Prime Dubai property market forecast to remain buoyant until 2020

New Dubai Investment Outlook report says market will benefit from limited availability, steady demand
Prime Dubai property market forecast to remain buoyant until 2020
By Staff writer
Mon 13 Jun 2016 01:39 PM

Dubai’s prime residential market is expected to remain buoyant until 2020, according to the latest report from Core, UAE associate of Savills.

The report also said that the emirate’s affordable housing market will continue to be "something of an unstable investment opportunity".

The H1 Dubai Investment Outlook report revealed that the prime residential market will benefit from limited availability in the few established areas and the steady demand, aided by the growing pool of regional and global investors looking to re-enter the bottoming market.

Core CEO David Godchaux said: “The relative resilience of prices inmost of the established ultra-prime areas is an interesting aspect coming to the fore, underpinned by limited new supply and continued demand from UHNWI investors wanting to own ultra-prime properties in Dubai’s iconic locations such as villas in Palm Jumeirah and Emirates Hills, along with a few luxury apartments in the Downtown and Marina districts and the new Jumeirah freehold developments like City Walk.

“The trend is stemmed by the long-term investment horizons and status factors of a majority of owners of prime residential real estate in Dubai – contrasting with the many investors-speculators of pre-2008.”

Core added the number of new residential projects, driven by the affordable housing theme, have come to the market in the last few quarters, with attractive yields appealing to investors and real estate funds looking to diversify their real estate portfolio.

But Godchaux sounded a word of caution, saying: “While we do not believe strongly in affordable housing as a compelling investment in the long-term in Dubai in comparison to other segments of the market.

"We still believe there are good opportunities to seize given that most potential customers in this segment are still unable to shift to ownership due to current mortgage restrictions keeping the yields at artificially high levels.”

Earlier this month, Knight Frank said top-end properties in Dubai are outperforming the market average with prices rising during the first three months of 2016.

The consultancy's UAE Real Estate Mid-Market Review said prices in the prime segment increased 2 percent on a quarterly basis between the fourth quarter of 2015 and quarter one of 2016.

Despite subdued growth levels over the first half of 2016, Knight Frank said its outlook for the UAE’s real estate sector remained positive.

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