Increasing activity suggests Dubai realty market recovery by late 2010
News Article Date: Thursday 11th of June 2009
Dubai's real estate sector is expected to recover by late 2010 with emerging signs of increased activity, industry sources said yesterday.
"In Dubai, we expect a recovery to happen in 2010, although it will not be a sharp one. The real estate market will be a far more matured with competitive mortgage rates and good amount of affordable housing in place by 2010," said David Macadam, Director Sales and Leasing, Better Homes.
According to Elaine Jones, CEO of Asteco, a real estate and property management company, cash and confidence are the two elements needed to bring confidence back into the real estate market in the emirate.
"The recent announcement of the issuance of a six-month visa to property purchasers is a very short notice for buyers to stay in the market. It should be for a longer time. One cannot do much without a visa in this city. One cannot apply for Dubai Electricity and Water Authority facilities and there is no point in selling a property if you cannot have people live in it," she said.
Steven Henderson, Partner at law firm Clifford Chance, said: "The next few months will be very quiet with little real estate activity in Dubai. However, by the end of this year we could see a number of consolidations of developer companies through mergers and acquisitions. Recovery can be expected towards the third quarter of 2010."
Speaking on the sidelines of the Cityscape Connect Business Breakfast Dubai, Henderson said the law in Dubai would need to catch up with the progress of the real estate market. "In the past six to seven months, the Real Estate Regulatory Agency has been proactive and introduced a number of regulations into the market. The Strata Law will help to bring back confidence into the market," he added.
Sunil P Gomes, Chief Guru, Guru Real Estate, said the real estate sector has witnessed a dramatic growth in the past two years.
"Today master developers and developers are looking seriously at their feasibility studies. Dubai has been and still is an emerging market with developers making a return of about 16 to 17 per cent on their investments. While earlier they were making about 40 per cent return, now they have to be more realistic," he said.
According to Better Homes, Dubai is set to witness 29,000 new residential units to be added onto the property market.
Macadam said the company has recorded an increased number of new lease transactions for Dubai.
"In May we recorded about 400 lease transactions, in February the number was about 208, in March we recorded 308 transactions and in April these totalled 323 transactions.
"A third of those people are coming as new entrants from the United Kingdom, Western Europe and North America. They are mostly in the mid-managerial level and they are coming now because the salaries in the market today are at a certain level that is not too high or too low," said Macadam.
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