Dubai is seeing a strong interest from buyers of good quality, well positioned and well designed properties, according to a report.
Cluttons, a real estate specialist, noted in its Q3 market report for Dubai’s residential market that the city is showing signs of optimistic improvement.
Cluttons noted that the residential real estate sector seemed to be developing with a return to the optimism of June and July of this year. Market demand is now originating from variables that one would expect in established marketplaces, where property specifications are seen as prime consideration for prospective buyers, it said.
The company has noticed that location, amenities and a sense of community are now far more prevalent in buyer’s minds compared to those purchasing property three or four years ago. Although the less desirable locations are still experiencing the effects of the supply-demand gap with 10,000 – 15,000 new units expected to be delivered this year, Cluttons notes that residential properties found in more desirable areas have seen sustained values and in some cases growth.
This ‘Flight to Quality’ movement has seen a marked interest in residential locations such as the Palm Jumeirah, Meadows, Springs, and Arabian Ranches, which have seen value growth of around 1 percent since Q2 2011.
This trend to desirable location villas has been mirrored in the leasing market, with Cluttons seeing a gain of villa rents across all areas of Dubai of 0.7 percent. In contrast, apartment rents in most locations have dropped 2.5 percent compared to Q2 2011 figures.
Moving into the final quarter of 2011, the Dubai real-estate sector can expect more astute investors and tenants, not only looking for good location sites, but quality and fine detail. The development market is also showing signs of revival, as those holding well-located and structured land banks and developments are now considering their options to develop out, and or extend existing projects, it said
Aka said there had been some house cleaning among funds that were too aggressive or charged inflated fees that damaged the industry’s reputation, but that continued consolidation would ultimately hurt the industry.
‘I would say please don’t liquidate these funds. We are a small market and cannot afford shrinkage in end-client choice.’