Thursday, February 13, 2014

Dubai to see hot property market with cautious investors this year

The real estate market in Dubai is likely to be hotter this year, according to top property consultants Jones Lang LaSalle.

Last year, there was huge growth in real estate prices and rentals, largely due to fever surrounding Expo 2020. But, the firm’s ‘2014 Top trends for UAE Real Estate’ report indicates that investors will be more cautious this year.

According to JLL CEO, Alan Robertson, the year 2014 will be a positive year for UAE real estate sector, with most sectors of market experiencing better performance.

The landscape is changing and larger projects are being brought in-line with demand, while there is also less dependence on pre-sales. The landscape is different from last year, with investors being more cautious and bank regulations are better, said Craig Plumb, Head of Research.

The firm further said that rentals were increasing by 18 percent year-on-year on average. The secondary and more affordable areas are growing at a faster pace than prime locations, and hence recovery is broad-based, the report said.

If all projects due for completion in 2014 are delivered on time, there would be additional 28,000 units completed this year, which represents eight percent growth over the present stock.

However, it is likely that some of these projects will be delayed. Dubailand is likely to provide 33 percent of supply, with 16,000 housing units expected prior to end of 2016. Another 4200 units are likely to be completed in Dubai Marina, with Dubai Sports City accounting for 3,700 units and 2700 units ready for completion in Business Bay.

Expo 2020 will have limited impact on real estate market 2014. But, in the long-term, it will also have positive effect on hospitality, logistics and retail sectors. Further, the market’s momentum can create ‘irrational exuberance’ and recurrence of certain past issues and challenges. The market is hoped to be more measurable and smarter this year, which is reflected by the healthy caution adopted by investors and occupiers, the company confirms.

No comments: