Uae upbeat for 2015, despite volatility
Photo: Sboyd
The UAE property market has enjoyed a strong performance in recent years, thanks to the booming rebound of Dubai. Optimism continues in 2015, despite some volatility forecast in the market.
In a recent survey conducted by property portal Lamudi, agents across the emerging markets predicted high growth for 2015, with almost a quarter (23 per cent) of agents in Saudi Arabia expecting a growth of eight to 10 per cent.
"Similar results were seen elsewhere in Asia and the Middle East," reports Arabian Business.
A recent report from Knight Frank, though, predicts prime property prices in the emirate to fall by up to 10 per cent this year. Figures from the Dubai Land Department also showed that the total value of real estate deals in 2014 dropped 8 per cent from 2013 to $59.3 billion.
Falling oil prices are also being eyed with caution by experts, with the property market experiencing a sharp slump during the last slump in 2008. Broad demand, though, is expected to soften any blow.
"I wouldn't say lower oil will have much effect on Dubai's property market in the long run because demand is there - if not from the Gulf, then from India, China and Europe," Harshjit Oza, assistant director of research at Naeem brokerage in Cairo, told Arabian Business.
Matthew Green, the head of research and consultancy for the UAE at CBRE Middle East region, forecasts a year of stabilisation: "The residential market has shown signs of stabilisation over the past six months, across both sales and leasing markets. We expect this to be a similar outlook for this year, with the scheduled pipeline of 20,000 new units during the year likely to help constrain rental inflation and add more balance to the sector."
There will be some fragmentation, adds Green, with villas potentially deflating in value in certain areas due to supply of new units.
CBRE also predicts a gradual increase in prices in Abu Dhabi, says William Neill, the head of Cluttons in Abu Dhabi, "but nothing on the scale of the increases that happened last year".
"There is still some great investor appetite in Abu Dhabi, so we believe new residential schemes will still fly," Neill told The National. "There will be more off-plan housing launches this year, from the usual suspects – Aldar and TDIC – as well as some private developers."
Neill adds that there is a danger that, with no rental caps in place, rents could continue to climb.
"If there is a lack of supply then the market could face some of the same issues it faced back in 2007 when rents were so expensive that many people were forced to commute here each day from Dubai."