More housing units in Dubai
Dubai’s property market is anticipating the impact of a new housing inventory to come on line in the remaining part of the year.
The market is preparing to welcome 20,000 apartments and 3,500 villas, which will be delivered in this year, says a research report prepared by National Bank of Abu Dhabi.
In June 2013, Dubai had approximately 400,000 apartments and 60,000 villas, says research report on Dubai property sector.
However, Samir Munshi, managing director of Orion Holdings, a Dubai-based property firm disputed the inventory numbers. “I completely don’t buy these numbers,’’ he told Khaleej Times.
Infact, Munshi saw a huge demand for housing on the back of rising consumer confidence, new businesses opening up every day and the economic boom, which will come with the announcement the nation is eagerly waiting to be made in the comings months, the Expo 2020.
Munshi reassured property investors that the property boom was here to stay for another two-three years, which will keep the property prices boiling. He was confident to forecast that property prices would even hike 10-15 per cent by the year-end from current price levels depending on the locations.
According to Real Estate Regulatory Authority in 2012, total number of investors in Dubai property reached 18,635 individuals with total investment worth Dh58.67 billion. GCC nationals invested 30.2 per cent; foreign investors purchased 61.04 per cent while Arabs invested only 8.3 per cent.
“In August, Dubai average residential listed sales prices rose 36.6 per cent year-on-year. Demand for high quality units is still high but most people are searching for affordable units. High end units in Palm and Downtown are still 60-70 per cent lower than their peak values in the third quarter 2008,’’ says NBAD report.
Villas were the preferred unit types, prices in locations such as Arabian Ranches and Dubailand are currently around 30 per cent less than the record values, it said.
In August, Dubai average sales prices rose 3.1 per cent month-to-month basis to Dh1,139 per sqft.
In the same period International City average sales price grew by 68.33 per cent year-on-year. Dubai real estate market after declining for the 40 months, started to recover in May last year, while recovery in Abu Dhabi began in January this year.
Rents continued to increase for all the areas in Dubai, in August. The posh areas saw highest increase of 40 per cent plus on year-on-year basis including Downtown, Dubai Marina, Palm Jumeirah.
In August, Sports City showed highest increase of 48 per cent in rents followed by the international City, where apartments were expensive by 42 per cent, as property expert Samir Munshi says; there was 100 per cent occupancy level in these areas. The rental cap remained effective and protected the current lease agreements, the report said.
In the rental market, the incentives are disappearing, payments in single or two bank cheques is becoming the common method, according to NBAD report. The report sees relocation to Sharjah for affordable units will continue.
According to NBAD research, after Downtown Dubai and Palm Jumeirah, the third most expensive neighbourhood to rent in Dubai is Dubai Marina which saw an increase of three per cent on month-to-month and 28.7 per cent in a year-on-year comparison.As housing cost increase most of the lower income residents will be forced to move out to more affordable regions and even to Sharjah.
In August, the rent for per square foot in Dubai Marina rose 18.75 per cent year-on-year to Dh85.6 per cent.