Wednesday, August 17, 2011

Increased demand for Dubai villas

Increased demand for villas in Dubai has triggered a decline in apartment sales, according to the latest report by Landmark Advisory, the leading real estate consultancy.

The Landmark Advisory, in its latest Market Snapshot, stated that a solid growth of demand in residential sales has been noticed across Dubai in certain established localities, including Emirates Living, Downtown Dubai, Lakes and Meadows.

The apartment sales across Dubai fell by two percent, while villas have continued to perform well due to lack of fresh supply in 2011. This has resulted in an increase of 2.8percent quarter on quarter. This trend is evident in the second quarter performance report by Emaar, marking 85percent drop in apartment sales, and a surge in demand for villas and commercial plots.

Areas such as International City and Discovery Gardens have seen maximum declines, while localities such as Downtown Dubai have seen lesser declines. The major reason for better performance of prime markets is the minimal supply that they receive, said Michael Michael, Director, Landmark Properties.

According to Landmark research, the office market in Dubai continues to remain oversupplied, with another two million square feet to be delivered by 2014. Even now, the market condition continues to favour tenants, while landlords are willing to offer capital values and incentives.

According to experts, the latest initiative by the federal government to increase the residency visa period for real estate owners from six months to three years, and the impending new legislation that permits foreign investors to bear 100percent ownership in certain projects, serves as catalyst in reviving the property market.

Another positive aspect that is working well for UAE real estate sector is the Nakheel re-structuring plan.

Meanwhile, the Director of Management Consulting at Jones Lang LaSalle, Jesse Downs, said that the introduction of the three year residency visa, is a positive step in the right direction. Experts at Jones Lang LaSalle are of the opinion that oversupply will continue to impact office, residential, and retail space markets in Dubai.

CB Richard Ellis mentioned that another 25,000 new units in Dubai will further add to total residential stock, out of which, apartments would form 79percent of total residential stock in the market towards end of the year. Last year, 36,000 housing units were completed in Dubai.

According to CBRE forecast, the Dubai property market will see a mix of positive and negative sentiments this year.

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