Samir Salya on why the Dubai property market has seen such a positive start to 2017

Back in 2016, the outlook for the Dubai property market was mixed. Research from real estate consultancy Cluttons showed that average residential property prices in Dubai dipped by 2.6 per cent in the third quarter of 2016, bringing the annual rate of decline down to 7.4 per cent. Looking ahead to 2017, Cluttons suggested a more positive year ahead, but suggested that any recovery would be dependent on the market’s ability to strike a balance between supply and demand.

A need for balance

“Although our view of 2017 indicates positive signs to reverse the market’s fortunes, we are closely monitoring the level of residential supply coming to the market,” said Murray Strang, head of Cluttons Dubai last year. “With 34,000 units announced this year (2016), it’s clear that project announcements are continuing at an unrestrained pace, despite what could be perceived to be challenging trading conditions.”

So, has any kind of balance been achieved? Well, it’s possibly to early to say, but the signs coming out of Dubai’s real estate market so far for 2017 are certainly encouraging.

Promising figures                         

Cavendish Maxwell – an independent firm of chartered surveyors and property consultants who focus on property services – have released the latest edition of their Property Monitor Index (PMI).  The Index is part of Cavendish Maxwell’s data and intelligence service, which allows owners, tenants, investors, agencies, developers and banks to access real-time data and expert intelligence on the market.

“In January we began seeing a change in our monthly PMI, with some areas showing a growth month-on-month,” says Lynnette Abad, who is a partner at Property Monitor. “Since the index tracks live transactional data from agents, valuations and our in-house database, these changes are a reflection of the direction of the market.”

International appeal

One of the main drivers in the growth of the Dubai property market has been the interest shown by international investors. Transactions in the local property market have boomed by 25% in the first quarter of this year, with global investors clearly seeing Dubai as a safe bet for their money. At the recent International Property Show, the talk was of how to build on this interest from abroad.

“We have a strong appeal to international investors,” said Ahmad Thani Al Matrooshi, MD of Emaar Properties, at the recent International Property Show (IPS). “As developers, we can do the marketing but we need the continuous support of the Dubai Land Department and banks in completing transactions getting the money abroad.”

It’s a positive picture then for the Dubai property market, particularly in terms of foreign investment, and with plenty of opportunities for growth as we move into the second half of the year.

About Samir Salya

Samir Salya is the Chairman of Reign Holdings, and is involved in UK and UAE real estate and construction. Samir holds over 20 years’ experience in executive management, business expansion, performance improvement, sales and marketing.