Is Dubai Real Estate market stabilizing?

According to some recent reports, Dubai real estate sector has shown signs of stagnant growth in the first quarter of 2011. This indicates that the market is on its way of stabilization, but we’ve been listening this from the beginning of 2010 when the earliest signs of stabilization by 1% or 2% in first 2 months were seen in property sector of Dubai. The same slow but steady growth continues in 2011.

Since 2010 prices in some areas of Dubai shows signs of stabilization and recovery where supply is matched with the demand or where the quality of living is high, still there are many areas facing heavy decline in prices due to oversupply or too many residential units. Some people are of the view that the prices of residential rental places have touched the bottom. On the other hand, the price of villas are showing better growth rate as compared to prices of apartments and houses. Palm Jumeirah and DIFC are still high priced areas due to quality of amenities or facilities provided.

Stabilization in transactional volumes is also an indicator of stabilized real estate markets. Talking of Dubai real estate, a report has been issued by Cluttons stating that Dubai property transactions trends have seen an increase in January and February, showing that the market is stabilizing, slowly but surely. Also, Dubai government with the help of DREC is trying to corporatize Dubai rental and leasehold assets under a single entity. This has allowed Dubai government to balance the rental market according to demand and supply. Now it is in a better position to revise the rents in order to set the track of Dubai properties sector towards the path of stabilization.

The role of major financial players cannot be neglected. Standard Chartered, Gulf Finance and Barclay’s are the leading banks engaged in providing mortgage loans to the credit worthy customers in Dubai, at competitive terms. It has also increased the financial position of the buyers looking to invest in Dubai real estate.

In a nutshell, Dubai Property market is stabilizing but at a very slow pace that might not be good enough to bring back the good old days. However, the speed of recovery process can be increased if government of Dubai and major financial players keep going in the right direction. They should be looking to inject equity in the market and try to create more employment opportunities, which will increase the demand of Dubai properties.

Similar Posts:

Share

Leave a Reply