Finally UAE Real Estate Market Is Showing Signs Of Slow RecoveryFriday, August 17, 2012
It is now around 4 years when the UAE realty sector was hit hard by the worst economic crises back in 2008. This economic crisis stopped the development activities in Dubai but now conditions have been improved to a significant extent and the UAE real estate is showing signs of recovery.
As per market experts, the sector is expected to bounce back slowly due to careful re-engineering of major development companies, structured cash injection and rescheduling of debts and projects. According to JLL (Jones Lang LaSalle), real estate consultant, villa market outperformed apartment market during H1. Overall residential market is indicating positive growth. There is high demand of well located, income producing and quality assets in the market since market is regaining investor’s confidence, once again.
The report also highlights that secondary locations are still experiencing rental and price declines but prime properties have started to show improved performance. All the property developers, who are publically listed, reported solid growth during second quarter of the year except RAK Properties. Emaar Properties and Aldar Properties reported a jump of 45% and 228% in net profits respectively in second quarter of the year. On the other hand, Sorouh Real Estate has recorded a jump of 29% in net profits during the same quarter compared to year-ago-quarter.
Another report by Emirates NBD Research also reveals that recovery of Dubai real estate continued in second quarter. As per the data from Cluttons, price of property falling under all the categories of housing increased from April to June. The data revealed apartment prices rose modestly in comparison to villa prices during second quarter.
According to Dubai Land Department, the value of land transactions increased to Dh63 billion indicating a growth of 21% during H1. DLD’s data also showed during H1 18,953 transactions including land development, lease contracts, grants, mortgages and sales were recorded.
Director General of DLD, Sultan Bin Mejrin, highlights these are important indicators of strong performance and growth of the market. Head of Research and Consultancy at CBRE, Matthew Green said that the UAE realty market is quite fragmented. For certain subsectors of the market, Dubai is experiencing better stability and growth and this trend is likely to continue in second half of the year as well.
Senior Vice president of Damac Properties, Niall McLoughlin, also said that with the investor’s confidence boosting again, increase in valuations is expected throughout rest of the year and into 2013.