Despite the turbulence that has been noted in Dubai’s real estate market, the latest figures indicate that investors are beginning to return. On December 20, 2015, the share price for real estate firms dropped to an all time low. However, it has been outperforming the Dubai Financial Market (DFM) ever since, and this is helping to rebuild market confidence. Meanwhile, with stocks in Union Properties up by 46 per cent, and Emaar seeing similar 43 per cent gains, it seems Dubai’s housing market could soon return to normal and should remain a focus of investors.
The latest activity being seen in Dubai is an indication that investors may be returning to the market in a bid to snap up the last bargains before house prices really start to make ground again. Sameer Lakhani, Global Capital Partners’ managing director, explained: ‘There appears to be much greater optimism on the visibility of earnings as investors have realised that the pessimism has been overdone.’ He added that though the recent sales might have been confined to a small group of investors, the share gains for Emaar and Union Properties suggest sales activity has been broad-based.
There are still numerous property bargains to be had in Dubai, with the beginning of the year showing a surge of sales at Sports City, JLT and Jumeirah Village. However, these bargains have extended to other prime locations too, allowing overseas investors to get great deals on much sought after homes. For example, Mr Lakhani says that an increase in transactions was recorded at Emirates Living, Downtown and Palm Jumeirah as prices flattened out. The activity in these places suggests that many of the buyers are purchasing homes for end use or as a yield-based investment.
February’s upturn has also been noted by local estate agents. Allsopp & Allsopp’s, for example, noted its largest sale volume since it was founded in 2008 as buyer registrations soared by 62 per cent compared to a year earlier. In addition, just over half of the properties sold had only been on the market for two weeks or less. Chief executive, Lewis Allsopp, said: ‘Under current market conditions, we’re regularly seeing desirable properties at an achievable price receive multiple offers from buyers. This shows the real strength of the market and has the combined effect of keeping supply tight, demand high and, as we’re starting to see, prices increasing.’
There is not complete support for across-the-board growth, however, with some experts cautious about overall increases for the immediate future. There is likely to be a period of volatility ahead, caused partly by oil prices and the fact that many companies have had to change their accounting standards; a fact that could impact upon first quarter financials. Gibran Bham from property portal Lookup.ae said that though the market is more stable, many sellers are having to revise their listings lower than perceived market prices to make sales.
Despite this, with investment returning to Dubai, it still remains an attractive investment option for many.