Dubai Real Estate Market: Golden Days Ahead

Dubai real estate market is facing tough time with decline in both clients as well as price. The supply is also declining and its just 15,000 new residential unit's supplies are entering in the market.
2015-10-20

The global real estate market is facing tough time and Dubai is not the exception. However there is good news for Dubai property market. Read this article till end.

Current Market Scenario

Dubai real estate market is facing tough time with decline in both clients as well as price. The supply is also declining and its just 15,000 new residential unit's supplies are entering in the market.

The Real Estate market in Dubai is maturing day by day. Now the speculations in the market is already killed by wielding mortgage caps and a doubling of transaction fees etc. The global slowdown in oil prices is already seen by globe and further slowdown in oil prices is not expected. All such factor together could bring only 12% drop in prices in year ending 2015. This is very important indicator of kind of support exists for current prices and also the very feeble probability that market will correct further.

Market Outlook by DigitalSalesMen.Com

Market will not rest on current property prices, it will go northward as many factors will boost the demands. Some of them are

  • Approximately 200,000 visa issued in each of first two quarters of 2015. It will raise the population and hence demand for properties in Dubai.
  • Dubai's Real Estate slowdown has interesting fact that price falls continuing to outpace rental value declines. Which means Rental yields is continuously increasing. Now when Rental yields are rising, real estate investment is now more interesting who want to invest in Dubai properties for generating income.
  • Supply in 2015 is significantly lower which means supply related pressure will be reduced on prices and also occupancy will be increased.

The every market has a boom, crash and recovery cycle. In some cases ripples may be more and in some cases its less. Dubai market is maturing with expectation of less amplitude of ripples but its definitely at the juncture of recovery in the boom, crash and recovery cycle.

Future is always bright for Dubai. There are many reasons to why Dubai will witness a sound economical growth and hence real estate market.

  • Port at Jebel Ali is expected to become the world's largest in the next 15 years
  • Dubai emerging as China's logistical hub for the Middle East and Africa
  • Expo 2020 in Dubai and the massive economic activity linked to it, so demand is seen gathering momentum in a steady pace over the next seven years and beyond
  • Dubai population is always increasing which means the demand for space will always increase.

What kind of property to buy

If you are looking to buy residential property in Dubai, you need to buy apartment rather than villas. Apartment has better chance of price appreciation and also rental yield is good. Apartment lease rates decreased a nominal 0.4%, while sale prices decreased 2.7%, pushing yields up to 7.4%. Lease rates for single family homes decreased 1.3% and sale prices decreased 2.6%, which pushed yields up to 4.8%.

Hospitality related properties (Hotel, furnished apartment etc) is also another avenue to invest as Predicted visitor growth of between 7% and 9%, on target to achieve 20 million visitors per year by 2020 which means consistent growth in this market for years to come.

The author Anil Kumar Gupta is Founder and Chairmen of DigitalSalesMen.com which is helping many real estate businesses to work as their Digital Marketing Team. Author can be reached at Anil.Gupta@DigitalSalesMen.com or refer website www.DigitalSalesMen.Com