Dubai to draw greater regional interest
01 January 2018
Recent geopolitical developments on the regional front and new residential legislation in Dubai – with a prime focus on affordable housing – are both likely to impact the emirate’s property market, according to leading international real estate consultancy Cluttons.
The geopolitical changes across the region are set to draw attention to the UAE and Dubai, in particular, from regional investors seeking an investment safe haven, states Cluttons in its Dubai Winter 2017 Property Market Outlook.
Faisal Durrani, the head of research at Cluttons, says: “Overall market conditions in the emirate have been relatively healthy. Going forward, we see regional developments and local legislation playing a big part in Dubai’s property market. We believe that the Dubai Government’s initiative to focus on affordable housing is extremely positive and is a watershed moment for the emirate. The change will help Dubai avoid some of the lessons learned by more developed cities around the world, especially with regards to curtailing the emergence of poorly connected, low-income neighbourhoods that are segregated from the rest of the city, as is the case in many other global metropoles.”
“While exact details around the legislation are yet to be confirmed, we expect to see a balanced approach between the presumed establishment of quotas around the provision of affordable housing that is both built-to-rent and built-to-sell, so that both aspiring buyers and tenants, priced out of city centre locations, can benefit,” he adds.
On the residential market, Cluttons says overall prices slipped by 1.9 per cent in the three months to the end of September, following on from the 1.5 per cent drop in Q2.
The annual rate of change at the end of Q3 stood at -5.6 per cent. Villa values experienced their weakest performance in almost two years, with prices falling by 2.8 per cent in the three months to the end of September.
Apartment values experienced a drop of 1.3 per cent on average, taking the change during the first nine months of the year to -5.5 per cent.
Murray Strang, the head of Cluttons Dubai, says: “These markets, in particular, have faced competition from surrounding developments that are newer, cheaper and often more affordable.”
“Arabian Ranches has faced stiff competition from nearby Nshama, while Al Furjan and the second phase of units at Dubai Investments Park (DIP) have improved the choice for would-be buyers and investors in the Jebel Ali area,” notes Strang.
The supply pipeline, on the other hand, continued to strengthen, with nearly 30,000 units announced during the three days of Cityscape Global in September.
Durrani points out that a total of 79,738 units are likely to be completed over the next three years.
Cluttons says the office market remained very stable.
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