2016| A great year for Dubai real estate investment
2015 has been a difficult year for the Dubai real estate market. But this year is expected to bring good news. After having considered the results and trends of the 2015, experts of the well-known consulting agency Greenhouse has released a forecast made for Dubai real estate market in 2016.
Future Dubai real estate market
According to the Greenhouse, 2016 will bring a slight decline in the residential area of the capital; in particular, investors will pay for a villa 0.5 percent cheaper and for apartment it will be only 0.8 percent.
The company’s real estate experts assume that due to the rapid supply of new property units, this year can be expected the lowering of the real estate property cost up to 5% against the global recession.
Emirates excepts huge developments growth in the coming years due to Expo 2020, Dubai expects about 7.400 new real estate units to be built this year, in 2017 this number will increase up to 10.300, and by 2018 Dubai’s property market will be expanded by another 13.600 villas and apartments. It is also said that 48 percent of the upcoming housing facilities put into operation by developers are accounted for residential villas in Dubai.
Why 2016 is good time to invest in Dubai real estate?
2016 will be a great time to invest in Dubai real estate. Following the global financial crisis, the Dubai real estate market came back in 2012 and peaked in the first quarter of 2014. Prices fell across 2015. However, property prices are set to stabilize and will be on the rise by 2016.
However the Dubai real estate market continues to mature and stabilize as a result of strategically implemented government rules and regulations, including the increased property registration fees and mortgage caps.
Gross returns for both small and large apartments in Dubai are yielding between 5.87 percent and 7.21 percent which is higher than Singapore, Hong Kong and London.
The office space sector in Dubai for example, will enjoy stability with substantial growth as tenants will have more diverse options – the Dubai real estate market is positioning itself to offer companies even better pricing options in terms of growth as well as investment.
Dubai is seen as a great place for doing business, in fact, DIFC and Downtown are considered a central business hub – foreign companies in particular, are happy to pay premiums to have their office set up in these prime locations.
2016 is going to be a good year also in terms of residential sales, particularly given the healthy price decline since late 2014.
To conclude, investors should wait no more. Act now and lock in a good bargain. With the property sector’s performance in 2016 hinging on liquidity, dollar exchange rates and oil prices, it is wiser to take the plunge right now.
Forecast for Dubai property market
We expect 2016 to be a stable year as it is a transition year to be followed by rapid growth if the economic and projected population growth remains the same.
As the month-on-month rate of property price decline is not as sharp as before, a majority of property owners are tolerant to hold their assets.
The current price levels are very attractive for investors who are looking for income-generating properties, or for first-time home buyers who are currently renting here.
We are positive about the long-term market in Dubai. Dubai real estate is one of the safest long-term investments as property values increase over time in addition to the fruitful income it generates.
For investors, there are great offers for income-generating properties in Dubai which could generate a net yield of more than 8 percent, more than the average global rate. Even if we consider a potential softening in rental values, it is still attractive.
For end-users with good incomes and long-term plans to stay in the emirate, it is a good time to buy as in some areas of Dubai, the rents can be much higher than the mortgage payments.
When foreign investors consider investing in Dubai real estate, they should definitely do the math and look at the numbers, but they also need to consider real estate to be an element within the context of what Dubai offers now and in the future.
Experienced Investors understand that the current slowdown is a phase of healthy correction as it is preventing a potential bubble.
They remain confident about the emirate’s plans in improving the overall living experience, with ongoing investment in mega infrastructure in addition to the opening of numerous theme parks in 2016 and the hosting of the Expo in year 2020.
At the current price levels, Dubai real estate offer excellent yields. And for the price per square foot, Dubai properties offer very attractive rates as compared to properties in prime areas in the UK, US or India.
For making investment in Dubai real estate, Contact us now!