Following an admirable recovery, sentiment in the UAE’s real estate market is more positive than it has been in a long time. And buyers and sellers are taking advantage of the hustling activity comparable to the pre-2008 boom. Queues are once again snaking outside developers’ sales launches with police being called in to regulate frenzied buyers who have taken to lining up for days on end.
The market is showing that established areas are in vogue with buyers. Recently completed master plots such as Downtown Dubai and Saadiyat Island are benefiting the most from the recovery, while an influx of units is expected to hit the marketplace over the next three years.
“Although there’s still a great difference between the overall markets in Dubai and Abu Dhabi, the capital is still pretty much in a downturn, even if it is starting to improve, whereas Dubai has seen 12-18 months of growth. Properties in both emirates have performed well so far this year,” says Matthew Green, Head of Research, CBRE — the world’s largest commercial real estate services firm.
“But generally Abu Dhabi is still seeing deflation of rental rates and stagnation in sales pricing. Dubai has obviously been a different story, we’ve seen a 22 per cent growth in rent year-on-year (y-o-y). So the markets are positioned very differently in that respect,” Green says.
Here are some of the standout properties that have been pushing the market’s growth so far this year.
When it comes to apartment sales, so far this year Discovery Gardens has witnessed a remarkable surge in activity and has been an outstanding performer. A wave of expats looking to set-up camp here are either finding there’s nothing left or that demand is so high, it has pushed a unit out of their preferred price range. Sales prices have increased by 33 per cent to Dh6,450 per square metre, according to research carried out by Asteco.
“Demand and rates are expected to continue to grow. However, this will also mean that some tenants and buyers will be priced out of certain buildings or communities,” says John Stevens, Managing Director, Asteco Property Management.
Apartment rental rates also grew. Annually, a two-bedroom unit in Discovery Gardens now leases for Dh70,000, which represents a 27 per cent y-o-y increase.
The Residences, St Regis Saadiyat Island Resort
Abu Dhabi’s continual evolution into a requisite hybrid of leisure and culture offerings has been good news to recently completed luxury projects. “The newer projects such Tourism Development Investment Company’s (TDIC) beach residences have been performing well this year,” says Green.
Eighty-five per cent homes at the Saadiyat Beach Residences and Villas have been sold since the completion of the luxury waterfront development. And the nearby Saadiyat golf course is enticing more potential buyers to build their own customised property: 60 per cent of the plots developed on the island have already been sold, according to TDIC figures.
TDIC’s other luxury waterfront development, the Eastern Mangroves, which houses apartments and Anantara’s hotel property, has been operating close to full capacity in 2013. Its resounding success has prompted the launch of a second phase: The Promenade Apartments. These will be available for lease. TDIC says it has noticed a significant improvement in Abu Dhabi’s real estate market, which has brought back confidence to the investment sector. The availability of liquidity and attractive bank financing options have offered TDIC the opportunity to build on the ground work laid by the properties on the Eastern waterfront.
A great chunk of Nakheel’s staggering first-quarter net profits — all Dh491 million of it — have been largely thanks to the handover of units on the Palm Jumeirah development since the company’s restructuring in the late 2011. Though no exact figures for each of Nakheel’s individual properties are yet available, Ali Rashid Lootah, Chairman of Nakheel, in a statement issued last month cited the master plan development on the Palm, which will soon include the Nakheel Mall, as one of the main drivers of Nakheel’s stellar performance in 2013 so far.