Dubai property market: How is it looking today?
Dubai property market is always a hot topic, with investors, homeowners, businesses and anyone else interested in the market keeping a close eye on what is happening. Indeed it is no secret that Dubai property market has resulted in many people making small fortunes from their investments, but how has the market been performing of late, and what is the future?
Dubai property market: Recent years
Prices in Dubai have seen huge increases in recent times. Indeed property consultants Jones Lang LaSalle reported that prices jumped by a huge 56 per cent between mid 2012 and mid 2014, with the Dubai property market impressing experts all around the world with its ability to recover from the 2008/2009 recession, which saw property prices slump in many regions around the globe. Whilst the price increases seen since then were certainly great news for investors, there was a slight fear that such rises were unsustainable and that they could lead to a repeat of the property “bubble” of a few years ago. However it would seem that Dubai has learnt from mistakes made in the past and is now much more mature, with developers today taking a more sensible approach to developments. Price rises have slowed down in the final few months of 2014 and the beginning of 2015, with most experts agreeing that this is extremely good news for the long-term stability of the property market.
Dubai property market: 2015
Craig Plumb, head of research at Jones Lang LaSalle, recently told The National: “House prices rose 56 per cent in the two years to June 2014 and Dubai was pricing itself out and becoming too expensive to live and to work here. “We’ve reached the peak of prices for residential in Dubai and that’s a good thing. The company is predicting that prices and rents will actually decline this year – and it says that falls could average around 10 per cent.
As it was predicted, during 2015 the market has seen the most intense price correction due to overpricing and various macroeconomic reasons. Although many investors were not happy with their assets depreciating, experts said that the price correction was necessary for Dubai property market in order to avoid another crisis. However it is worth noting that rental rate during this period declined much slower than the sale prices.
Dubai property market: 2016
In 2016 the slump rate has declined substantially. Although the prices still fall on the average now, certain areas have seen minor growth which indicates that the market is getting close to the recovery period that usually follows decline. Hesitant at first, experts now mostly agree that the prices will eventually start rising, but the question is ‘when’. The turning point is predicted to happen during 2017 although right now it is difficult to define the exact date.
Many people will be looking beyond 2016 and ahead to the Dubai World Expo 2020, which is a highly prestigious global event that is being held in the UAE region for the first time. The Expo is expected to bring 20 million visitors to Dubai, which could mean huge economic benefits for the city. Many people believe that the tourism and hospitality sector in particular will benefit from the event, leading many investors to look at hotel property as an avenue for solid returns.
In 2015 the emirate welcomed 14.2 million overnight visitors while the same index for 2016 is expected to account to more than 15 million tourists. The major efforts are aimed at extending Dubai’s tourism and hospitality offer by adding new iconic buildings and theme parks to the emirate’s impressing list of landmarks.
Dubai property market: Where can I get the latest information?
Dubai property market is constantly changing, so it pays for any property purchaser or investor to keep close tabs on market developments. Property consultants such as Jones Lang LaSalle and Knight Frank regularly publish research and market insights, which can be a great source of valuable information. As well as the internet, don’t forget to talk to an expert. There are many property agents in Dubai who can provide a great source of help and advice.