Thursday, April 19, 2012

No oversupply concern for properties in Dubai

The demand for properties in Dubai has been far surpassing supply, and therefore, the concern over supply issues are rather exaggerated, said an industry expert in Dubai.

Over the past one year, Damac has seen increase in prices across the luxury segment of Dubai real estate market, said Niall Mc Loughlin, Senior Vice President, Damac Properties.

The prices of housing in Dubai grew by 2.3percent over the last quarter of 2011, as per the latest Knight Frank Global House Price Index. While the high-end market has been depicting a quick recovery, the UAE real estate market is getting highly fragmented, indicating that there is little benefit in reviewing the market as a whole.

There has been huge demand in prime locations within Dubai. However, the price gains here are being offset to a certain extent, by price declines in few other less sought locations in the emirate.

There is a strong demand for quality in both Dubai and Abu Dhabi, with existing residents seeking to upgrade, while new buyers aim to take advantage of market conditions that currently offer extraordinary value for money. People are now opting for certain locations, wherein the developer has completed the project, when purchasing an apartment to rent or buy.

According to leading property experts, Asteco, the developments in well-established locations are now nearing full occupancy rates, while the rentals are increasing.

The occupancy rates of the more established towers such as ‘The Waves’ and ‘Marina Terrace’ in Dubai Marina, are as high as 94percent, and 97 percent, respectively. Similarly, occupancy rates in Ocean Heights and Emirates garden are 91 percent and 95 percent respectively.

With the occupancy rates close to 100 percent, supply and demand are in equilibrium, Mc Loughlin mentioned.

Meanwhile, Cluttons, leading real estate advisor, mentioned that residential property market in Dubai is now more secure and transparent, with residential sales indicating a positive start to 2012.

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