When the economic recession hit the Dubai real estate market in 2008, the state’s stock market lost its major value overnight, leaving real estate market to face the worst affects. Though after four years, investors are still cautious to invest in the region but the market is showing recovery signs. Following article highlights few factors that can strengthen Dubai realty market.
With a 65 percent rise in the number of property transactions in 2012, it is expected that Dubai real estate sector will continue to grow in 2013 and experience a broader based recovery backed by robust economic growth. With a number of major property and infrastructure projects launched by the end of 2012 and scheduled to start later in 2013, it is said that the foundations are being laid for a dynamic recovery in 2014. Last year, a trend was noticed that hardest hit realty companies have made progress, property sales and rental prices set to rise and a steady stream of tourists has started visiting the city. These all pointers indicate that Dubai real estate market is finally regaining its strength.
Since the beginning months of 2013 showing clear indications of recovery, most of the real estate experts characterize this success with the investors’ confidence that is slowly returning. Let’s figure out what are few factors that can play an important role in re-strengthening the Dubai real estate sector.
Return of Confidence
Few underlying factors like the UAE’s positive economic growth, increased employment opportunities and improved sales and rental price performance of Dubai villas and apartments have led to fortify the safe haven status of Dubai, which eventually directed to increased market confidence. With several real estate project announcements over the past few months, the investors’ confidence has become more pronounced. Dubai government has also introduced new legislations such as financing options and flexible payment options and has imposed few real estate laws in order to create a stable market environment that can entice more and more property investors for this region.
More Consistency
Experts predict that rising market confidence, introduction of new laws and legislations and strong market fundamentals will drive a consistent rebound in the months to come in 2013. Apartments and villas for sale in Dubai are enjoying hike in prices and at the same time, the rent of residential properties in Dubai rose 7 to 10 percent in the first quarter of 2013. Due to this consistent performance and growth in real estate market confidence, the city has been able to maintain its popularity as a preferred real estate investment destination worldwide. Real estate experts forecast a 10 to 17% increase in rental rates along with increase in sales prices across the city, driven by a number of new property projects announced later in 2012.
Government Initiatives & Growing Consolidation
Dubai government will remain a major player in influencing the real estate market for the foreseeable future. Few initiatives such as approval of the Dubai Urban Planning Framework launch of several property developments and consolidation of key real estate players will regulate government’s control on the market fluctuations. Over supply was a serious issue for Dubai realty market but market analysis suggests that Dubai has passed through the peak of its construction curve and now the region will not experience the same situation. On the contrary, increased demand and re-arrival of investors in the region will continue to reduce over supply. Several major projects have been announced in Dubai recently, which will give increased number of choices to the buyers, investors and tenants in 2013.
With continued progress in 2012, consistency, transparency and consolidation seems to move into even greater focus in 2013. Most of the initiatives are likely to be micro but Dubai real estate sector will continue to take the lead in comparison to rest of local real estate markets.
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