With property prices continuing to boom, there’s no sign that there’s a slow-down in sight.
Construction still continues in great numbers in this gleaming new city, and the appetite for property seemingly continues unabated.
But what’s driving the trends in the property market for 2014? We take a closer look at just what’s been going on.
Panoramic views of Dubai
Sales in 2014
Once again there has been much talk of an overheating market and a property bubble, as sales in the industry continue to rise.
According to researchers, the prices of apartments climbed by 3.2% in the second quarter of 2014, taking the gains over the year to a substantial 21%.
Although there has been some slowdown since the beginning of the year, property sales remain robust and are steadily continuing to increase.
To try and cool the demand, the government has introduced measures such as a cap on mortgages, and doubling the transaction fee.
Despite these measures there still remains a more than healthy interest in the property market, with only a slight fall in figures in the more prestigious luxury villas. The volume and prices of apartments available in area such as Deira validate the growth.
Why it’s different this time
Despite concerns about the property market rising too quickly, experts are pointing to a number of different factors to explain why there’s no need to worry.
Before the global credit crunch slammed into Dubai, property prices were rising sharply and suddenly. The arrival of the worldwide recession led to the inevitable crash in investments, with the price of property tumbling.
There are plenty of properties for sale in Dubai
Since around 2011, the market has gradually climbed back up, establishing year on year growth. And it is this sustained and steadier growth which experts are suggesting is the basis for a far healthier, and sustainable, property investment value.
There’s also a range of factors which are helping to create the increase including a growing economy, the change in demographics and improved regulations. All of these are helping it support the property market, and will continue to do so in the future.
What does the future hold?
There are no signs that the property market is going to substantially slow down anytime soon, and whilst the incredible returns on investment which were available prior to 2008 may no longer be available, Dubai property still remains a shrewd asset to purchase.
Although on one hand the government has introduced measures to stop the property market overheating, it remains keen to continue to develop the country and has plans to construct yet another of the world’s hugest shopping malls and complexes. Capable of providing facilities to 180 million people every year, this new project has fuelled interest in the Dubai property market even further.
As a result, around 400,000 new properties, both residential and commercial, are expected to go live during 2016 alone.
Flames are also being fanned by the prospect of Expo 2020, a world event due to be held in Dubai in 2020. The IMF has said that this is one of the key events which is helping to stimulate appetite for property in Dubai, and has estimated expansion to continue at the rate of 5.5% until the end of the century.
Property investment in Dubai remains big business, particularly in smaller sized apartments with the price of land per square foot roughly double what its worth in a villa. As the need for hospitality in the city is expected to increase, these smaller dwellings are expected to become even more valuable than they are today.
Dubai has always attracted investment, with its commitment to creating a contemporary and gleaming province, with innovative and attractive architecture. Despite ongoing hikes in the market, there’s still a comfortable profit to be made and with genuine demand driving the increase, there’s no reason to predict a collapse as was seen in the past. Having learned from its previous lessons, Dubai’s property market in 2014 is mature and restrained, yet with an unmistakable desire to move ever-upwards.
Source: The Movechannel