By Andy Sambidge
New Jones Lang LaSalle report says average prices rise 33% year-on-year while rents increase by 23%
Property prices in some areas of Dubai have now exceeded previous peaks seen in 2008, according to a new report by Jones Lang LaSalle published on Monday.
The real estate consultancy said in its Dubai Real Estate Market Overview Q1 2014 that the emirate's residential market maintained its momentum with average prices increasing 33 percent year-on-year, with average rents improving 23 percent.
"While the market remains shy of its 2008 peaks in most locations, prices in some areas have now reached peak levels," the report noted, adding that prices are expected to continue their upward trend over the remainder of 2014, but at a slower rate.
Jones Lang LaSalle said activity in Dubai's real estate investment market "remains strong".
Dubai Land Department recently revealed that the total value of real estate transactions in Dubai rose from AED154 billion in 2012 to AED236 billion in 2013.
Dubai's economy is also expected to sustain its growth momentum. According to the Department of Economic Development, the GDP of Dubai will grow 4.7 percent in 2014, with real estate one of the main drivers.
The report said Dubai's office market sustained its recovery as overall occupancy rates and prices increased during Q1.
"With occupier demand continuing to be focused on good quality space, average rents in prime locations are expected to increase with 2014 seeing a broader based recovery with increased interest in secondary office locations given the declining choice in prime locations," the report added.
Jones Lang LaSalle also said Dubai's retail market continues to improve, registering rental growth in both primary and secondary malls during Q1. "Street shops also continue to witness popularity with a number of new project launches," it said.
The report added that the emirate's hotel sector maintained its strong performance supported by a growing number of tourist arrivals. Year-to-February saw occupancy rates reached 88 percent and the report said the sector is expected to maintain its positive performance and growth, as the government introduces new initiatives to attract further tourists and diversify the hospitality sector.
Its because of these reports that investors / landlords expect ridiculously high yields and remarkable sale prices! I wonder how credible benchmark prices JLL is using for 2008! or whether this report is discussing outliers and not market norm!
the real estate people Ive spoken to say sales are soft at the moment and a correction is expected. Not sure who JLL are speaking to or how recent their data is!