Quotes: MENA   Enter Symbol: NewsLetter: Search: advanced

Rental returns in Dubai Abu Dhabi raise alarm  Join our daily free Newsletter

MENAFN - Khaleej Times - 09/06/2014
No. of Ratings : 0
Add to Mixx!



(MENAFN - Khaleej Times) In its financial stability report the central bank of the uae said average residential sale prices had surged by 24 per cent in dubai and 21 per cent in abu dhabi for the year.

rental yields in dubai and abu dhabi have dipped below historical levels as property prices continue to rise leading the uae central bank to caution that they could indicate a growing imbalance.

in its financial stability report 2013 released on sunday the central bank of the uae said average residential sale prices had surged by 24 per cent in dubai and 21 per cent in abu dhabi for the year. rental yields in both emirates slipped below eight per cent.

“current average rental yields in dubai and abu dhabi are approximately 70 basis points (bps) and 130bps below historical averages [respectively] which could indicate growing imbalances [and an] overheating real estate market” the central bank said.

however it noted growth in bank loans were stable unlike the sharp rise that had accompanied the previous upswing for property in 2008.

decreasing yields had so far been concentrated in areas with the greatest price rises and nearly all freehold developments were demonstrating higher growth rates than the city average the report said.

the indicators suggested non-gcc citizens equity and external funding sources were driving the property price rises. monitoring the uae real estate market’s development and banks’ exposure to it remained a core financial stability priority the central bank said.

commenting on the report mat green head of research and consultancy uae cbre middle east said new regulations in the property sector were helping it steadily progress towards maturity.

“government intervention to curb speculative buying activity is already apparent” green said.

it was hoped that these recent regulatory changes together with the dubai land department’s doubling of transfer fees on propery sales would help hold down speculation and allow dubai’s real estate sector to see more sustained growth in the long term he said.

last month the imf asked dubai to take stronger measures to curb speculation in the property market.

green said the sheer volume of new project launches in the residential market was once again becoming a point of concern though as yet the actual delivery of new supply had not reached a point where demand was being rebalanced.

“significant investment is again taking place in the off-plan segment with investors enticed by the attractive payment plans with many offering low initial deposits and back ended structures which are allowing more people to enter the market” he said.

“with a flurry of project announcements and renewed investment activity the market should quite rightly be cautious of overheating.”

according to the central bank report deviations of rental yields from long term averages were commonly used to identify imbalances in the housing market and were considered to be a reliable indicator of the state of the property cycle.

but an alternate measure — subtracting the emirates interbank offered rate — was a better indicator for property as a pure investment option. taking that view the decline in rental yields over the last three years were comparable to the decline in returns in the money market it said.

bank finance for the purchase of residential property increased by 12 per cent in 2013 or by dh12.7 billion indicating that banks were increasingly participating in financing the real estate recovery. but the funds provided by the banking sector was only enough to finance the purchase of less than 30 per cent of the residential properties that were completed in 2013.

economic recovery continues to take place with gdp having grown by five per cent at constant prices in 2013 according to imf recent estimates.

— haseeb?khaleejtimes.com


 


Khaleej Times




  MENA News Headlines
 Jul 24 2016 - IMF grants USD3.5bn credit line to MoroccoMENAFN
(MENAFN) The Intl' Monetary Fund (IMF) granted Morocco a two-year USD3.5bn credit line for structural reforms to boost economic growth.Moreover, the Precautionary Liquidity Line (PLL) is meant for ...

 Jul 24 2016 - NAT allocates rail work for Metro Line 3 in EgyptMENAFN
(MENAFN) The National Authority for Tunnels (NAT) assigned application of the rail work for Metro Line 3 to the ETF-ORC-TSO association.Additionally, the financial offer made by the ETF-ORC-TSO ...

 Jul 24 2016 - The number of High Definition channels is on the rise in the MENA regionMENAFN Press
(MENAFN Press) By May 2016, the satellites covering the Arab World carried 212 HD channels up from 195 HD channels by March 2015. A new report from Arab Advisors Group overviews the High ...

 Jul 24 2016 - Huge fire destroys warehouses in Sharjah's industrial areaKhaleej Times
(MENAFN - Khaleej Times) The firefighting operation took nearly three hours. At leastfive warehouses located in Sharjah's industrial area no 4 were destroyed in a major blaze on Monday. Warehouses ...

 Jul 24 2016 - Four people killed in shooting at Texas apartment complexEmirates News Agency (WAM)
(MENAFN - Emirates News Agency (WAM)) TEXAS, 24th July, 2016 (WAM) -- Four people were killed on Saturday night in a shooting at an apartment complex approximately 30 miles southeast of the ...

 Jul 24 2016 - UAE participates in celebrations for Sfax, Capital of Arab Culture 2016Emirates News Agency (WAM)
(MENAFN - Emirates News Agency (WAM)) TUNIS, 24th July, 2016 (WAM) -- The UAE has participated in the opening event celebrating the city of Sfax as the Capital of Arab Culture, 2016. Sfax is ...

 Jul 24 2016 - UAE non-oil sector growth up 4 percentMENAFN
(MENAFN) The Intl' Monetary Fund (IMF) forecasted the UAE's non-oil growth to increase more than 4 percent on improvement in economic sentiment and fiscal conditions.Meanwhile, economic activity is ...

 Jul 24 2016 - Qatar's GWC profit posts grow of 15 percentMENAFN
(MENAFN) GWC, Qatar's main logistics provider, posted a net profit of USD27.8mn for the first half of this year, up 15 percent, compared to USD24.06mn in 2015.Furthermore, the firm's assets continued ...

 Jul 24 2016 - Solar Impulse 2 takes off for Abu Dhabi in final leg of round-the-world journeyEmirates News Agency (WAM)
(MENAFN - Emirates News Agency (WAM)) ABU DHABI, 24th July, 2016 (WAM) -- Solar Impulse 2 has taken off for the last time on its historic round-the-world trip using nothing but the power of the ...

 Jul 24 2016 - Saudi investments touch USD15.98bn in BritainMENAFN
(MENAFN) Britain contains huge investments from Saudi Arabia by almost USD15.98bn, which are in various investment fields.Accordingly, Britain is a historical friend of the states of the region and ...

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