Special Features
Dubai’s residential market showing positive growth
Residential sale transactions saw a natural increase in January and February particularly in the villa market, aided by the confidence given by the resurfacing of the local mortgage market.Mortgage lenders, who continue to fight for market share, offering more attractive rates to credit worthy clients purchasing particular stock, have aided recent activity. The release of stock in Jumeirah Islands, for example, has caused values to increase in the development by 5.2% from Q3 2011. As well as offering mortgage rates for as low as 3.5%, banks are slashing arrangements fees and timescales to process approvals in an attempt to attract the limited market available.
Villa stock in Dubai (Figure One) has seen optimistic gains, the best performing are the Emirates Living developments of The Lakes, up 7.2% from Q3 2011, The Meadows, up 6.4% from Q3 2011 and The Springs, again up 6.4% from Q3 2011. Villa developments such as Jumierah Village or Green Community have proved less desirable locations and consequently have seen value drop 2.5 % down from Q3 2011.
Values of apartments in less desirable locations have continued to be eroded by oversupply and poor property management. Areas such as Discovery Gardens and International City have fallen by 7.8% and 5.6% respectively from Q3 2011 (Figure Two). The resilience of the higher end of the market has remained strong over the past five months and has experienced positive growth since Q3 2011 in locations such as Burj District, also known as Downtown Dubai (5.3%), The Greens (4.8%), The Views (5.2%) and certain higher end developments in Dubai Marina (1.35%).
Cluttons predicts that the remaining nine months of 2012 will mirror the market movements of the Q4 2011 and Q1 2012, solidifying a robust market which is based on demand fundamentals rather than investor sentiment bubbles.
