Breaking news: Dubai property market recovers
OK, not really. Well, not at all, in fact. But how else do you expect Kipp to get your attention about another Groundhog Day property article?
March 14, 2011 4:01 by Eva Fernandes
It’d be Groundhog Day all over again at Kipp if we began another Dubai property market story with a comment like ‘it is Groundhog Day.’ So we guess it is, if you see what we mean. Anyway, sorry to be so repetitive, but when it comes to Dubai property market, what do you honestly expect?
We’ll tell you what JLL expect: “The office, retail, residential and hotel sector of Dubai real estate market is likely to bottom out by first quarter of 2012… they are very close to bottom. However, Abu Dhabi will take another 12 to 24 months to reach bottom” said Craig Plumb, Head of Research, JLL Mena. His comments come alongside a report on the top trends for the UAE real estate in 2011 that was released this week by the firm.
With an excess of supply negatively affecting the property market not only do the experts at JLL expect a drop in rents and prices but they think that asset management will determine which properties succeed and which fail (talk about stating the obvious, thinks Kipp). Jesse Downs, JLL’s Director of Management Consulting said “Although supply will impact the market, asset management will drive the market. Quality will be rewarded while poorly managed buildings will suffer more.”
Ok, so if you are getting a major sense of déjà vu at this point, don’t disregard the feeling. These general sentiments that prices are falling and will bottom out by 2012 have been expressed by JLL before in 2010 and then again before that in 2009. They should pay attention to quite possibly the most frank statement we’ve read about the bottoming out of the Dubai property market – the one we heard from Kosta Giannopoulos, Manager Residential Sales and Leasing at Better Homes who told Emirates 24|7 last year “I have wrongly predicted the bottom of the market a number of times already over the past two years and if anyone could accurately forecast, they would stand to make a lot of money.”
Either way, the good news is, judging by the rents in some of Dubai’s more established areas, property in Dubai Marina, Palm Jumeirah and Burj Downtown are apparently showing signs of stability, What is more is that in 2011 Dubai will have just 25,000 new housing units delivered, which may sound like 25,000 too many, but compare it to the 36,000 new units that were delivered in 2010 and it doesn’t look so bad.
Okay, so it’s depressing news to see the property market slump continue… but wait! Don’t let Kipp get you down. The Global Professionals on the Move Report 2011 commission by recruitment group Hydrogen has ranked the UAE as one of the world’s top 10 countries to live in and work in – despite anything A A Gill will tell you. Part of the charm, of course, is the fact that the UAE meets standards of safety and stability professionals are looking for. Maybe that will help do something to prop up demand for new real estate.
See you next Groundhog Day (tomorrow, probably).