Real Estate Market Looking Stable

Dubai real estate market is reaching stability with positive signs in rental of 1 per cent in January and 6 per cent in February. This is the initial positive upward trend that can be noticed after nine months of decline. Rental prices in Dubai stabilised last November and recorded strong gains until February with a 6 per cent month on month increase. Prices were up by 6 per cent in February after a 13 per cent drop following the Dubai standstill announcement last November.

The survey suggests that areas which witnessed the highest number of handovers recently actually saw declines in February; namely Downtown Burj area with a 5 per cent decrease and Dubai Marina with 10 per cent. According to the report, rental rates in Dubai were helped by the spillover from neighbouring emirates (particularly Abu Dhabi) which anecdotal evidence suggests gained momentum last year. The report said mortgages have continued to tighten ahead of the Dubai World debt restructuring proposal. Mortgage volumes fell to 11 per cent in February from 25 per cent in September. Cash buyers were seen to be picking up smaller, more affordable units in areas such as International City (up 9 per cent), Greens (up 11 per cent) and Jebel Ali (up 10 per cent). The report said that the restructuring of Nakheel which controls 50 per cent of expected supply is predicted to lead to further project delays and cancellations supporting sector dynamics. However, expected recovery in the global economy and stronger growth in the UAE this year is likely to support demand.

Real Estate Market Looking Stable