Monthly Archives: December 2012

2012 – The Year of the Optimist; 2013 – The Year of the Savvy Investor

As we close out another year, and begin to relax ahead of the New year celebrations, we take a moment to reflect back on twelve months which has redefined the property market in Dubai and consider what might be before us in 2013.

Villa prices have seen the most significant growth, during a year where each quarter has outperformed the last, with some areas seeing growth around 20 percent. Apartments are also back to 2010 prices (they won’t hit 2008 peaks until Q3/Q4 next year) with a year-on-year increase around seven percent across the board … much more than this at the luxury end of the market.

Key locations are still leading the market. Top-end properties in the Burj Area and Dubai Marina remain the most sought after, with serviced apartments the new off-plan opportunity.

Mega projects were again announced … a few teasers at Cityscape Global, before the real big announcements in the past month: ‘Mohammed bin Rashid City’, a multi-billion dollar project with the largest mall in the world (didn’t we already have one?) and a park 30 percent bigger than Hyde Park in London. Then, three days later, a AED 10 billion leisure and entertainment destination, which will begin construction next year.

So Dubai is back competing, announcing, building, and most importantly selling again. While there is some justified skepticism in the air as Dubai reverts back to the big bold announcements, there is now liquidity back in the market. Dubai is seen as the safe haven with Middle East investors moving their cash to the Emirate as the Arab Spring continues throughout the region. Buyers in Europe and America are coming to Dubai (especially the large institutions) as the EuroZone crisis and the ‘Fiscal cliff’ in the States still causes alarm.

So into 2013, and as DAMAC Properties’ MD, Ziad Al Chaar said recently: “2012 has delivered on our predictions at the start of the year – prices in the Dubai market steadily grew with each quarter outperforming the last. In 2013 buyers will definitely be able to benefit from this capital growth, but will need to be very savvy about where they invest and in which projects in each area.”

Stricter regulations continue to be integrated into the Dubai Property Market, new investment opportunities will open up (serviced hotel apartments will be the number one investment vehicle next year) and new locations such as IMPZ, Jumeirah Village and the Emirates/Al Khail Road area will jump in valuation as infrastructure completes.

“I believe that there has been no better time to invest in the Dubai property market in the past four years,” added Al Chaar. “New regulations, the filtering of the market following the correction and the increases in business and tourism coming to Dubai will it remains one of the most lucrative real estate markets in the world in 2013.”

Which direction do you think the Dubai Property Market will head in 2013? What impact will it have on rental prices and yields for owners? Are you looking to get into the market? We would love to hear from you in the comments section below, or joining us on Twitter, @dxbpropinvest.

The 53-storey towers to be built in the Burj Area

The Distinction – The latest project to hit the luxury Dubai Property Market

DAMAC Properties is the latest luxury developer to step forward with a new project announcement, and The Distinction is set to wow the growing number of people returning to the Dubai Property Market.

A stunning 195 metre, 53-storey, iconic tower overlooking the Burj Area, with views taking in the vista of the Dubai Fountain, Burj Khalifa and Dubai Mall, The Distinction is set for completion early in 2015.

The Distinction will come with 295 luxury serviced hotel apartments, including studios, one, two and three bedrooms. There are also two four bedroom penthouses.

DAMAC Properties has timed the announcement well – with the market on its strongest upward curve in four years. There is a great deal of interest and excitement about the Dubai market at the moment and especially the Burj Area which DAMAC recently described as one of the most desirable locations in the world.

Average prices in Dubai have increased by 14 percent in the first nine months of the year, according to the Reidin Residential Sales Indices, with the rental market also seeing strong growth with yields up as much as 24 percent in prime locations across Dubai according to a recent report by CB Richard Ellis.

DAMAC Properties is certainly focusing on the top-end serviced apartments sector of the market and has recently announced it will have more than 4,000 units of this type under development by the end of next year.

Niall McLoughlin, Senior Vice President, DAMAC Properties, said: “Luxury projects in prime locations are driving the UAE property resurgence and ‘The Distinction’ will provide the quality of finish and service expected at this end of the market. The serviced hotel apartments at ‘The Distinction’ will offer the highest levels of customer service, luxury and opulence placing it among the premium products DAMAC Properties has on the market today.”

You can experience the views you can expect from The Distinction by checking out this cool time lapse from one of the towers next door.

What do you think of The Distinction? Do you think luxury serviced apartments will take off? We would love to hear from you in the comments section below, or joining us on Twitter, @dxbpropinvest.

Dubai Metro is driving property prices in Dubai. Here is passes DAMAC Properties' 'The Waves' in Dubai Marina

Transport Networks Driving Dubai Property Market

Improvements to the transport network in and around Dubai have had a dramatic impact on pricing, according to the Roads and Transport Authorities.

Property close to the Dubai Metro, which opened on 09/09/09, is already seeing a strong increase with prices appreciating anywhere from 7 – 34% a report concluded. Up to 300,000 people a day are now using the metro, making it one of the most used forms of public transport in the country.

It may seem obvious that the metro will have helped to increase prices, but many ‘experts’ were sceptical of the impact of the metro before, and even shortly after, it opened. It was thought that they would be seen as an eyesore, increase traffic congestion around the stations and no one would use it due to the obsession with big cars and cheap taxis.

However, people have been using the metro in their millions to get across Dubai and real estate has seen a good boost as well.

It is a further sign that infrastructure development has a dramatic impact on pricing and improvements to standard of living; something the top developers have been pushing for quite a while.

There is a currently a two-tier structure to Dubai’s real estate market, with the main areas along the coast, and adjacent to Sheikh Zayed Road and the metro demanding the highest prices, with the developments slightly further into the mainland offering great value as infrastructure is still in development.

The metro service in Dubai Marina looks set to come on-line in the New Year, with talk of the rail network linking Dubai and Abu Dhabi also set to get under-way at full steam shortly, the UAE’s transit network is set to be one of the most advanced in the Middle East.

Where as in 2008/9 and before, there was no need to even think about public transport in Dubai when considering a place to call home, it is now becoming a more important factor for all of the Dubai property market – not only for increasing value in the property but also for easier access around the Emirate.

How often do you use the Dubai metro? Have you seen an increase in your property since its completion? Have the prices risen because of the new network? We would love to hear from you in the comments section below, or joining us on Twitter, @dxbpropinvest.

Dubai Property Market – 2013 Outlook

As we turn the corner into the home straight of 2012, www.dubaipropertyinvest.com dusted off its crystal ball and took a look at what to expect in the Dubai property market in 2013.

Recent announcements by the Dubai Government are an additional fillip to a market which has seen sustained and improved growth throughout 2012.

That key word we keep talking about here: Confidence is again riding high (hopefully not too high) and the market is more stable than it has been in the past three to four years.

Executives are starting to think about the direction of the market in Dubai and lay out their plans for the coming year, and supporting that with investment.

Ziad Al Chaar, DAMAC Properties Managing Director, told us that growth is sustainable in the near future, if you know where to look: “2012 has delivered on our predictions at the start of the year – prices in the Dubai market steadily grew with each quarter outperforming the last. In 2013 buyers will definitely be able to benefit from this capital growth, but will need to be very savvy about where they invest and in which projects in each area.”

And this is a key element. While we often look at numbers and data across the board in Dubai, the market remains fragmented with some areas driving premium prices and others yet to fire into action. This creates opportunity for investment, but new clients to the market should be careful and do their research.

Look for the areas where the Government have committed to infrastructure investment over 2013 to provide a guide to where the latest projects will not only be completed in good time, but where services will also be close to hand.

“Encouragingly, there are indications that some of the lessons of the last real estate crisis have been learned,” said Jones Lang LaSalle in its latest look at the Dubai market.

“This is still Dubai and it is as ambitious as ever but we are also seeing a more mature and considered approach which is only going to benefit the long term health and credibility of the real estate sector amongst domestic and international investors and stakeholders,” added Alan Robertson, chief executive officer, of Jones Lang LaSalle in the Middle East and North Africa.

This more stable take on development should hold Dubai in good stead through 2013 with job opportunities created as the cranes swing back into action. There will also be a host of projects actually coming on line next year from developers who focused on delivery rather than new announcements over the past couple of years.

Next year could turn out to be one of the most consistent of recent years. We expect to see less erratic movement in prices across the twelve months with a steady climb of 4-5% per quarter in the most sought after locations.

Do you agree with our assessment of what is to come in 2013? We would love to hear from you in the comments section below, or joining us on Twitter, @dxbpropinvest.