UAE Realty Market: Rising Sentiment is driving it Sky-high

UAE Realty Market: Rising Sentiment is driving it Sky-high
April 20, 2015 Howayda Alame

Looking at hospitality sector, occupancy rate in Dubai remained horizontal at 85 percent whereas in Abu Dhabi, it rose by seven points reaching 77 percent. As 2015 has just started, these statistics are extracted from second quarter of 2014. Talking about Dubai, strong economy and budding market response is driving real estate all the way to upwards with World Expo 2020 remains a key catalyst.

During the slow yet stable uptrend in Q2 of real estate 2014, home sell and rental prices rose by six percent in Dubai while five percent in Abu Dhabi respectively. Though rent for commercial sector in Dubai and Abu Dhabi grew, rate was slower as compared to 2012-13. Excitement continues upon looking at the data taken from Dubai Land Department outlining total sum of GCC exceeding 19 billion dirhams for first half of 2014.

Ranking by Transaction

Emirati investment enjoyed the lion’s share of this figure, making transactions of total 12.5 billion dirhams in property sector. This count is double to the 6.5 billion even when combining all other GCC nationals. Data also unveiled Saudi citizens ranked at second place in the list making approximately 1,121 transactions worth 3.371 billion dirhams.

Following closely are Qataris in third place with 113 transactions that sums up to 1.463 billion. Then come Kuwaitis and Omanis at number four and five with deals worth 839 and 482 million correspondingly. Citizens of Bahrain occupied sixth place with total investment of 247 million in first half of 2014.

What GCC results are showing?

UAE real estate during the first half of 2014 remained stable within GCC. Residential and commercial markets were strong with Doha City Centre and Airport Road producing top-notch results. The residential market experienced three percent rental growth per quarter with enhanced sales performance and increase in mortgages. Tourist sectors presented a mixed result with Jeddah beating Riyadh but office aside, residential market got better and more improvement is expected throughout 2015 as well.

Realty market of Saudi Arabia also performed well throughout the first and second quarter with Jeddah and Riyadh being a driving mechanism. However with fresh developments taking place, market faced a sharp rise in supply impacting commercial rent. Pressure falls more on Grade B offices rather than Grade A.

UAE Statistics

Overall property traded value shot by 46.4 percent with approximately KD 1,325 million. Investments largely came from higher government spending, favourable policies and improved market confidence. This was moderately offset by low volumes alongside short supply and higher property costs.

Property sector of Bahrain remained neutral and is likely to continue the same pace in near future. Business segment was saturated with supreme quality offices, both small and mid-sized more desirable. Residential market performed better with apartment projects being demanding. Though villas also surged, increase rents diverted investors toward apartment for rent in Dubai Marina.

A Glimpse at Q3 of Abu Dhabi in 2014

Abu Dhabi’s realty market also remained stable throughout the year with sparse or no fluctuation at all in both sell and lease of residences. Average apartment sales of Abu Dhabi showed a little flux with a 28 percent annual sales by end of 2013 compare by Dubai apartment sale. Villa prices remained flat throughout the quarter but still ascended to 14 percent across the market. The launch of Mamsha Al-Saadiyat on Saadiyat Island strengthened the market further. It’s a 400 plus luxury residential unit with average starting cost of 2,000 dirhams per square foot. This will inject adrenaline in upcoming development projects of 2015 so there’s more than meets the eye.

Summary

The above article provides a brief overview of real estate statistics during 2014. With so much happening altogether, let’s see how results would come out this year!

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