Business | Property
Dubai real estate market will continue to be solid investment
Price stabilisation in the UAE real estate market is to be expected over the next 12 months, but this is the sign of a maturing market rather than a lack of confidence, according to industry officials.
- Staff Report
- Published: 00:00 April 28, 2006
Dubai: Price stabilisation in the UAE real estate market is to be expected over the next 12 months, but this is the sign of a maturing market rather than a lack of confidence, according to industry officials.
"The over-zealous buy-at-all-costs approach to real estate of the last two years will make way for a more contained marketplace. This should not be seen as negative: it ultimately bodes well for Dubai as a sustainable real estate option," said W. Jonathan Wride, managing director of Capital Partners, the Dubai-based American real estate private equity fund.
Rising rents
"A slowdown in share prices and rising rents continue to make the real estate sector a very healthy investment option, whether for developers or individuals.
"Regional real estate prices are likely to peak this year as more developments come on stream, to offer buyers a chance to buy bricks and mortar rather than off-plan. There may even be a slight downward correction but a sustainable growth of around 12 per cent year on year is much healthier than any boom or bust scenario."
According to recent estimates, there is currently $45 billion in real estate under construction in Dubai, with another $45 billion in the development stages.
Property law
Wride continued: "The developments in the Dubai property law of a few weeks ago have signalled yet more confidence in the real estate market here and we expect prices to go up a few per cent in the short term as new buyers enter the freehold market."
According to Wride, developers must put fail-safe guarantees in place.
He said: "While Dubai is booming, most noticeably in the real estate sector, we must ensure that we meet and exceed the customers' expectations to build a sustainable platform for the future.
"We will fast-track best practice implementation and internationally recognised standards which will, in turn, encourage invest-ors from outside the region."
The firm is responsible for the single largest foreign direct investment in Dubai through the $1 billion Riverwalk development in the Dubai Internet City.
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