Homeowners and Renters property price expect to rise in the next year

Investors seizing the opportunity in the current real estate market are behind the improved sentiment in the UAE real estate market, said a chief economist.

The real estate market has been at a low as coronavirus wiped out markets globally, but while prices remain low now, there is an expected boom ahead.

Christopher Payne, chief economist at investment and research company Peninsula, explained that it is “not unreasonable” to think the market cycle has reached near bottom, given prices have fallen by around 10 percent in 2020.

“Investors, whether in equity, real estate or any other markets, always look for inflection points in market cycles. No one wants to miss out on the bottom,” said Payne.

Peninsula’s Home Sentiment Survey, which measured consumer sentiment towards the residential property market at the end of Q4 2020, indicated that 53 percent of respondents said they are expecting prices and rents to stabilise or go up in the next year, a sharp turnaround from October when only 31 percent were bullish on price increases.

Only 27 percent of respondents reported expecting prices to continue to decline, with 30 percent expecting price stability. The largest group, 43 percent, expect prices to rise in the coming 12 months.

“Buyers are looking beyond the pandemic. They’re looking at a strong economic rebound and they’re looking at higher oil prices – especially in the light of the Biden’s fiscal stimulus plans – that can enable more government support for the economy,” explained Payne.

All of these factors support a better market in the coming year and hence could explain the survey results, he said.

However, UAE tenants are less confident that they are likely to win further rent concessions from their landlords when their current lease expires.

While 65 percent of renters expect rents to decline, that’s significantly down from 80 percent in October, the survey said.

In line with the survey results, there has been a pick-up in volume of residential unit transactions since early 2021 but Payne still recommends caution among developers.

“My hunch is that most of the developers, especially the larger ones, will be waiting for more clarity on what lies beyond any post-Pandemic bounce, economy-wise, before launching a new series of projects. Caution will, of course, help support price recovery in the market,” said Payne.

 

Source:Arabian Business

Motivational Sayings Ten Great Ones

Dubai real estate sector looks set to stage a smart recovery this year due to speedy economic recovery, spending on infrastructure development, growth in trade and tourism sectors from the Abraham Accords, experts say.

Referring to latest data, real estate developers, executives and analysts said investors and end-users are expected to take advantage of property price correction by purchasing villas and apartments in the emirate. They said worst is over for Dubai property market as prices have touched the bottom and will start rebounding this year.

Industry experts said that it is the right time to invest in the property market while tenants should also be ready to pay more towards the end of the year.

Property consultancy Valu Strat, which recently released its annual report, said apartment prices recorded year-on-year decrease of 14.3 per cent last year while villa rates dropped by 13 per cent.

The report noted 18 per cent year-on-year decline in rents for apartments in 2020 but noticed a stability in villa segment as it fell by only one per cent.

Dubai Marina, Business Bay, Town Square, Jumeirah Village and International City remained most sought-after locations for buyers and end-users looking for ready properties.

Investors, who believe in off-plan properties, found Jumeirah Village, Downtown Dubai, Dubai Creek Harbour, Business Bay and Sobha Hartland most popular areas for investment.

Subject to health crisis being resolved, the report said Dubai economy will grow by four per cent this year that will benefit the real estate sector.

“Economic recovery, Expo 2020 and 50-year anniversary of UAE will improve market sentiment this year. As developers put new projects on hold, rentscand capital values in established villa locations could stabilise and perhaps witness a gradual appreciation while apartments may follow the similar suite towards the end of 2021,” according to the report.

Haider Tuaima, head of real estate reserach at property consultancy ValuStrat, said the emirate’s real estate sector will remain a sought-after destination for investors this year.

“The worst is over for Dubai property market and prices will start rebounding this year. Citywide average prices for villas and apartments are expected to see an increase of up to three per cent and one per cent, respectively. Some areas may perform better or worse than others,” Tuaima told Khaleej Times on Saturday.

Citing speedy recovery from the pandemic, quick economic recovery, tight control over new supply, hosting of Expo 2020 and celebrating UAE’s 50th celebrations are some of the key reasons for real estate turnaround, he said property prices have a long way to reach previous peaks.

“Residential areas with good infrastructure, transport links, schools shoos and shops will remain in demand by property buyers and tenants this year,” he said.

To a question, he said property sector may face some short-term challenges but it will not derail the recovery process.

“Pending supply from previous years is expected to come online at some point in time, but improvement in general economy, business growth, and job creation will generate further demand of residential units in the emirate,” Tuaima said.

Imran Farooq, chief executive of Samana Developers, said has a strong belief in Dubai property market as he planned three new residential projects in the emirate.

“We have increased the headcount by 55 per cent for 2021 to double up the sales revenue after registering record sales last year,” Farooq told Khaleej Times on Saturday.

He said Dubai is the investor hot-spot with a positive outlook while its real estate sector has performed well and is capable of fighting with a major pandemic.

“The city has launched a massive Covid-19 vaccine drive to protect the 9.89 million population. The UAE converting the empty hotel apartments into quarantine centres was an innovative idea and helped reduce the spread of coronavirus.

“Dubai has emerged as one of the fastest cities in the world to get over with the pandemic as the UAE’s 12 per cent population has already been given the first dose of the vaccine. Around 80,000 people get shots in a day. This is resulting in economic recovery and growth in tourism,” he said.

About the performance of his company, he said Samana Developers completely sold out its Dhs185 million Greens and Hills projects in 2020.

“We have managed to fast-track the construction by introducing drastic changes in the way construction is done for its 327 units in total. Samana’s new construction management strategy helped complete the construction ahead of time,” he said.

Shazil Imtiaz Rafi, managing director at Rafi Group, said Dubai has a unique real estate development landscape and it will remain an attractive market for investors across the globe.

“The emirate is home to the worlds most iconic real estate development projects. These landmark projects paired with a team of experts in policy making constantly enable improvements in the secondary markets,” he said.

“When the much anticipated Dubai Expo 2020 was announced in 2013, an immediate effect was that Dubai’s real estate developers over supplied the market with new units. Unfortunately, when the Expo 2020 was delayed due to Covid-19 it had an unfortunate effect on both tourism and retail.

“Although recovering from this will take some time, I feel Dubai government has taken effective steps in time to curtail new projects in an attempt to control over supply,” he said. Additonally, he said the government is trying to increase demand by incentivising investors through improving business sentiments by relaxing visa laws to fully revive economic activity in the emirate.

Dubai South launches villas in residential district

Dubai: Dubai South has launched villas in its flagship development ‘The Pulse’ after the selling out of townhouses at the project. About 50 per cent of the villas have already been booked by investors.

‘The Pulse Villas’ is home to 268 units comprising 242 two- and three-bedroom townhouses as well as 26 four-bedroom, semi-detached villas, which come equipped with closed kitchens, private gardens, maid’s rooms, storage, study rooms and laundry rooms.

Prices start from Dh850,000 for two-bedroom units, Dh1 million for three-bedroom units, and Dh1.25 million for the four-bedroom villas.

Payment plan

Dubai South Properties is also offering a payment plan that includes a 5 per cent booking fee and a 2 per cent DLD (Dubai Land Department) waiver. Additionally, payment for units will occur in two phases: 50 per cent during construction and 50 per cent over two years post-completion.

“As we get closer to Expo 2020, the population in the Residential District is also expected to increase in the years to come,” said Mohammed Al Awadhi, from Dubai South Properties.

Source :Gulf News