Dubai property market on road to recovery
After several years of falling prices, Dubai’s property market is showing signs of improvement in early 2012. At the start of 2012, property prices showed their first quarterly rise since 2008 with investors increasingly confident about homes in the emirate.
However, the property market in Dubai may remain uncertain, as we explain here.
Demand for villas remains high, pushing up property prices in Dubai
The National reports that prices of Property In Dubai have increased due to a combination of improved trade and tourism in the emirate and a ‘return of investors’ confidence’.
According to data compiled by the Economics Group at the National Bank of Abu Dhabi, average property prices in Dubai increased by 3.7 per cent in the first quarter of this year from the previous quarter.
Prices of villas in the city also continue to rise on the back of stronger demand at the same time as villa rental rates increased by around 5 per cent. The newspaper reports that the demand for villas in established areas such as Palm Jumeirah and Arabian Ranches remains high thanks to existing tenants upgrading their accommodation to take advantage of the current favourable market rates.
This has helped push up the price of Property In Dubai. In addition, mortgage providers in the United Arab Emirates are currently offering competitive mortgage deals which have benefited buyers and boosted property sales. Mortgage lending in the emirate rose by over a third between 2010 and 2011.
The National reports that: “Although Dubai's property market has improved in recent quarters, it might be too early to judge whether the underlying recovery trend is sustainable, given the continued supply of new properties, the European debt crisis and the global economic slowdown.
“However, the downward spiral of property prices in Dubai has clearly been arrested.”