Samir Salya on the Fundamentals of Dubai Property

Dubai’s property market continues to lead the region, with its solid foundations strong, despite market fluctuations. Looking at the macroeconomic picture, the sector is maintaining a positive and robust regulatory framework for its property market moving into 2018.

Demand in the area

According to research by the Khaleej Times, Dubai is still widely considered to be a secure investment opportunity. This is driven by government regulation, maintaining fair prices and exacting standards of property. The fundamental drivers making Dubai an attractive destination for investment remain.

Recently, changes in the market suggest falls in prices. Real estate developers in the area are better adapting to the current market and resulting trends, providing a diverse mix of developments at different price points. Market accessibility is opening to include a wider variety of investor preferences. 2017 has shown a more diversified property portfolio for the region, developing a more sustainable foundation for future growth in the sector’s future.

Solid fundamental factors

In a released statement from the Dubai Land Department, the Director General Sultan Butti Bin Mejren stated: “Growth in demand from investors is a result of an improvement in fundamental economic factors, rather than down to speculation.”

Proactive steps have been taken to prevent speculation in the market, with frameworks in place to prevent off-plan flipping. Due diligence and comprehensive contingency are being operated in the area to maintain a solid and straightforward marketplace. Using these stronger tools to rein in speculation, demand for Dubai property is based on an improving economy. Investment into infrastructure programs has led to a continued interest in the area.

Overall performance

Despite fluctuations throughout the year, Dubai’s property market remains positive. A recent report from the Emirates NBD (ENBD) shows rental yields remaining higher than those in most global capitals. Property in Dubai remains a solid investment again. While also outperforming global destinations, Dubai has also shown to provide a more stable rental return than its foreign competition. With the highs and lows of international currencies, equity and bonds, the stability of the region is continuing to attract investment.

ENBD data shows that apartment yields in June were around 7.3 per cent and averaged around 7.4 per cent for the first half of 2017. Villa yields are also holding steady at 4.8 per cent for the first half of the year.

The fundamental framework of the Dubai property market remains strong and is in place to bring continued sustainable investment to the region.

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.