Monday, Mar 31, 2014
Type : Article   |  Source : Emirates24/7


Rental market also continues to do well


Residential property prices in Dubai will increase by 10 to 15 per cent in 2014, according to HSBC Global Research.

“We forecast 10-15 per cent growth in prices from current levels in 2014 and relatively stable net yields at 4.5-5 per cent,” the bank said in a recent report on the UAE real estate market.

The residential market in Dubai continues to improve with sales prices rising 6.3 per cent in the year to February 2014 and up 23.8 per cent in 2013. The rental market also continues to do well with average rents up 5.2 per cent in the year to February 2014 and 18.2 per cent in 2013.

“We expect this trend to continue at least for the next two years as the economy recovers and Dubai maintains its reputation as a safe haven in the region,” the bank added.

Standard Chartered and Goldman Sachs Group have in the past stated that the Dubai property market growth was sustainable and there were no fears of a property crash.

JLL, a global property consultancy, also ruled out an impending property bubble recently, saying, “the Dubai property market was ‘smarter’ this time with investors becoming more cautious and better regulations in place.”

Real estate transactions rose by 53 per to Dh236 billion from Dh154bn in 2013 with Indians, Britons and Pakistanis topping the list of expatriate buyers, the Dubai Land Department (DLD) figures reveals.

But as a word of caution, Citi, a global bank, in its recent report, said there was little room for complacency.

"The fact that we think things are different now does not mean that things cannot go back to the way they were" the bank said, adding,  "Indeed, Dubai's dynamic economic and financial landscape are fast-moving and the circumstances of the real estate market and the wider economy could change in short order."

And, in order to control flipping that was rampant during the last property boom cycle, Dubai increased property registration fees in from two per cent to four per cent of the property value in October 2013.

Author : Parag Deulgaonkar