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Emirates NBD release Dubai real estate tracker.

This press release contains the second release of data collected from a new survey of the Dubai real estate sector from Emirates NBD.

According to the latest survey, real estate agents in Dubai experienced softer overall property market conditions in June, with just over half (52 per cent) reporting a drop in average sold prices while less than one-in-four (23 per cent) noted a rise in property values over the past three months.

New buyer enquiries also decreased during the latest survey period, driven in part by an expected slowdown ahead of Ramadan, but some real estate agents also cited reduced risk appetite among investors and more subdued underlying international demand than earlier in 2015.

The survey, sponsored by Emirates NBD and produced by Markit, contains original data compiled from a representative panel of Dubai real estate agents, alongside original survey data collected from a representative sample of households living in Dubai.

Commenting on the Emirates NBD Real Estate Tracker, Khatija Haque, Head of MENA Research at Emirates NBD, said, "The findings of the latest Emirates NBD Dubai Real Estate Tracker survey are consistent with weaker sales price data that we have seen in Q2 2015. As the Real Estate Tracker is not seasonally adjusted, slower activity as we head into the summer holidays was to be expected. However, the underlying data suggests that the market is more evenly balanced than the headline indices suggest, and all indicators for the rental sector suggest that the population dynamics remain supportive of the real estate market in Dubai."

Key Findings

Real estate agents indicate that average sold prices declined through Q2 2015

New lettings continued to increase sharply in Dubai, reflecting strong rental demand

Households' expectations of rising property values contrasted with cautious outlook among agents

While real estate agents pointed to a downward correction in property prices over the three months to June, households in Dubai remained highly upbeat about both their current and future property values. Around two-thirds of Dubai households (66 per cent) anticipate a rise in their property value over the next 12 months, compared with just 17 per cent that anticipate a reduction.

On the rentals side of the market, both real estate agents and households in Dubai reported higher average prices over the three months to June. Moreover, real estate agents pointed to robust increases in letting activity (50 per cent indicated an upturn and just under 14 per cent suggested a fall) and a sharp increase in new rental enquiries, especially for apartments.

More than twice as many Dubai real estate agents (52 per cent) reported a drop in property values as those that noted a rise during the three months to June (23 per cent). As a result, the headline Emirates NBD Dubai Average Sold Prices Index registered 35.4 in June, down from 52.0 in April and below the neutral 50.0 threshold. Moreover, the index signalled that falling sold prices in June contrasted with a modest increase over the three months to April. By property type, the index measuring sold prices for villas (32.6) was lower than that for apartments in Dubai (35.9).

Anecdotal evidence suggested that softer investment sentiment and more subdued underlying market conditions had contributed to a drop in overall property prices in June. Mirroring the trend for overall new buyer enquiries, latest data also pointed to a fall in international new buyer enquiries (41 per cent of agents saw a decline, and only 27 per cent reported a rise). Looking ahead, just over half (52 per cent) of Dubai real estate agents expect a fall in property values over the next 12 months, while only 30 per cent foresee a rise. This contrasted with positive sentiment for year-ahead property values among Dubai households.

While real estate agents indicated a price correction for Dubai property values over the three months to June, the latest survey pointed to a robust and accelerated upturn in rental demand. More than half (51 per cent) noted an upturn in apartment lettings against only 13 per cent that experienced a fall. Exactly 41 per cent signalled an upturn in villa lettings, while only 18 per cent suggested a reduction. In terms of new rental enquiries, latest data indicated that demand for apartments continued to rise more quickly than for villas.

Looking ahead, real estate agents (on balance) anticipate a moderate fall in average rental prices over the next three months. However, among households with a rent renewal in the next three months, more than half (58 per cent) expect a rise in their rental price and only 15 per cent foresee a reduction.

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Publication:CPI Financial
Geographic Code:7UNIT
Date:Jul 9, 2015
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