Limited new residential supply has ensured Ras Al Khaimah’s real estate market has not had to go through the price and rental volatility recorded in Dubai and Sharjah during the first-half of the year.
So much so, gated communities in Ras Al Khaimah have outperformed the rest of the residential market within the emirate, according to the latest update from CBRE, the consultancy.
These locations are also fetching “significant premiums” for the investor. “Apartment lease rates in the developments of Al Hamra Village and Mina Al Arab are faring comparatively well with a two-bedroom unit ranging from Dh65,000-Dh75,000 and Dh60,000-Dh70,000,” the CBRE report states.
“A two-bedroom villa in Mina Al Arab ranges from Dh85,000-Dh90,000, a three -bedroom will range from Dh110,000-Dh140,000 depending on the size, view and location in the masterplan.”
But this is a factor of lower new supply meeting consistent demand. But new stock is coming through, with the “imminent handover of units at the “Pacific” development on Al Marjan Island,” the report notes. “The project, which is being developed by Select Group, comprises 1,440 apartments, with the handover process due to start during H1-17.
“New units are also expected within the Mina Al Arab development, with the handover of Phase II of the Flamingo Townhouses expected during Q4-16. In total, 57 new units are set to be delivered.
“Development activity in major masterplan locations such as Al Marjan Island is likely to pick up in the short to medium term, with a number of local and international developers having already purchased plots with a view to delivering mixed-use schemes to the market.”
But developers will need to watch out for global currency fluctuations as a potential spoiler of their prospects. The continued strength of the dollar is creating “subdued investment conditions across the country” and that will be a downside to demand prospects.
“However, with a stable economy and continued demand for quality housing, any downside is likely to be modest and short lived,” CBRE reports.
“In terms of future growth potential, the key economic drivers for RAK will remain as the government, specifically in the form of quasi-government development companies, which are fundamental in evolving the Emirate’s burgeoning tourism market. RAK’s growing industrial and manufacturing sectors are also expected to maintain their current rate of expansion, driven by local names such as RAK Ceramics and RAK Cement.”
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