Dubai Property Market Revival Gathers Momentum in Q2, JLL Report Suggests
iNVEZZ.com Thursday, July 25th: The residential property market in Dubai is experiencing a broad based recovery with prices and rental values on the up, a new report from real estate advisory firm Jones Lang LaSalle (JLL) has shown.
According to JLL’s “Dubai Real Estate Market Overview”, published last week and covering the second quarter of the year, the Dubai property market remains active with increased volumes of transactions as property investment sentiment continues to improve amid signs of an expanding economy and a return of business confidence in the emirate.
**Residential Property Prices on the Up, But May Ease on Supply**
JLL quoted findings from REIDIN, a real estate information company focused on emerging markets, whose second-quarter Residential Sale Index improved by 16 percent year-on-year and three percent quarter-on-quarter. Apartments outperformed villas, up 17 and 12 percent, respectively. Despite the recorded improvement, both segments remained below their peak values from the third quarter of 2008, with villas still down 17 percent and apartments down 19 percent since then, JLL noted.
Rents also improved in the second quarter, according to the REIDIN Rent Index, rising 12 percent year-on-year and three percent quarter-on-quarter. The villa rent index was up 13 percent as compared to last year and achieved its peak value in May while the apartment index was up 12 percent on 2012’s second quarter, but remained 24 percent below January 2009’s level.
JLL’s report also indicated that the growth in prices and rents in Dubai might ease due to the high levels of future supply, with 36,000 more residential units expected to be added to the current stock by the end of 2015. Other factors which may affect growth include tenants relocating to cheaper locations, limited debt availability, and more mature market regulations, JLL remarked.
“Following the recent rises in rental values some tenants have started to consider the most affordable secondary locations, a move that has resulted in a slower rental growth in some well established areas,” the report read.
!m[Damac Properties May Bet on Future Growth with London IPO](/uploads/story/4337/thumbs/pic1_inline.jpg)
**Future of Dubai Property Market “Very Strong”**
Dubai’s largest privately-held real estate developer, Damac Properties, is very optimistic about the market’s future and the company’s position in it, its Chairman Hussein Sajwani has told The Financial Times. In an interview on Monday, Sajwani said: “The market in the next three years will be very strong, especially in the high end”.
According to a company press release, Damac is currently focused on delivering hotel apartments in Downtown Dubai, a luxurious district that attracts over 65 million visitors every year, and has become a hub for people coming to view the world’s tallest tower, Burj Khalifa. The developer also hopes to offer global investors exposure to projects in the rebounding market of Dubai and other countries in the region, such as Lebanon and Saudi Arabia.
Amid its renewed expansion plans, Damac is also eyeing a London stock market listing, Sajwani hinted on Monday without disclosing any details, as the decision was not final yet.
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