Monday, December 02, 2013

Dubai property prices surge following successful Expo 2020 bid

Real estate prices in Dubai are likely to shoot up soon, but, the real estate sector as a whole will witness a stable and sustainable growth in the long-term, say experts.

Leading global real estate consultancy, Jones Lang LaSalle said that the direct impact of Expo 2020 will depend on investor sentiment, leading to increased asking price for plots and ready villas / apartments for developments near the Expo site and Jebel Ali area.

The Chief Executive Officer of PropSquare Real Estate, Parvees Gafur, said that there could be an instant hike in prices and with gradual increase on actual demand. The TIER 2 communities would be most benefitted, with majority of them being on the corridors of the main Expo venue.

Meanwhile, rents are unlikely to increase immediately, as the real consumer takes time to enter markets based on their mobilisation of businesses, and proper rent controls set by Dubai’s RERA on existing properties too.

On the development front, JLL is of the opinion that supply levels in the corridor to the south of Dubai are likely to increase due to successful Expo bid. Several developers have major land holdings around Dubai World Central and plan to develop these following the improved sentiment after the successful World Expo dicision, said Alan Robertson, CEO of JLL, MENA.

Another leading real estate consultancy, Cluttons, said that the market will see a more stable and sustainable growth. The much talked about ‘Expo boost’ has already hit the property market to an extent. There has been a surge in property prices, and a trend of more stable and sustainable growth is likely to continue in the short term, said Steve Morgan, Head of Cluttons, Middle East.

The fast-tracking of projects meant to complement the 2020 vision of the city of hosting 25million tourists is inevitable and this involves resumption of work in Dubai’s stalled schemes.

Cluttons believe that majority of investment in the short-term will go towards delivery of the Expo site, accelerating transport infrastructure, leisure, retail and hospitality.

The CEO of Dubai Properties Group, Khaled Al Malek, said that there has been a strong demand across variety of sectors including tourism, retail and hospitality, and hotels and malls, apart from residential, commercial and logistics projects that cater to growing number of visitors.

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