Investors from across the GCC are turning to property markets in the UAE and particularly Dubai property following widespread market improvements. Dubai is regarded as a safe haven within the MENA region and property in Dubai is attracting significant levels of investment from regional and domestic buyers who expect high returns from the emirate.
In a recent report created by property experts in the UAE, Dubai was highlighted for having a strong growth potential now prices are widely regarded to be at the bottom according to analysts. This view of the market has been confirmed by the number of local buyers using the current price levels to ‘trade-up’ or convert from renting to buying Dubai property.
As a result banks are increasingly willing to lend once again. The report explained, ‘The main reason for this is not that the buyers are getting into debt, but more and more end users are applying to buy rather than rent,’ adding ‘The Dubai residential real estate market is now more secure and transparent, enticing investment back to the city. Speculation has disappeared and distressed sellers are very few,’
However the report did point out that the recovery is limited to certain areas within Dubai with the majority of districts still suffering from oversupply. It has been the most high profile areas that have performed the best in recent months, districts that offer the best quality and most exclusive lifestyles. Dubai Marina, Downtown and Emirates Hills are all prime examples.
The widespread market improvement has been reflected in Dubai’s stock market which reached its highest level in over a year. The benchmark Dubai Financial Market General Index has rallied over 30% in the year to date and 3% in the last week.
Saleem Khokhar, the head of equities at National Bank of Abu Dhabi said, “The improving global economic outlook brings positive confidence in the market. You wouldn’t see as an aggressive a rally [without] global markets coupled with low valuations and high yields,”
Following this strong market performance, estimates on the emirates growth have been revised upwards from 3% growth to 4.5% in 2012 according to Sheikh Ahmad Bin Saeed Al Maktoum, chairman of the Dubai Supreme Fiscal Committee.
Source: The National, Trade Arabia