By Daniel Shane
Report highlights influx of capital from Arab Spring countries, more favourable lending
Residential prices in Dubai soared by almost a third (30.6 percent) in the first six months of 2013, a new report found, on the back of an influx of refugee capital and as more renters turning to buying.
The analysis, by global real estate firm Cluttons, said that in Q2 of this year alone, villa prices in the emirate increased by 21 percent on average, compared to a 24.4 percent rise in the same period of last year. Apartment valuations recorded capital value increases of 25.1 percent, up from a 13.4 percent uptick in the year ago quarter.
The report found that property prices were still 31 percent below their market peak in 3Q2008, however.
Cluttons said that an increased level of job creation was pushing up prices, as well as investment spurred by political unrest elsewhere in the region, increasing rents and more favourable lending conditions.
"The resounding success of Dubai residential so far this year should not come as a surprise given the magnitude of the correction recorded during the bottom of the market; we are still far off the previous peak, when growth was far more unsustainable,” commented Steve Morgan, head of Cluttons Middle East.
“The acceleration in residential capital values this year has been underpinned by robust levels of job creation and a rising population, rather than being fuelled by 'fly-buy' dealers, as was the case in the past. We are yet to see a definite solution on the matter, although this is less concerning than in 2008, given the increased number of end-users in the market," Morgan added.
The Cluttons report added that rising costs were also having a spillover effect on the Sharjah market, where rents rose 7.1 percent in the second quarter.For all the latest real estate news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
so who is falling for this again
I remember the drunken buying frenzy of property in Dubai in 2008,when the property market became overheated and real estate prices were becoming ridiculously high.
Most of these properties are made of cement not bricks after 25 to 30 years they will need to be pulled down, this reality needs to be factored into the price. At the time of the sudden property bubble burst many of the investors unable to pay installments left the country in a hurry. If this market is not properly regulated history may repeat itself. The market needs to be 100% transparent and facts need to be printed in the media, not opinions and predictions. In Ajman thousands of flats were sold as off plan, but investors were never told that the developers had not even contracted anyone to supply water and electricity for this project. I take all these reports with a pinch of salt and propaganda. How can some one in their right mind pay dhs 350,000 for a studio in International city with a life of 20years
after 20-25 years many of these buildings will have fallen down so no need to be pulled down!
I went for an off plan during the last boom and got caught with a property that is only now just handing over. The developer basically took all of the money and then did nothing for 4 years. What I have now is a poorly built box in the middle of nowhere in Shahama. That was then and this is now, if you are buying built property such as EMMAR then ok I see a worth to a degree however if we are just going to let all of these bods with their masters cheque books swarm all over the place creating another idiotic frenzy then buyer beware. I think the rental market needs to be heavily regulated as these twerps are once again 6 to every rental driving prices up to idiotic levels and giving false information. We HAVE OVERSUPPLY, lets not forget that and POORLY BUILT OVERSUPPLY!
How can some one in their right mind pay dhs 350,000 for a studio in International city with a life of 20years
with all respect but people from broken countries will pay 350000 aed if not more if geo political instability further deteriorates in countries like syria,egypt,lebanon.