Tuesday, March 30, 2010

Dubai property market indicates signs of equilibrium

The latest Property Beat report by HC Securities and Investments reveals that the market indicates initial signs of 1 percent stabilization in January, and 6 percent in February.

Following nine months of decline, the Dubai rental prices actually stabilized in November last year, recording strong gains until February, with a 6 percent increase month on month.

When compared to figures during the same period last year, the market is going through a phase of stabilization, and stabilized rental and sales prices are all positive indications, the report said.
However, the demand-supply formula cannot be underestimated. It has to be cautiously looked into, considering what is in pipeline, the projects to be announced and those that will be cancelled, warns Mohanad Al Wadiya, Managing Director, Harbour Real Estate.

According to the report, the increases in prices were initially attributed to growing supplies. The report indicates that the areas that saw maximum deliveries, also witnessed major price declines, wherein the Downtown Burj area recorded a 5 percent drop and Dubai Marina recorded 10 percent decline.

The report forecasts greater solidity in rental and sales rates for the year 2010. The report states that the spillover from neighbouring emirates (mainly Abu Dhabi) helped rental rates in Dubai further last year.

The report also said that mortgages have continued to tighten ahead of Dubai World debt re-structuring proposal. The mortgage volumes dropped to 11 percent in February from 25 percent in September.

The report said that re-structuring of Nakheel controls almost 50 percent of expected supply, and this may lead to further project delays and cancellations fuelling sector dynamics. But, with recovery in global economy and stronger growth shown by UAE this year, there is likely to be increased demand.

1 comment:

Dubai Blog said...

There are some reports which show that Dubai property market is now going towards stabilization in rental and selling prices. This all is due to the right measurements taken by the government during the crises. Some reports say the mortgage industry is still struggling but as a whole the market is showing comfortable situation.