Quotes: MENA   Enter Symbol: NewsLetter: Search: advanced

UAE housing market to go higher in 2014  Join our daily free Newsletter

MENAFN - Khaleej Times - 29/12/2013
No. of Ratings : 0
Add to Mixx!



(MENAFN - Khaleej Times) First of all, I'd like to wish you all a great start to the new year and hope that you're enjoying the holidays.

2013 has no doubt been a big year for the UAE property market. Dubai was recently named the world's strongest housing market in 2013 given the city's status as a safe haven with improved consumer and investor confidence. Home prices have been recorded at the highest levels since the downturn and the market has also gained a more favourable reputation for tighter regulation, given the spate of laws we've seen come into effect this year.

So much so that even as 2013 inches to a close, the government has enforced a new rental decree which allows for rents to be increased by five per cent if they are 11 per cent below the market rate for the area rather than 26 per cent, as determined by RERA's rental index. The law will be applicable to private and public sector owned properties in Dubai, as well as those within the free zones.

With fears of a lurking rental bubble especially post the Expo 2020 win, this latest announcement can be seen as yet another initiative by the government to ensure that the momentum within the real estate sector is managed well and that landlords do not arbitrarily hike rents on renewals on any property within the city. This also makes sense given the fact that the many businesses and professionals expected to come in to the country in the years leading to the Expo could lead to heightened demand for properties, causing landlords to demand higher rents.

Reactions to the new rental policy, as expected, have been mixed. Whilst some residents consider this a better move than the recent total removal of the rent cap in Abu Dhabi, others worry that a rise in rents too quickly could drive the market into bubble territory. However, we can also look at the situation from the viewpoint of the landlord. For one, since 2008/2009, tenants in Dubai have enjoyed the benefits of relatively lower rents. Hence, landlords could argue that given the rebounding market, they should be able to pick up better returns. This may also work in the favour of tenants, as more landlords content with rental returns in the long run would mean fewer reasons for them to make a quick buck by evicting tenants. Also, given the huge influx of investors to Dubai in view of Expo 2020, it makes sense to realign and adjust the rental index across private and public sector and free zone owned properties in Dubai.

Amidst all this debate, there are a couple of lessons we need to take away. Whilst landlords should understand their responsibilities and abide by the law, tenants should make sure they understand the Dubai Rent Index that provides average rentals for all key neighbourhoods and use the online Rental Increase Calculator to know the increase their landlords are eligible for.

The house price boom that preceded the downturn was so remarkable that to most people there seemed only one way for prices to go up. 2013 has been a year of change and growth that many hope will carry into the new year. Whilst the housing market has indeed made great strides showing a marked increase in sales and investor interest and setting the stage for thriving demand with the Expo 2020 win, expecting the price appreciation to continue with the same fervour next year seems to me once again a self-reinforcing cycle of popular belief that prices can only go higher. This, of course, is not realistic and a sign of misplaced optimism, as for the housing market stable rather than accelerated growth is what will make it robust and keep the heat out of housing.

Ultimately, supply and demand market dynamics will override other variables. With market and economic fundamentals remaining strong, there is little reason at this stage to question that 2014 will also be a strong year for the real estate market in the UAE.



The writer is the CEO and founder of propertyfinder.ae. Views expressed by the author are his own and do not reflect the newspaper's policy.

 


Khaleej Times




  MENA News Headlines
 Jan 28 2015 - Gulf states to rethink monetary policyMENAFN
(MENAFN) Gulf Arab oil states may need to rethink longstanding economic policies, including their fixed exchange rates, over the next five to 10 years as economic cycles in the region and the US ...

 Jan 28 2015 - DIB picks arrangers for potential Tier 1 sukukKhaleej Times
(MENAFN - Khaleej Times) Dubai - Dubai Islamic Bank, or DIB, said on Tuesday that it picked eight banks to arrange roadshows from January 8 for a potential benchmark size dollar-denominated sukuk ...

 Jan 28 2015 - What next for Londonium and Barclays?Khaleej Times
(MENAFN - Khaleej Times) I have tried to visit Britain on the eve of every general election since the end of the Thatcher era (by Tory regicide, not the ballot box) in November 1990 in search of ...

 Jan 28 2015 - Emirates NBD - holding the banking fortKhaleej Times
(MENAFN - Khaleej Times) The banking industry looks set to sustain positive trends this year due to strong macroeconomic economic indicators, sufficient liquidity and low interest rates in the ...

 Jan 28 2015 - China pumps cash into banks in a bid to accelerate growthKhaleej Times
(MENAFN - Khaleej Times) Beijing - China's central bank has bolstered support for the cooling Chinese economy by injecting another 50 billion yuan ($8.1 billion) worth of short-term loans into banks ...

 Jan 28 2015 - Union National Bank posts 16% jump in annual earningsKhaleej Times
(MENAFN - Khaleej Times) People walking past a Union National Bank branch in Dubai. The total assets of the UNB Group increased by seven per cent in 2014 to Dh93.5 billion as at December 31, 2014. - ...

 Jan 28 2015 - Gulf Arab countries may need to rethink policy: Qatari bankerKhaleej Times
(MENAFN - Khaleej Times) Dubai - Gulf Arab oil states may need to rethink longstanding economic policies, including their fixed exchange rates, over the next five to 10 years as economic cycles in ...

 Jan 28 2015 - GCC retail sector on growth pathKhaleej Times
(MENAFN - Khaleej Times) Dubai - GCC retail sales are expected to grow at a 7.3 per cent compound annual growth rate (CAGR) between 2013 and 2018 to reach $284.5 billion, according to Alpen ...

 Jan 28 2015 - Dubai International airport crowned as world's busiestKhaleej Times
(MENAFN - Khaleej Times) The airport's passenger numbers boosted by 6.1 per cent to 70.5 million in 2014 and pushed the Heathrow down to the second position as London's top airport handled 68.1 ...

 Jan 28 2015 - Sharjah's Dh17.7b budget to ensure economic upliftKhaleej Times
(MENAFN - Khaleej Times) Sharjah - His Highness Dr Shaikh Sultan bin Mohammed Al Qasimi, Member of the Supreme Council and Ruler of Sharjah, on Tuesday approved the 2015 general budget of the emirate ...

more...


 






Google

 
 

Middle East North Africa - Financial Network

MENAFN News Market Data Countries Tools Section  
 

Middle East North Africa - Financial Network
Arabic MENAFN

Main News
News By Industry
News By Country

Islamic Finance News
Private Equity News

How-To Guides
Technology Section

Travel Section

Search News

Market Indices
Quotes & Charts

Global Indices
Arab Indices

Commodoties

Oil & Energy

Currencies Cross Rates
Currencies Updates
Currency Converter

USA Stocks
Arab Stocks
 

Algeria 
Bahrain 
Egypt 
Iraq
Jordan 
Kuwait 
Lebanon
Morocco 
Oman 
Palestine
Qatar 
Saudi Arabia 
Syria
Tunisia 
UAE 
Yemen

Weather
Economic Calendar
Financial Glossary


Financial Calculators

RSS Feeds [XML]

Corporate Monitor

Events

Real Estate
Submit Your Property

Arab Research
Buy a Research

Press Releases
Submit your PR

Join Newsletters


 
© 2014 menafn.com All Rights Reserved.  Terms of Service | Privacy Policy | Contact Us | Advertise | About MENAFN | Career Opportunities | Feedback | Help