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Gradual recovery in Dubai property in 2017

Dubai’s residential property market is heading for a soft landing, with a flattening of prices expected for the remainder of this year ahead of a likely increase next year, according to Knight Frank.

      The property consultancy’s latest Inside View report states that after "a period of restraint" caused by lower oil prices and weaker investor sentiment, it expects a gradual recovery in the market next year, with sentiment improving as a result of greater government infrastructure spending ahead of Expo 2020. The report expects the residential market to level out by the end of 2016 before seeing gradual recovery in 2017.

      Knight Frank also said that it projected a stronger performance in the high-end segment of the market, thanks to limited supply and strong demand from high net worth individuals. The agency highlighted Mohammed Bin Rashid City and Dubai Creek Harbour as particularly popular areas for investors, alongside more established locations such as the Palm Jumeirah and Downtown. However, the firm also warned that ongoing oil price volatility and the outcome of the US presidential election in November could also indirectly affect demand for property in the city.

      Despite a 7 per cent year-on-year price decline in the first half of this year, and a 12 per cent drop in transaction values to Dh113bn, Knight Frank expects demand to be led by "properties undertaken by reputed developers", especially for off-plan schemes. Meanwhile, an analysts’ report from Egyptian investment bank EFG Hermes is slightly less upbeat and is predicting a further decline in property prices of 5 per cent this year and into early in next year, before stabilising later in 2017. The number of transactions is also expected to slow down further. That will translate not only into price declines for completed properties but also fewer new launches than have been experienced over the past three years.

      EFG Hermes expects 33,500 new units to be completed in Dubai between now and 2019, although the forecasted pipeline is 74,200 until the end of 2018, according to Reidin figures. Buying activity continues to be dampened by the strong dollar to which the dirham is pegged, the weak oil price and challenging economic conditions in Saudi Arabia. Saudis are the second-biggest group of foreigners after Indians investing in Dubai property, according to Knight Frank. They are responsible for 7 per cent of all UAE property purchases, according to EFG Hermes. EFG Hermes said that Emaar Properties was likely to continue outperforming the market, due partly to the fact that most of its buyers are UAE residents and that the company’s properties achieve higher prices on the secondary market. It also expects Aldar to do well, but said that Damac faces a tougher environment as it has fewer sources of recurring revenue and is more reliant on property sales. Damac’s contracted sales were 29 per cent lower in the first half of this year, and EFG Hermes is forecasting that between this year and 2018 the developer’s sales will be 28 per cent lower than last year. It said that Damac has historically sold a high concentration of properties to buyers from the GCC.

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Spectacular views of the world’stallest tower. Just seconds from the Dubai Water Canal, anticipated to become the next Dubai Marina.

A striking 29-floor structure created by a highly regarded local Emirati family developer. Inside, a luxurious range of studio, onebedroom, two-bedroom and threebedroom apartments, finished to some of the finest standards in the city.

From just AED 895,000 with only a 15% deposit, this opportunity will also offer a solution to the huge undersupply of studio apartments at the very heart of Dubai.

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Beaches, marinas, world class golf courses, shopping centers, hotels, and all the amenities of fast-growing Ras al Khaimah are easily accessible. Downtown Dubai is an hour’s drive on a superb highway.

Mountain View’s residential facilities are ideally located for any RAK-based businessman or professional seeking a luxurious, secure, centrally located residence. Build quality is of the highest international standard, with a US-based international project management firm supervising construction.

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