Dubai real es­tate show signs of re­cov­ery

The Pak Banker - - Front Page -

DUBAI

As one of the worst-hit eco­nomic sec­tors dur­ing the fi­nan­cial cri­sis of 2008, the prop­erty in­dus­try has wit­nessed some signs of re­vival in 2012. This year will be re­mem­bered for the pick-up in some seg­ments of the mar­ket as Dubai con­tin­ues to hold its 'safe haven' sta­tus.

Still, there are con­cerns about the prop­erty mar­ket that sug­gest it is still not out of the woods just yet, an­a­lysts say.

"Real es­tate has shown the first solid signs of re­cov­ery since 2008, par­tic­u­larly in the Dubai res­i­den­tial mar­ket. There has been a good up­take on newly com­pleted stock and prices have strength­ened both in sales and rentals but no­tably in the pop­u­lar free­hold com­mu­ni­ties such as Emi­rates Liv­ing, Palm Jumeirah, Ara­bian Ranches and Down­town," said He­len Tatham, di­rec­tor of res­i­den­tial at Knight Frank.

Pos­i­tive signs of slow and grad­ual re­vival in­clude the suc­cess of off-plan sales and re­leases by ma­jor de­vel­op­ers such as Emaar and Nakheel, the en­force­ment of trans­parency and reg­u­la­tion that con­tin­ued to im­prove through 2012 and project han­dovers such as the Princess Tower in Dubai Marina - the tallest res­i­den­tial build­ing in the world, she said.

"For Dubai, 2012 has been a year of steady re­cov­ery and good progress," said Alan Robert­son, chief ex­ec­u­tive for Mena at Jones Lang LaSalle (JLL), cit­ing the an­nounce­ment of the In­vestor Pro­tec­tion Law that is expected to re­new con­fi­dence in the mar­ket.

Ma­jor de­vel­op­ers are restart­ing pre­vi­ously stalled schemes and some are even launch­ing new projects while rents continue to in­crease for the best qual­ity schemes. "All of this pro­vides clear ev­i­dence of the 'cor­ner be­ing turned'," he said.

The re­cently an­nounced mul­ti­ple en­try visa to the UAE will also boost the pur­chase of free­hold prop­erty here but they are only valid for six months, which lim­its the pos­i­tive ben­e­fit, Robert­son noted. De­vel­op­ers are also op­ti­mistic about real es­tate this year.

"The mar­ket is sta­ble, trad­ing ac­tiv­ity and trust is back and there are bet­ter laws and reg­u­la­tions in con­stant de­vel­op­ment," said Khalid Al Ma­lik, group chief ex­ec­u­tive of Dubai Prop­er­ties Group, cit­ing sales in Bay Square and 95 per cent oc­cu­pancy in its leas­ing portfo- lio of res­i­den­tial projects.

Emaar Prop­er­ties has also seen some highs in the mar­ket. It sold out its three key projects: high-end apart­ments at Panorama at The Views, lux­ury homes in Ara­bian Ranches and The Ad­dress The BLVD ser­viced res­i­dences.

"The over­whelm­ing cus­tomer re­sponse, with the units re­leased for sale be­ing sold out on the very first day of their pub­lic launch, is a clear demon­stra­tion of the pos­i­tive growth of Dubai's prop­erty sec­tor, led by strong eco­nomic fun­da­men­tals," an Emaar Prop­er­ties spokesper­son said in an email to Gulf News.

While the Dubai res­i­den­tial seg­ment has seen growth in cer­tain ar­eas, there is still high va­cancy rates in the of­fice mar­ket that is likely to continue for some time due to the large de­vel­op­ment pipe­line, Robert­son said. "The mar­kets in Abu Dhabi are a year or two be­hind Dubai in their cy­cle and will continue to face some chal­lenges in the short term," he said, adding that there are mea­sures to re­strict sup­ply and stim­u­late de­mand. Look­ing for­ward to the mar­ket's per­for­mance next year, an­a­lysts and de­vel­op­ers say they ex­pect cur­rent trends to continue.

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