Dubai property market heats up again, apartment sales rise 17% and rents are up 12% in one year. Talks revived for underwater hotel, but will it stay under water?
- Published on Sunday, 30 June 2013 09:25
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Source: Gulf BusinessDubai property is hot once again, both sales and rents are up double-digits over the past year. The pace of the recent rise suggests that there is more momentum behind it, so much so that developers are considering bringing back some of their crazy projects, which were cancelled during the last downturn. Will these projects make it this time? How much more can Dubai property rise when the number of challenges facing the world economy keeps growing?
Rents and prices of apartments in Dubai are continuing to strengthen, reflecting a broader recovery in the market with Reidin.com’s data for the month of May showing apartment rents and prices outperforming the villa segment on a month-on-month (mom) basis.
Apartment sales prices rose 2.13 per cent mom and 17.3 per cent year-on-year (June 2012 to May 2013), while villa sales prices went up by 1.56 per cent mom and 12.2 per cent yoy.
Overall, the Dubai residential property sales index for all residential increased by 4.2 points to 212.5 from 208.3, representing an increase of 2.01 per cent mom and 16.1 per cent yoy.
Jones Lang LaSalle, a property consultancy, has said property sales prices were 18 per cent higher in the first quarter of 2013 compared to same period last year.
A recent report by Deutsche Bank said property prices in Dubai saw a 6.2 per cent growth in the first three months of 2013, though apartment prices remain between 43 and 61 per cent below peak prices.
Knight Frank, a global property consultant, said property prices in Dubai rose 18.3 per cent in the past one year (March 2012 to March 2013), with the emirate maintaining its position among the top five best performing real estate markets in the world.
Rents climb 11.9% yoy
On the rental side, Reidin.com said apartment rates climbed 2.02 per cent mom and 11.6 per cent yoy, while villa rates rose marginally by 0.85 per cent mom and 13.4 per cent yoy.
The residential property lease index saw an increase of 0.43 points, from 79.37 to 80.80, registering a rise of 1.80 per cent mom and 11.9 per cent yoy.
Although JLL has said that rentals have risen in areas such as Burj Downtown, Dubai Marina and Palm Jumeirah, the new Reidin.com May figures reveal a broader recovery taking place in the market.
JLL had said: “”While well-established residential communities in Central Dubai are expected to see further price and rental growth over the rest of 2013, less completed projects in more remote areas will need more time before seeing increased demand and performance.”
Read the story from Emirates 24/7.
Trump is back in Dubai planning a golf course, see our earlier post here. There’s also talk of reviving the underwater hotel project. The good times are back for Dubai property developers… for now. There are a few reasons to be skeptical about the lasting power of this rise namely; Egypt is flaring up again, the conflict in Syria is getting worse and beginning to spread, Turkey is experiencing mass protests, Brazil and Indonesia too, talk of tapering QE scared markets so bad that there is no way QE will end soon, investors are fleeing emerging markets as fast as they can, bond yields are shooting up, commodities are dropping…. the list goes on, and we didn’t even mention all the issues with the Eurozone.