presence in the Middle East since 1976.
The report points out that the International Monetary Fund is predicting GDP growth of 3.3% for 2011, and 3.8% for 2012 and market demand is now originating from variables associated with an established marketplace.
The report also says that residential property in desirable areas has fared well over the summer, with average villa sales growth of 0.7% and even the development market shows signs of coming out of hibernation.
The early part of the year was characterised by uncertainty and unrest both within the region and overseas, but Cluttons notes that Dubai is now showing signs of optimistic improvement.
The Dubai Chamber of Commerce and Industry predicts that Dubai’s economic rate could accelerate to 6% next year, fuelled by trade, tourism and the logistics sectors, which have posted strong growth figures for 2011.
Cluttons notes that the residential real estate sector seems to be developing with a return to the optimism of June and July of this year. Cluttons has noticed that finish, location, amenities and a sense of community are now far more prevalent in buyer’s minds compared to those purchasing property three or four years ago.
Although the less desirable locations are still experiencing the effects of the supply demand gap with 10,000 to 15,000 new units expected to be delivered this year, Cluttons notes that residential properties found in more desirable areas have seen sustained values and in some cases growth.
This has seen a marked interest in residential locations such as the Palm Jumeirah, Meadows, Springs, and Arabian Ranches, which have seen value growth of around 1% since the second quarter of the year. This trend to desirable location villas has been mirrored in the leasing market, with Cluttons seeing a gain of villa rents across all areas of Dubai of 0.7%.
In contrast, apartment rents in most locations have dropped 2.5% compared to the second quarter.
Moving into the final quarter of 2011, the Dubai real estate sector can expect more astute investors and tenants, not only looking for good location sites, but quality and fine detail, according to the report.
The development market is also showing signs of revival, as those holding well located and structured land banks and developments are now considering their options to develop out, and or extend existing projects.