UAE investors expect market to grow over next 12mths – survey
A new survey by YouGov reveals that majority of UAE’s residents remain buoyant about the real estate market and expect growth in the next 12 months.
Almost 54 per cent of the respondents said they are feeling positive about the continuing growth of the Dubai real estate market and 58 per cent said they were expecting an increase in house sales and rents over the next year, the survey said.
It pointed out that location was a significant factor in determining where investors choose to purchase properties in the emirate.
YouGov shows positive sentiment in survey
Of the 861 UAE residents surveyed, 56 per cent favoured properties near public transportation followed by 44 per cent wanting grocery stores nearby, 41 per cent near retail shopping malls and 37 per cent close to mosques.
YouGov’s Head of Real Estate Research, Lara Al Barazi said: “The study highlights positive sentiment across the board. Investors, potential home buyers as well as real estate professionals are expecting growth to continue in the Dubai real estate market in the coming year.”
Conducted for Informa, organisers of Cityscape Global, the study revealed studios and one-bedroom apartments were growing in popularity in the UAE real estate market, with investors shifting their focus to smaller, affordable residential options.
Market conditions are slower but transactions rose by 14%
In June this year, Standard & Poor’s (S&P) ratings agency said property prices in Dubai’s residential housing market are expected to fall by 10 to 20 per cent this year. Other international consultancies too have predicted prices to fall by 5 to 10 per cent, as transaction volumes have dropped significantly in the first two quarters.
However, in July this year, Dubai Land Department said the total number of real estate transactions rose 14 per cent to Dh129 billion from Dh113 billion in the same period last year.
Media misled over high profile brokerages closures
Sources at RERA also went onto say, some of negative sentiment in the media, had been driven by the recent closure of a high profile estate agent. Which had spread “lies and rumours” about Dubai’s property market through the foreign media. Yet “The company only wanted to cover up its losses, malpractices and violations of the real estate laws in Dubai”. The company owner in question is now subject to a criminal investigation.
Reduction in short term speculation, good for the property market
While the market may have seen a slow down, this is viewed by many as a healthy one. Resulting in the reduction of short term speculation, that previously fuelled a lot of the problems in the market in 2008.
This slowdown in Dubai’s real estate sector is seen as a “positive trend” stemming from stricter regulations, not the oil-price slump, industry experts say.
According to Nicholas Maclean, managing director of consultancy CBRE Middle East, the decline in property sales over the past three quarters is a healthy sign that can be attributed to tougher regulation.
“Dubai residential property sales have declined over the past three quarters, but the drop in oil prices is coincidental and the slowdown is more due to big price increases in 2013 – the market is adjusting to return to affordable levels,” Maclean told Reuters. “This is a positive trend and will help prevent a bigger correction in the future.”
Strong growth seen at GGICO Properties since launch
Despite these reports, GGICO Properties has seen a healthy response to the launches of their recent off-plan projects and open market sales. The last 3 quarters have been very good, despite the perceived slow down, with 4 off-plan projects sold out and over 700 units sold since GGICO Properties launched in September 2014.
Sources: Al Bayan, Yougov, S&P, CBRE Middle East, Reuters