Dubai’s property market is growing and very importantly growing sustainably, with developers all round showing signs that they have learnt some very important lessons from the past; chief among those the need for development to be both sensible and maintainable.
This is especially evident in the diverse range of developments currently being undertaken in what is still this industry’s most prominent sector, residential property.
This positive outlook was expressed during a panel discussion that featured Raza Jafar, CEO of ENSHAA, Craig Plumb, Head of Research at JLL MENA, and Andrew Chambers, CEO of GGICO Properties.
Discussing the short to medium term situation in Dubai’s property market, the panellists agreed that although the Dubai market has once again been picking up over the past one to two years up — reaching levels close to those prior to the 2008 level — the growth rate has levelled out to a sustainable level as of the second quarter of this year.
ENSHAA CEO Raza Jafar remarked, “There is a great deal of potential in the Dubai market, especially when you consider its position in comparison to other major international cities.”
Dubai’s importance as a global financial hub is well established and when combined with the strength of its infrastructure and the quality of projects being delivered in its property sector, it is clear that it compares very favourably to any other international hub, such as say New York, London, Shanghai, Singapore, or Sydney. At this point in time Dubai’s property sector is still grossly under priced in comparison to its international counterparts, which means it has the capacity to still grow significantly in the long term.
Dubai also provides excellent earning opportunities to its residents thanks to its taxation benefits, with the accompanying generation disposable income and hence people have opportunity to build up real estate assets over here.”
He went on to underline that Dubai prime real estate is currently priced at about one tenth the price of that in London, about one seventh of New York, and about a quarter of that of property in Singapore, clearly indicating the opportunities this provides for both locally based end-users and international investors.
Residential sector
Agreeing with this opinion and clarifying the recently released JLL Dubai Property Market Report, Craig Plumb, stated, “The market is on the rise in Dubai and the residential sector has certainly been the stellar performer. Average prices in this sector have increased by 64 per cent over the last two years.
“The good news now is that, while the market is still rising, it is very close to the top. Although prices are still going up at this point in time the growth rate itself has slowed down and become more sustainable, which means that the market has seemed to gain some stability.”
On issue of supply and demand in the Dubai property market, the consensus was also optimistic, at least in the short to medium term. Craig Plumb, noted that although there have been a lot of new launches, the majority of these projects are still in the launch phase and not scheduled to hit the market any time soon.
This was further underscored by the observation that the data available for the next few years shows around 15 and 20 thousand units being added to the market each year.
Taking into consideration that the total supply of residential units in Dubai is just under 400 thousand, this means that the increase in supply is only around five per cent, which is a sustainable figure in terms of Dubai’s continued population growth.