Quotes: US 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 property 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
 Oct 25 2014 - Qatar's inflation rate to hit 5.5 percentMENAFN
(MENAFN) Qatar's inflation rate in 2014 is expected to touch 5.5 percent due to steady rise in housing rentals, according to the finding of a research conducted by Standard Chartered, The Peninsula ...

 Oct 25 2014 - Flydubai launches two flights to TanzaniaMENAFN
(MENAFN) Dubai-based flydubai's inaugural flights to Dar es Salaam and Zanzibar touched down in Tanzania. The new routes further underline flydubai's rapid expansion in Africa, which has seen the ...

 Oct 25 2014 - UAE air cargo to grow 4.1 percent in 5 yearsMENAFN
(MENAFN) The International Air Transport Association (IATA) Airline Industry Forecast 2014-2018 shows that international freight volumes are expected to increase at a compound annual growth rate ...

 Oct 25 2014 - Qatar- QSL: El Jaish face Al Gharafa todayThe Peninsula
(MENAFN - The Peninsula) Third-placed El Jaish will seek to narrow the gap between them and two higher placed rivals - Lekhwiya and Al Sadd € when they take on Al Gharafa in the ninth round match of ...

 Oct 25 2014 - Somalia- Mogadishu port on development pathThe Peninsula
(MENAFN - The Peninsula) Camels are prepared for export at the loading dock at the seaport in Mogadishu. The Somali government's grand vision for Mogadishu port under its new Turkish managers sees ...

 Oct 25 2014 - Saudi Shias protest death sentencesThe Peninsula
(MENAFN - The Peninsula) More than 100 people protested in eastern Saudi Arabia yesterday to oppose death sentences against a Shia religious leader and seven others convicted after earlier ...

 Oct 25 2014 - Palestine defies US, issues statehood ultimatumThe Peninsula
(MENAFN - The Peninsula) Palestine's chief peace negotiator has laid out in the clearest terms yet plans to establish an independent Palestinian state within three years, even if it means ignoring ...

 Oct 25 2014 - Police kill six militants ahead of key Tunisian pollThe Peninsula
(MENAFN - The Peninsula) Tunisian police killed six suspected militants, five of them women, in a raid on a suburban house yesterday after a 28-hour standoff, fanning tensions ahead of a landmark ...

 Oct 25 2014 - US looking into possible chlorine gas attack in Iraq: KerryThe Peninsula
(MENAFN - The Peninsula) The United States is looking into reports that Islamic State fighters used chlorine gas against Iraqi security forces, US Secretary of State John Kerry said yesterday.Kerry, ...

 Oct 25 2014 - Qatar- Ooredoo marathon offers QR1m prizesThe Peninsula
(MENAFN - The Peninsula) Registration for Ooredoo Doha Marathon 2015 is open, as the company begins preparations to ensure its biggest event yet on January 9.It will provide an opportunity to meet ...

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

IPO News
Islamic Finance News
Private Equity News

How-To Guides
Technology Section

Travel Section

Search News

Market Indices
Quotes & Charts

Global Indices
Arab Indices

US Markets Details

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
Investment Game
Economic Calendar
Financial Glossary

My MENAFN
Portfolio Tracker

Voting

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


 
© 2000 menafn.com All Rights Reserved.  Terms of Service | Privacy Policy | Contact Us | Advertise | About MENAFN | Career Opportunities | Feedback | Help