After a spectacular crash in property prices, the Dubai homes market is rebounding with rents and prices set to increase over the next three years, says a leading property developer.
Delegates were told by Hussain Sajwani, the chairman of real estate developer Damac Group, that a number of conditions were in place to boost the property market.
Mr Sajwani says he is now predicting rents will rise in the next three years because of high demand from renters and a low supply of rentable properties.
Helping the situation, he says, is the fact that the recently announced projects to build large numbers of housing will take three years to come to the market during which time demand will continue rising and taking an increase in rents and prices with it.
Talking about the world’s financial crises which saw Dubai’s property prices crashing by nearly 50%, Mr Sajwani said the experience was not only steep and severe but also painful for the real estate market.
Massive gap in supply
The result was that from 2009 to 2011, developers were reluctant to build new housing projects, which has led to a massive gap in supply and demand for property in Dubai.
He told a seminar that the property market in the United Arab Emirates was boosted by tourists and a boom in the hospitality inn trade sectors.
In addition Dubai and Abu Dhabi are increasingly vital business hubs within the Middle East.
The property market is also been boosted by major investment from people looking for a safe haven for their cash and assets, with many seeing the UAE being politically stable and having great prospects for future growth.
This is just one reason why Dubai is becoming an increasingly sought-after location for property in the world market by investors.
Mr Sajwani also praised the massive investment being made in the UAE’s infrastructure which is also helping to attract investors and help boost the country’s real estate sector.
He said: “Our infrastructure is among the best in the world and we have built very good roads, hotels, communications and airports to make Dubai a global city.”
However, he also praised the creation of the Real Estate Regulatory Agency, or Rera, which has helped bring confidence and security for homebuyers and property developers by introducing a transparent and comprehensive regulatory framework which is being enforced.
Mr Sajwani said that while Dubai had seen its property market boom for and then go bust he said there was no doubt that the market is returning again for predicting its performance in the long on medium term is going to be difficult.