Dubai property correction likely, says Better Homes

A price correction is likely within the Dubai real estate, according to Billy Rautenbach, director of operations at Better Homes.
Dubai property correction likely, says Better Homes
By Administrator
Mon 03 Sep 2007 04:00 AM

A price correction is likely within the Dubai real estate, according to Billy Rautenbach, director of operations at Better Homes.

"I hope to see more stability and more affordable properties in the rental market because at some point, a correction is likely. This hasn't happened so far because of project delays and an increase in numbers coming to Dubai but I believe there will be a levelling at some point because that is the nature of real estate".

Despite this outlook, Rautenbach is reporting a positive year for Better Homes and the Dubai real estate market.

"With many projects still under construction, well-priced completed properties are still selling well. In general, prices have increased from an average US$330,000 to US$490,000.

The good news for buyers is that there is an emerging pattern where sellers are being more realistic with selling prices, possibly in light of new products entering the market and increasing options for buyers."

Since the start of the year, the Dubai Land Department has implemented several laws and established a Real Estate Regulatory Authority and on the product side, the market has seen the delivery of units on three key projects. Finance has also emerged as a key contributor to the growing market, she believes.

"Finance and mortgage has been the biggest contributor to the industry in the last year. More and more international finance companies have entered the market and with the product now being tangible, banks are more willing to lend. Finance up to 99% has been offered on Jumeirah Beach Residence, making owning a home more viable and affordable."

Rautenbach believes another plus point for the industry was the delivery of products on three large developments, the Jumeirah Beach Residence, the Palm Jumeirah and International City.

"Delivery on these projects has been significant, creating an availability of stock across the pricing spectrum. The supply has brought desperately needed units onto the leasing market, helping to create more competitive rentals.

"It is good news for the market in general and we hope to see an emerging trend in terms of rental rates as more and more units are handed over," she added.

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