DUBAI ó Dubaiís residential real estate sector is returning to optimism with the market demand now originating from variables that one would expect in established marketplaces, where property specifications are seen as prime consideration for prospective buyers, a leading real estate consultancy said on Tuesday.
While the early part of the year was characterised by uncertainty and unrest both within the region and overseas, “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,” said Cluttons in its third-quarter market report for Dubai’s residential market 2011.
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, its noted while citing a report from the International Monetary Fund predicting a gross domestic product growth of 3.3 per vent for 2011 growing to 3.8 per cent next year.
“The Dubai Chamber of Commerce and Industry predicts that Dubai’s economic rate could accelerate to six per cent next year, fuelled by trade, tourism and the logistics sectors, which have posted strong growth figures for 2011,” Cluttons said in its report.
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, the report argued.
It said although the less desirable locations are still experiencing the effects of the supply-demand gap with 10,000-15,000 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 ‘Flight to Quality’ movement 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 one per cent since the second quarter 2011.
“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 per cent. In contrast, apartment rents in most locations have dropped 2.5 per cent compared to the quarter two figures,” the real estate consultancy said. Jones Lang LaSalle, or JLL, said in a recent report that while Dubai’s hotel sector has been the major beneficiary of the Arab Spring, the retail and residential sectors have also received a positive boost over the past nine months.
The latest data from Reidin, a world leading real estate information company, has revealed a monthly increase in Dubai’s property values. Real-estate prices in Dubai were 0.5 per cent higher in August than they were in July suggesting the emirate has turned a corner to reach a significant milestone.
Reidin pointed out that prices have now risen across the board. “More importantly, this price increase has been recorded in Dubai’s quietest month, which usually sees price declines due to minimal levels of tourism and Ramadan which dominates the entire month,” it said.