The property market is well and back on track. Demand is on the rise, pushing rental and sales prices up. More potential tenants are surfacing, comforted by the enforcement of the Tanweer law that has been procured to protect potential purchasers and render the market more transparent.
A swathe of projects, completions and off-plan developments have once again begun transforming from developers’ blueprints into real affordable estate in the UAE. According to a report issued by the International Property Show (IPS), a total of 40 projects worth Dh131 billion were launched in 2012 and Q1 of 2013.
Great value property
And what has been particularly noticeable, amid the raft of new projects announcing themselves into the public domain is the swathe of mid-range, affordable accommodation coming online.
In a statement released at the end of last year, Niall McLoughlin, Senior Vice President, Damac Holdings, commented on the emerging trend: “There is a raft of properties coming in the market at a more affordable price for the middle management professionals. They are being built along Al Khail Road and in International Media Production Zone, where the infrastructure is yet to fully develop.”
Of the existing developments, Jumeirah Lake Towers (JLT) is fast becoming a preferred destination for the middle and upper middle class segment, according to findings by Dubai-based real estate consulting firm Unitas Consultancy in its report released in March this year titled Home Ownership: Dubai’s Road to Prosperity 2013. One two and three bedroom apartments are preferred choices for both investors and end users. Owner occupied home ownership now accounts for nearly one in six transactions in JLT, Dubai Marina, Greens, Arabian ranches, Springs and Meadows. Sameer Lakhani, Managing Director, Unitas Consultancy says, “The growth of end-users indicates the maturing of Dubai’s real estate market as compared to other international cities. Regardless of price movement, the number mortgages has exhibited a steadily rising pattern, indicating a shift from an investor dominated market to an end-user owner occupied society.”
Though 40,000 units are set for delivery over the next three years in Dubai, a substantial chunk of them will crop up in decentralised areas, which may not be ideal locations for expats looking for accommodation close to the city, which is why developers can afford to market them at lower rates.
Expect to see more mid-range projects launched in the coming year as powerhouse realtors look to exploit current conditions and return to off-plan sales.
However as road networks are improving and shopping, education and health care is included in each development, word from the industry is that the prices won’t remain affordable for long.
Elaine Jones, Frics and Property Consultant, writing in GN Media’s Property Weekly, observed, “For those buying a residential property to live in, most particularly a property that has already been occupied, with good local infrastructure, the prices have already begun to rise.”
Indeed, plots popular with expats such as Discovery Gardens and Arabian Ranches have seen rental rates, year-on-year increases of 27 per cent in Q1 of this year.
While the mid-range sector has been able to piggyback on the recovery initiated by the high-end sector and offers buyers economically-viable options for sales and rentals, indications show the luxury segment is set to take-off thanks to major off-plan projects such as Emaar’s Burj Vista and Damac’s Lincoln Park. It’s indicative of the confidence circulating among the top-tier circles.