Government spending on infrastructure ahead of Expo 2020 could lead to an uptick in investor returns by mid-2017, according to the global real estate firm.
- Property prices and rental rates in Dubai could begin to rise again by mid-2017
- Knight Frank has become the latest brokerage to declare a return to growth for the city’s real estate sector
- Increased government spending leading up to Expo 2020 is expected to prompt the start of this new period of growth
Has Dubai’s property market finally bottomed out?
That’s the view of Knight Frank, who have now joined a host of global real estate firms by declaring property prices and rents in the city are likely to return to growth midway through 2017.
After a two-year period of correction, the firm has found that sales prices since August last year have remained flat month-on-month, taking it as a sign that “the residential market is reaching its cyclical trough”.
Citing the increased level of government spending on infrastructure, as the emirate begins its preparations to host Expo 2020, Knight Frank declared in its 2016 Year End Review that this would lead to “a potential uptick in sales prices and rents from mid-2017 onwards”.
Before the end of last year, Savills shared a similar view that values and rental rates would begin to rise again over the next 12 months, having noted increased sale prices in some sub-sectors.
In January, the Dubai Land Department predicted that, should the strong sales levels recorded in the first month of 2017 continue, it expects to achieve deals totalling AED 292 billion by the year’s end, a rise of 20% on 2016.
Expo 2020 will give the city a $23 billion boost to the economy. It will also bring 25 million visitors to Dubai, highlighting the need for accommodation and the investment potential of entering the market now as it begins to demonstrate the start of a new period of growth.