Monday, August 09, 2010

Declining rentals to make Dubai, Abu Dhabi markets more attractive

According to property analysts, an oversupply in the market will actually make the UAE a more competitive place to live and work.

The Manager of Residential sales and leasing, Better Homes, Kosta Giannopoulos, said that growing number of vacant units will make if easier for people from outside the UAE to move in.

Apart from the declining rents, the infrastructure and the systems are improving, and majority of expatriates believe in Team UAE, which could give them a greater sense of belonging, he said.

The Assistant Branch Manager at Better Homes, Jon Yarrow, agrees that the Green Community has a queue of tenants seeking to move in. Although it is difficult to quantify the exact number of vacancies, several developers are delaying handover of units.

The vacancy levels are likely to increase within next six months as more supply enters the market, he added.

Cluttons International recently revealed that Sharjah is not far behind, and there are high levels of residential units being rented out in Sharjah too, particularly in the new projects.

However, there are high vacancy levels looming large in Dubai and Sharjah. This is evident with the growing number of "to-let" boards across Umm Suqueim and Jumeirah, where traditionally villa rental inquiries have been slower.

But, the outlook seems worse for office sector. The latest research by Landmark Advisory indicates those oversupplies will double empty office space to 45.9mn square feet by 2014. The vacancies would grow to 53 percent and 58 percent by 2013 and 2014 respectively.

However, this will bring down quality office rents, thereby making Abu Dhabi and Dubai more attractive for new businesses.

According to Landmark Advisory, the residential sector rents will peak between 25 and 28 percent in 2012. Colliers International sets current vacancy rates at 13 percent.


Dog Friendly Hotels said...

with a lot of interesting & easy accessible promotional features like guranteed rentals,post dated rent cheque on signing contracts & homes at 50%,below market value huge savings & attractive prices at prime locations...the land of Dubai Real Estates are booming like Awesome...of which this blog provides a real quality overview of the fact in a simple heart touching way...which was wonderful to know.

Alan Shawn said...

They should have to take some serious action and make some good strategies to revive the real estate industry. The govt. should have to bring some professionals and experts for revival of the market. I think this is the best time invest in the real estate market of Dubai.