Apartment rentals — and the most worrying for the vast majority of the city’s
tenant base — recorded a 26 per cent annual gain, while those for villas were
slightly muted at 12 per cent. The JLL forecasts, however, suggest that the pace
of rental increase might be slowing down.
If it has to slow down appreciably, more of the immediate property supply
needs to get into the hands of end-users. In the first quarter, around 1,800
units were handed over in the city and a further 24,000 are expected for the
full year, based on JLL estimates.
In all, 39,000 homes are to be delivered in the next two years, which would
be a 9 per cent increase over the existing total stock of 365,000 units in
Dubai. The question would then be whether this represents a sufficiently large
base to keep medium-term rental increases in some sort of check.
“Dubai’s momentum from 2013 has carried through into the first quarter of
2014,” said Craig Plumb, regional head of research at JLL.
For those tenants considering a shift to buying their own homes, the
continuing sales value gains is a constant niggle. For instance, “affordable”
residential communities went through some of the sharpest increases in asking
prices. Sports City saw an upturn of 41 per cent on an year-on-year basis,
according to JLL, while International City and Discovery Gardens were higher by
35 per cent and 33 per cent respectively.
Infographic
Values in the prime locations of Downtown and Marina were up “only” 24 and 21
per cent respectively during the same period. In fact, trends indicate that in
Marina, JBR and The Palm, prices are now near or already on par with their 2008
peaks.
“There are a lot more potential end-users in the market now interested in
properties across the entire price spectrum whereas earlier they were mostly
found in the Dh5 million plus bracket,” said Chandrakant Whabi, CEO of Acrohouse
Properties.
“There is a lot more activity taking place in the Dh2-4 million property
price category and that can be put down to those tenants seeking a home of their
own. By getting in now, they also seem to be hedging against further value
increases that would make it difficult for them to buy.
“For many, it could be that they had enough of being pushed around by
landlords - that can prove an overwhelming sentiment driving future demand
trajectory.”
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