BULLS VS BEARS | UAE Property Outlook
Ranju Kapoor, General Manager,
Hamptons International
Developers In Wait-And-Watch Mode
The rental market in Dubai has overall
reflected a marginal softening in rates.
There has been growth in rentals of new
offerings and declines in projects with
inventory overhang. New units are entering
the market, however several freehold
developers are carefully managing their
pipeline with projections for delivery in
2017-18, and adopting a wait-and-watch
attitude for this year. With less new supply
entering, the rental market trends are
dictated by demand from end-users who
seek specific conveniences including
connectivity, ease of access to lifestyle and
leisure attractions, and a preference to be
part of established communities.
More Demand For End-Use Homes
Over the past year, the rental markets in
Dubai have held steady in most established
communities including Downtown Dubai,
The Greens and Dubai Marina, principally,
for this reason. Today, there is increasing
demand for end-use homes, as people seek
to shift from a rental model to an ownedhome lifestyle. Across the market, we see
a shift in sentiment, with more customers
asking, ‘when should we buy?’ as against
‘when should we sell?’ Several affordable
communities have been launched to meet
the appetite for value housing but these are
yet to be handed over.
Dubai’s Rental Market Attractive
This year will offer interesting insights
on how the rental market of Dubai will
respond to the shifts in the neighbouring
emirates. Sharper drops might have a fallout as small families may seek to shift their
location of residence. But the traffic woes,
charges by way of road toll and the time
lost in commuting, which in turn impacts
the quality of life, will be deciding factors.
For now, though, Dubai’s rental market
continues to be attractive in terms of yield.
This is based on firm fundamentals, and that
is the mark of a mature property market.
Wrapping Up
Real estate market, like any other asset class, tends to move in a cycle. However, unlike many other assets, real estate markets are little
more predictable as the recovery of real estate follows the macro-economic recovery. The outlook for the UAE housing market therefore
appears increasingly tied to the overall recovery in the economy, especially the crude oil prices. The UAE, and especially Dubai and Abu
Dhabi, has been an investment destination for buyers from around the world for many years, a trend which is expected to continue. The
elephant in the room, as experts would have us believe, is the attractive yields offered by Dubai property sector that continues to outpace
many developed markets around the world, both on the sales and leasing side.
April 2016 | www.wealth-monitor.com
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