A Look at Dubai’s Real Estate Evolution
05:29Here's A Look at Dubai’s Real Estate Evolution
Welcome to the Junaid Iqbal Memon blog. Junaid is an established real estate developer. In 2014, he founded the Cloud 9 Group, which he used to not only develop an impressive investment portfolio but to also serve as his stepping stone in venturing into property and real estate development. Based in Dubai and London, he has a number of completed projects under his belt and also owns and manages several businesses in both cities. Below he shares some of the latest trends and updates on the real estate market.
Despite the continued property price and rent decline and the specter of oversupply experts have noted that the real estate market in Dubai is maturing. They have also predicted a bright future for the market as it gets ready for the Expo 2020.
A 2017 market review by Cavendish Maxwell which was unveiled last week shows that prices for townhouses, apartments, and villas, had declined at a 2% average for the entire year. In the same manner, rents have also fallen by an average of 4% throughout the entirety of 2017. This has resulted in many communities getting yield compressions. The report has also stated that about 54,000 residential units will be handed over this year. Seventy-eight percent of this number is made up of apartments. This also includes the delayed projects that have not yet been handed over from the previous years. It is also noted that the numerous consolidations and mergers in various sectors can affect the job market and can lead to vacancies. This could lead to a subdued outlook for the year 2018 especially in terms of rents.
While these details may make it sound like a challenging time for investors and owners, there are analysts who believe that the figures are mere signs of the continued development of the market. The market is maturing and continues to do so. A reflection of this is the fact that rents are now coming down at a much quicker pace compared to prices. The market is now becoming less volatile and this is the reasons why investors do not mind the lower yields that they are getting.
His also means that there is now less risk involved. This leads people to have better confidence in the sustainability and longevity of their investment and are, therefore, keen on outlooks that are more for the long term. The support coming from the Dubai government further bolstered this outlook too. There are trust and confidence in the real estate sector in Dubai and this has since reflected in the numbers that the market has been churning out.
Long-term vision has always been critical to success. Real estate is, after all, not about short-term thinking. Rather, it requires a long-term view. This is exactly the kind of culture that the Dubai property market is trying to promote. Price increases have been minimal when compared to the boom in 2007 and 2008. But this is a clear indication that the market is becoming more resilient.
There is an increase in affordability too as the real estate market in Dubai is experiencing a shift towards building houses that are more on the affordable side. Dubai is becoming more affordable and people can now afford to settle there. In addition, the decline in prices and rents are forcing developers and investors to focus on offering quality as it now clearly makes the difference. That, in itself, is a good sign of the times.
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