Despite industry experts making claims of a market slowdown, many believe properties in Dubai are poised to see growth over the next five years, especially as the Dubai Expo 2020 looms closer.
Dubai property prices are indeed softening up as a report by the UK-based GPG (Global Property Guide) has declared that the pace of decline is just below 3% for the first quarter of 2015. This is the first quarterly decline since the second quarter of 2011.
Global real estate consultants, JLL expect house prices on average, to sink by at least 5 to 10 percent this year.
The IMF has pointed out that since Dubai has a diversified economy which depends less on oil to fuel it, a 5% growth is expected this year. For comparison’s sakes, let’s take into account gross rental yields of Hong King (2.82%), India (2.2%), Singapore (7.2%) and London (between 2.72% and 3.2%).
Dubai could have edged ahead even further in terms of prices and availability had properties been bought along the same positive trend that dominated 2012.
It should be noted that since Dubai is widely considered an international city with diverse markets, investors from around the world today should be giving serious thought to Dubai as an investment hub: the market hasn’t quite reached it’s peak (despite experts saying otherwise) and many opportunities lie in wait. Dubai is one of the few places where you can get remarkable equity gains and good cash glow.
If you’re planning on renting residential or commercial properties for rent in Dubai, this is a good time to even buy properties in Dubai – equated monthly installments are lower than their monthly rental outgo. However, do keep in mind that it is now a prerequisite for buyers to surrender a 25% down payment when purchasing properties in Dubai.
Dubai is set to create well over 250,000 new jobs owing to the upcoming Expo 2020. A population growth shy of 5% per year means almost 90,000 units to be delivered by 2018.
Still need compelling reasons to buy properties in Dubai? Unit prices have dropped by about 15-20% depending on what areas you go for, from the ‘peak hit’ season in the second and third quarter of 2014. This is considered a healthy price correction as prices had appreciated by as much as 60% in the 18 months that followed, given the recovery which commenced after the Arab Spring.
78 new projects were launched in 2014 – the Dubai Land Department revived 43 stalled projects worth more than 10 billion Dirhams through its Tayseer and tanmia initiatives. In 2014, real estate transactions touched 2018 billion Dirhams; British, Indian and Pakistani nationals also contributing heavily to the expat investor list.
Dubai is currently seeing a stabilization phase and generally, the market will be going up at a steady pace, somewhere in the range of 10 and 15% per year. If this weren’t enough, there’s Dubai high security and zero-taxation policy. In addition, there is hardly any other city you’ll find around the globe where infrastructure development gets completed in record timelines. In contrast, other cities and countries around the world have taken several years to complete infrastructures of the same scope caliber.
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