Despite the fact that the year 2011 was predicted to bring some cheerful news about Dubai real estate, it remained quite challenging. The market highly favored buyers as well as tenants by offering them quality properties at much reduced rates. The final quarter of 2011 brought some pieces of good news for the realtors since Dubai rental and prices in many areas started to get back on their original track.
The year 2012 started with great optimum regarding Dubai real estate. The report of the Q1 performance helped to turn this prediction of better times in 2012 to reality. The prices and rents of the houses in Dubai have market significant increases in Q1. Especially the lease rates of villas in Dubai have shown increase of 3% quarter-on-quarter for the first time in three years.
Despite the better performance highlights of Q1, the year 2012 is expected to be the year when prices would actually hit the bottom. So the average prices are expected to fall further though out all the consecutive quarters of the year. Moreover, the prices of the properties would also be influenced by the economical troubles of the Eurozone. Some other trends that will likely be seen during the following year are described below.
With so many landlords and sellers fighting for buyers and tenants, the market is expected to become highly competitive. Moreover, this high competition along with the supply of new units having high quality of life would further increase the choices of the tenants and occupiers.
The quality would remain the main concern of the astute investors so there would be greater emphasis on the supply of quality units. The prime areas having wide array of quality properties would outperform other secondary areas in Dubai. This would further strengthen the concept of two tired market and ‘Selective Stabilization’.
Owing to the greater tourism and high interest of investors in Dubai real estate, more sale of real estate is expected in the following year. This higher volume of transactions would be made by private investors and high net worth individuals mainly in residential sector. The office market in Dubai is expected to remain sluggish.
Dubai real estate market would experience more realism and would highly favor tenants and buyers alike. Landlords would provide more incentives like rent free periods, no security fees and advance payments etc. Sellers would offer quality properties at quite low prices, since prices would continue their declining trend. Banks would continue to provide easy mortgages.
The general trend of the market shows that the worst has finally over but there is still some time before we can expect a kick start to recovery. The market would actually hit the bottom during the year 2012 and the next year can be expected to be the year when recovery would gain momentum. Moreover, it would take some time before the prices would roar back to their original position and this time cannot be expected sooner than year 2015-2016.