REFILE Dubai property price rises slow, 2015 outlook stable CBRE
Residential property rental values rose 7 percent in 2014 - less than 2013's increase of 24 percent
Dec 16, 2014
Source : Reuters


Dubai: Increases in Dubai property prices slowed in the second half of 2014 and valuations will be steady next year as a glut of new units are released, consultants CBRE said on Tuesday.

The real estate sector in Dubai, one of seven emirates in the United Arab Emirates, has been among the most volatile globally over the past decade as it turned from boom to bust to boom again. Prices rebounded from early 2012, soaring from June that year to the end of 2013.

"The major investors haven't really changed over the past five years - UAE nationals are some of the largest buyers, (plus) India, Pakistan, United Kingdom," Matthew Green, CBRE Middle East's head of research, told a news conference.

"For money coming in from this region, it's about moving cash out of countries which are higher risk into a country that's perceived as comparatively stable."

Residential property rental values rose 7 percent in 2014 - less than 2013's increase of 24 percent - while sales prices climbed 18 percent this year and 30 percent in 2013, CBRE estimates.

But the vast majority of 2014's gains occurred in the first half of the year - the final six months were near-flat for rentals and sale prices rose 3 and 2 percent respectively in the third and fourth quarters, said Green.

Transaction numbers in 2014 fell by 23 percent year-on-year and the total transaction value dropped 17 percent. More than 20,000 new residential units are due to enter the market next year.

"The apartment market is going to see significant supply, the same for villas, so we're not expecting a repeat of this year's performance in 2015 - we're looking at more marginal growth levels," said Green.

"Hyperinflation dramatically increased the cost of living, so stability in the market is a very good thing."

The bigger increase in sales versus rental prices has pressured rental yields.

"Not everyone is a buy-to-let investor but, as an investment destination, Dubai is no longer as attractive as it was," said Green. "I don't think we will have a correction like we had before. The market is relatively well insulated, with the kind of population coming in and the economy still sound."

Dubai's economy is expected to grow about 4.5 percent this year, with growth rising above that level in coming years, a senior official of the emirate said on Tuesday.

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