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Property in New Dubai starting to recover - report
Downtown Burj Dubai, Dubai Marina, and Emirates Living are starting to see a recovery in property prices, it has been reported.
Real estate prices in New Dubai are starting to stabilise with more people choosing to live there and commute to Abu Dhabi, property experts told Gulf News,
"Those working in Abu Dhabi are increasingly exploring residential units in New Dubai due to its proximity to the UAE capital,” Andrew Chambers, managing director of Asteco told the paper.
"While tenants are seeking units in community developments, the demand has mostly been for one and two-bedroom apartments and for three and four-bedroom townhouses,” he said.
Industry reports suggest rent and house prices in Dubai have eased significantly over the previous quarter, the paper reported.
Since the global financial crash property prices in Dubai have tumbled by about 34 percent, according to the Landmark Advisory, with some expert believing there will be a further 20-30% drop to come.
During the second quarter, the price of aapartment saw a slight drop from around AED1,000 per square foot to AED900 per square foot, the paper reported.
Villa prices declined during the same time from AED1,130 per square foot to AED980 per square foot.
However, rental prices look set to remain competitive for sometime, expert said.
"The current oversupply situation coupled with weak demand on both a local and international front will mean landlords will be fighting extra hard to secure tenancies, adding further downward pressure to rent," said Matthew Green, head of research and consultancy in UAE, CB Richard Ellis.
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Posted by MAX, Dubai, UAE on 21 July 2009 at 12:55 UAE time
Another article trying to safeguard self interest. Everybody knows that Asteco has large inventory of RE units to sell, so trying to get rid of it ASAP. But all these so called experts are avoiding is "REALITY". Just visit new developments and see what facilities are there for tenents/investors? All rules/laws are in favour of developers, investors interest are not safeguarded at all.
I am sure Dubai bounces back in areas such as tourism, educational, healthcare, trading in commodities, etc (sorry no trading in villas/apartments anymore !!) but real estate prices needs to come down to value for money levels may be 1999 to 2001 levels.
When Dubai becomes competitive again to do business it will bounce back. Office/house rent, govt fees, etc needs to go down to value for money levels and then you see the recovery and Dubai will become an attractive place all over again. I am optimistic and see this will happen may be in 2-3years time. (2011-2012)
Posted by SNY, Dubai, UAE on 20 July 2009 at 21:04 UAE time
Mmmm interesting real estate article once again. Yes I also wish they would top writing articles like this on-line and in the newspapers at present as most of us in the know really know its all landing on deaf ears at the moment!
However real estate crisis or not, worldwide financial crises or not Dubai will bounce back but sectors such as education, health will be at the forefront of the recovery this time not necessarily real estate as it was before. The tourist attractions will get built in Dubailand but most of the residential will be cancelled or way delayed there. Abu Dhabi a different kettle of fish all together - I've worked for developers in both Emirates that is a whole other article unto itself. Ajman we got a taste on the front of all of todays newspapers - complete disaster if investors dont all get their money back!!
I'm afraid most of you have got it wrong though once again!! There are a lot of people already living here who DO WISH TO BUY SOMEWHERE TO CALL HOME at a reasonable price and many new people arriving everyday WHO ALSO WISH TO PURCHASE SOMEWHERE TO LIVE RATHER THAN RENT. I know of 4 italian oil and gas executives alone that all wish to purchase penthouses at around the 1 million euros mark give or take a few Euro's.
Although an X real, real estate professional having worked for myself in Qatar 8 years and for developers here in Dubai never ventured into third party real estate as there were no rules and regulations to safeguard buyers, sellers or the real estate agents working within FREEHOLD back then hence the big mess we see accummulated over the last 5 years and the reason I am not helping the 4 Italians locate that perfect penthouse although I could desperately use the money as a single parent!
Alot for the government, RERA and the land department to sort out but they are slowly doing so - is it a bit too late only time will tell. I dont have a crystal ball.
Bottom line though is loads of people wish to buy whether its a studio, 1 bedder or villa BUT THE BANKS ARE STILL NOT LENDING and if they are THE LTV's are just not adding up so its a vicious circle we are in at the moment my friends.
Prime example of the above I have had 4 people who wish to purchase my villa at Arabian Ranches but we just cant get them the mortgage and no i am not selling at some exhorbitant price although turned down Dhs 5 million last summer and a few people who went to envelopes at Dhs 4.6 million. i need to get out of the market as i need to move back to europe for jurisdication reasons related to my daughter who is half GCC national.
If people can get a work visa, or the real estate visa via purchasing believe me every tom, dick and harry is trying to make Dubai their home. The UAE will rise again when and in which fashion remains to be seen.
I have worked for the private sector, the government sector and for the Royal family in Abu Dhabi at senior level in Abu Dhabi in the past - we have a catch 22 situation - the UAE needs to Emiratise so all locals are not left unemployed and we all know the middle east is just a time bomb waiting to explode with all the youth that require jobs across it but at the same time they cannot do without us expatriates yet - quota's or no quota's, national ID cards or no national ID cards, bahrain and qatar dropping the sponsorship policy or not so make the best of your time here whether its one year or ten.
Perception and reality my friends, perception and reality.
Posted by Ahmed, Dubai on 20 July 2009 at 13:58 UAE time
I guess that in the current situation, there is nothing better to do except wishful thinking.
What everybody has to understand is that there will be no improvement in the Real Estate till the basic underlying economic Fundamentals are corrected.
Real estate improvement is a by product of core businesses doing well...and not the other way round.
These very basic businesses that were the mainstay of Dubai's economy have been driven out of the market by the short sighted greed of the speculators & real estate sector alike.
We are looking at...probably 5-10 years...for some semblance of normality in the real estate sector...& it will never again touch the peaks witnessed earlier...
Simply because the responsible speculators have amassed huge losses & have either run away or are cooling their heels...
Posted by Graham, Dubai, UAE on 20 July 2009 at 13:21 UAE time
Asteco obviously are playing the let's talk the market up to protect theri market, Landmark are totally confused since last week they predicted the upswing and the only realistic analysi is from CBRE. There is no possibility of a market upswing due to the massive oversupply and the most likely scenario is prices (rent and sale) will only stop declining when they hit 2001 prices.
Posted by E.R.V Menon, Dubai, U.A.E. on 20 July 2009 at 12:42 UAE time
The Dubai bubble had to break, to implode, was a known fact. Like the Bulls in the share market, the property Bulls traded, retraded and went on trading the same assets, inflating the value unrealistically. So it had to crash.
But the crash came along with global recession was a relief to the inflators because they could find a global reason. Another major factor that contributed to this is the confirmation by UAE government that the long term investor visas wont be granted to freehold owners. So they got panicky.
When the crash came, it was aggravated by rumours; now similar rumours are being written about recovery. Well, if it gives some hope and if hope brings signs of revival, it is welcome.
Posted by paul, Dubai, UAE on 20 July 2009 at 10:17 UAE time
Are these 'experts' the same ones who even this time last year were confidently predicting Dubai was special, Dubai was immune to the global crisis, Dubai could not possibly crash?
AB is clearly being leant on from above to provide 'good news' stories, hence the focus on the unsubstantiated positive spin from a real estate company and not on the last paragraph from a research company, which is overtly negative.
The crash is ongoing, but expect the real estate industry to predict the bottom every single month for the next 2-3 years.
Fewer people and more property is not a recipe for a recovery or stabilization in rents. To suggest otherwise is only highlighting the real estate industry's dishonesty, or possibly just complete cluelessness. Things have a long way to fall yet, and rents may well approach a level of little more than service charges with the amount of empty property that Dubai will have by this time next year.
Posted by EA on 20 July 2009 at 08:29 UAE time
call me crazy, but i'm getting a distinct feeling that arabian business is spreading rumours about a recovery on purpose... every other day there's an article about dubai RE recovery in collaboration with asteco. useless propaganda. dubai RE is still on its way to the bottom of the sewers and all your pitiful articles and their so called surveys about how the recovery has begun are just there for make belief
keep writing them though... it puts a smile on my face in the morning to see how hard everyone's trying to bring back confidence in the lie that is dubai's RE boom
Posted by Vincent, Kuwait, Kuwait on 20 July 2009 at 08:17 UAE time
Ha Ha Ha Ha Ha Ha. Nice sense of Humor.
Posted by Mike, Bangkok, Thailand on 20 July 2009 at 08:09 UAE time
Come on all you "experts" stop making bald statements and demonstrate some facts.
It was exactly this don't worry property prices are always increasing in value that brought the worlds economiies to their knees
Posted by Punky Brewster, Dubai on 20 July 2009 at 08:08 UAE time
Who decides to put this on the net, saying recovery is in sight? I am in the market to BUY something, but the high fluctuation in prices for apartments is ridiculous. Besides, would I want to buy a 2 Million Dirham home, and see it drop 10 % the week after? I don' t think so. Stability will ONLY come once the GOVT changes/relaxes the LAWS, helping out BOTH the parties. At present, only the developer is at an advantage. I think the experts are prob doing their Jobs, saying what the Bosses want to hear!! Reality Checks Needed, BADLY!!