There is renewed confidence in Dubai’s real estate market this month following the publication of the “Global Markets 2015” report by international property consultants Knight Frank.
There is renewed confidence in Dubai’s real estate market this month following the publicThe report suggests three strong reasons why Dubai may be gaining the edge over cities such as London and Paris. It identifies the rise of the US dollar, the world-class nature of Dubai’s infrastructure and the high quality of life in the region as the key factors contributing towards a robust market in 2015.
Knight Frank has also pointed out that Dubai real estate offers a greater return on investment when compared with other leading cities. Currently, an investor with $1 million could buy 146 sqm of prime Dubai property, but the same space would cost $3.5 million in Paris and $5.8 million in London. Rental yields in Dubai also remain some of the most lucrative in the world.
Hafeez Abdullah, Chair of the H Holding Enterprise, which controls diversified investments in the region (including real estate), was quick to point out the positives in the report. He also expressed a belief that the rising dollar should help to eliminate much of the speculative investment from abroad that have taken place in recent years, saying: “Speculative investors are going out the door now and buyers with long-term plans are entering the realty market of Dubai.”
Abdullah explained that the dollar’s new strength was effectively limiting the activities of speculative investors in Europe, Russia, and China, where currencies were falling against the dollar. He claimed that together with new measures introduced by the Dubai Land Department (such as the doubling of transfer fees to 4% and newly introduced mortgage caps) this situation was leading to a more mature, end-user driven market.
The report also suggests that economic growth is set to drive Dubai’s real estate market, indicating that “If we take Dubai as an example, the fact remains, that by international standards, Dubai’s prime residential property market is relatively inexpensive. This, combined with the fact that the UAE economy and employment continues to grow strongly, suggests that the prime residential market in the Emirates is likely to see ongoing expansion despite new market controls.”
Global economic factors may have caused a degree of uncertainty in recent months but Dubai’s real estate market can now look forward to a secure and promising future.
Photo Credit: www.dubayblog.com
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