The Turning Tide of Dubai Real Estate

The article explores the way dubai real estate prices have shown a price correction and are now on their way up and improving.

The first half of 2016, and then some, was not the best for the real estate market in Dubai. According to the DLD (Dubai Land Department), property values fell almost 30 percent. However, there are signs that the tide is finally turning and that better days are ahead. This is good news for Dubai real estate professionals, real estate investors, and the Dubai population as a whole.

Ali Rashid Lootah, the Chairman of Nakheel PJSC, recently gave an interview in Singapore where he said that he believes the worst is over. He suggested that the dip in prices was brought about by a previous rapid escalation in prices, which meant that the market was due for a correction. “Dubai is growing, we are seeing signs of more inquiries -- serious inquiries -- and I think that’s a sign of recovery. The market is maturing, we are seeing more serious, cautious investors, not speculators.” [1]

Lootah is also predicting a positive upturn for Dubai real estate from the long-tail effects of Brexit as investors look for alternatives to UK properties. “Brexit could be a positive thing,” he said. “People looking for the best return on their investment will have to pick and choose and may look for other opportunities. Because of Dubai and UAE relations with UK, we are an obvious alternative.” [2]

Other Dubai real estate industry experts echo Lootah’s sentiment of the market picking up. According to Property Guru:

Real estate consultancy Core Savills recently ran a survey in the third quarter of 2016 among 800 respondents about what they thought about the future of Dubai’s property market. Half felt that the residential market would recover over the next 12 months.

JLL’s recent reports also indicate some light at the end of the tunnel for Dubai’s subdued real estate market. Its most recent market overview for the Dubai real estate market highlighted that “the residential market has now reached the bottom of it’s current cycle.”

However, the consultancy also goes on to caution that while prices are expected to begin picking up again in 2017, “the pace of this recovery is expected to be limited by economic uncertainty and the volume of potential supply.”  [3]

There are also additional components that point to a turning tide in Dubai’s real estate market. These tremendous growth and exposure opportunities, from a growing economic sector, to a flourishing events industry in the form of meetings, incentives, conventions and exhibitions (MICE), to the upcoming 2020 Expo, will usher in a positive turn of events in Dubai.

“Dubai’s excellent transport, education, trade and recreational facilities already entice millions of people to love, work and spend leisure time in the emirate. As the city continues to grow, so does the need for more accommodation and attraction for residents, tourists and businesspeople. All of this means more new and lucrative opportunities for investors,” said Lootah. [4]

At Durise, we are definitely leaning toward the positive side of the spectrum. We’re looking forward to the upward motion of the real estate market, and we’re poised to lead the way to bringing more real estate investment dollars into the local economy.

 

 

References:

1)    http://www.bloomberg.com/news/articles/2016-10-22/worst-is-over-for-dubai-property-as-buyers-return-nakheel-says

2)    http://www.arabianbusiness.com/return-of-serious-buyers-dubai-is-sign-of-recovery-says-nakheel-chairman-649900.html

3)    http://www.propertyguru.com.sg/property-management-news/2016/10/138845/healthy-prospects-for-dubais-real-estate-market-in-2017

4)    http://www.propertyguru.com.sg/property-management-news/2016/10/138845/healthy-prospects-for-dubais-real-estate-market-in-2017

 

 

Tags: dubai real estate, prices, nakheel, investors

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