Analysts predict 2015 will be a good year for the property market but are mindful of the potential obstacles - housing supply, currency fluctuations, and oil.
Ranked 186 in the previous report, Dubai is currently placed at number 39 in the list of top 50 cities, with investment volumes up 2174.3 percent to $3.68 billion (Dh13.5 billion). Interestingly, the rate of increase in property prices in Dubai has slowed, but, compared to 53 other global cities, they are still increasing at the fastest pace in the world.
“The concerted efforts of the Dubai government have helped manage the supply pipeline, and, at the current trends of population and tourism growth, demand is set to remain healthy,” says Mohamed Alabbar, in Arabian Business.
Thanks to the renewed interest in Dubai as a tourist destination, the revival of dormant projects as well as exciting state of the art residential and hospitality developments, has brought with it the need for more affordable housing for both visitors and construction workers.
Not surprisingly this has impacted the market, with the emirate’s mainstream market outperforming the luxury end of the market. This change is also partly due to the mortgage rules introduced by the UAE Central Bank which are less restrictive for those buying residential property worth below Dh5 million.
The Dubai Land Department has stated that the total volume of real estate transactions reached Dh113 billion in the first six months of 2014. According to Cushman and Wakefield report, New York and London top the list, with Tokyo a close third on the property podium.
Total global real estate investment volumes rose 17.2 percent to $788 billion in the year to June 2014. In the list of top cities for hospitality, Dubai was ranked third, ahead of Singapore, Hong Kong, and Paris. London took the top spot in a list of 30 cities followed by New York.
By October 2014, Dubai, had 77 five-star hotels, 83 four-star hotels, and 66 properties in the three-star category. The Emirates are planning to increase mid-range hotels, to meet the growing visitor demand expected for the Expo in 2020, taking place from October 20, 2020, through to April 10, 2021.
In the world of retail, Dubai is 30th on the list with New York winning over London. Dubai is home to a plethora of luxury shops, including Dubai Mall, one of the largest malls in the world. With Dubai property developers insatiable appetite for bigger and better, Dubai Holding announced plans to start construction on Mall of the World, with the intention of being the largest mall in the world by 2025.
Looking forward to 2015, there is cautious optimism, with a strong desire to avoid the boom and bust of 2008/9, and instead of aiming for steady growth. Matthew Green, the head of research and consultancy for the UAE at CBRE Middle East region, says: ‘The residential market has shown signs of stabilisation over the past six months, across both sales and leasing markets. We expect this to be a similar outlook for this year.'
After a successful 2014, Dubai’s commercial sector looks set for further growth this year. With a solid economic outlook, Dubai’s position as the headquarter city of choice for global corporates in the Middle East looks set to continue.
As the new year starts property investors have been told that Dubai apartments have already seen significant rental income growth - rises of between six and 25% in Dubai’s major residential markets. Rents across the UAE are expected to rise further ahead of the World Expo 2020. The six-month-long trade fair is set to boost the size of Dubai’s population and increase visitor numbers, both of which will increase the demand for rental accommodation in the region.