Quotes: MENA   Enter Symbol: NewsLetter: Search: advanced

Overheating risks rise in Dubai realty market  Join our daily free Newsletter

MENAFN - Arab News - 25/08/2014
No. of Ratings : 0
Add to Mixx!

(MENAFN - Arab News) The recent economic slowdown in China is having a profound impact in many of its sectors.

The property market in China which has been showing clear signs of cooling down in recent months is one of those in which the slowdown is expected to be more intense. Price growth peaked late last year reaching a yearly rate of 9.9 percent and has been trending down ever since.

In fact the month-on-month growth rate has been negative since May reaching monthly declines of nearly a full percentage point.

Second-hand house prices contributed the most to the moderation of property prices failing to grow in 19 out of the 70 most prominent cities in China.

Chinese authorities have been trying to moderate overheated real estate prices while meeting the large demand arising from urbanization.

A heterogeneous set of measures such as a tax on capital gains ownership restrictions for residents and mortgage rate hikes have already had a noticeable impact on the market.

Additional construction projects at affordable prices are also adding downward pressure to property market and they are expected to meet the large demand.

The government's recent success taming the real estate prices along with the increased level of affordable housing projects indicates that housing inflation may remain low in the medium term.

In Dubai the property market is at a different stage.

The global financial crisis had a major impact on Dubai's housing market causing a sharp correction in prices that continued for three years.

In the beginning of 2012 property prices started witnessing an accelerating growth rate.

Among other factors large money inflows seeking refuge from the regional instability elevated the economic growth rate of the Emirate and contributed to housing inflation.

Taking the pace of construction s a gauge for the real estate market there are no signs of cooling down.

The number of residential units built in Dubai is expected to grow at an annual rate of 6.6 percent this year according to Jones Lang LaSalle (JLL) projections in comparison to an annual growth rate of about 3 percent in the last two years.

Offices and retail property have also been registering large increases in both prices and stocks and according to JLL figures their vacancy rates have been declining despite the increase in supply. Dubai's real estate market is currently expanding across all types of property.

As history shows the emirate's property market is susceptible to overheating risks.

Memories of the last bubble which burst in 2008 are still fresh and the accelerating prices are already above pre-crisis levels.

Fundamental factors indicate that prices should be increasing in the emirate however it is not clear to what extent the current growth rate of prices is sustainable.

With the aim to ease inflationary pressures UAE policymakers already introduced measures such as taxes on property transactions at 4 percent of the price.

Although the tax rate is far below those found in Hong Kong and Singapore economies that suffered from overheated real estate markets its mere implementation signals authorities are aware of potential risks and may be ready to intervene in advance.

Both real estate markets share similar demand pressures which are expected to persist. However their outlooks are different.

While Chinese policies have already shown effectiveness the effect of the recent measures introduced in Dubai is still uncertain and economic characteristics of Dubai anticipate housing inflation moderation will be a challenging task.

Prepared by Jordi Rof economist at Asiya Investments aninvestmentfirminvesting in EmergingAsia A A


Arab News

  MENA News Headlines
 Dec 1 2015 - Opec oil output increases in Nov, led by Iraq, SaudiMENAFN
(MENAFN) Opec oil output grew in Nov compared with the previous month, led by a rebound in Iraqi exports.Moreover; Opec supply increased in Nov to 31.77mn containers per day, from 31.64mn in ...

 Dec 1 2015 - Etihad Airways enhances presence in East Africa with new service between Dar Es Salaam and Abu DhabiEmirates News Agency (WAM)
(MENAFN - Emirates News Agency (WAM)) ABU DHABI 1st December 2015 (WAM) --- Etihad Airways the national airline of the United Arab Emirates today enhanced its presence in East Africa with the ...

 Dec 1 2015 - Hazza bin Zayed statement on national day UAENationalDay44Emirates News Agency (WAM)
(MENAFN - Emirates News Agency (WAM)) ABU DHABI 1st December 2015 (WAM)--H.H. Sheikh Hazza bin Zayed Al Nahyan National Security Advisor has paid a glowing tribute to the founding fathers who ...

 Dec 1 2015 - Rising foreign investment in Dubai realty to ensure stability in real estate market: H Holding EnterpriseEmirates News Agency (WAM)
(MENAFN - Emirates News Agency (WAM)) DUBAI 1st December 2015 (WAM) --- The growing number of foreign investors in Dubai property will lead to more stability in the real estate market according ...

 Dec 1 2015 - Mansour bin Zayed's statement on national day UAENationalDay44Emirates News Agency (WAM)
(MENAFN - Emirates News Agency (WAM)) ABU DHABI 1st December 2015 (WAM)H.H. Sheikh Mansour bin Zayed Al Nahyan Deputy Prime Minister and Minister of Presidential Affairs has extended his ...

 Dec 1 2015 - ST Topping Pattern Begins to Emerge in USDOLLARDailyFX
(MENAFN - DailyFX) On a fundamental basis, we were already concerned about the viability of a USDOLLAR Index bull flag breakout given the wave of impending "high" level event risk at the end of this ...

 Dec 1 2015 - Saudi- Competition Council launches awareness caign to combat collusion in public tendersSaudi Press Agency
(MENAFN - Saudi Press Agency) Riyadh 19 Safar 1437 AH December 1 2015 SPA -- The Competition Council has launched its 5th awareness campaign for the second year of publication of competition culture ...

 Dec 1 2015 - Competition Council launches awareness caign to combat collusion in public tenders 2 RiyadhSaudi Press Agency
(MENAFN - Saudi Press Agency) The campaign also aims to deliver the message of the Council using a variety of methods of press and electronic ads and the design and production of audio-visual films ...

 Dec 1 2015 - Kuwait Stock Exchange ends session with mixed boardsSaudi Press Agency
(MENAFN - Saudi Press Agency) KUWAIT Safar 19 1437 December 01 2015 SPA -- Kuwait Stock Exchange (KSE) ended its session Tuesday in a mixed board with the price index up by 0.98 points to reach 5803 ...

 Dec 1 2015 - Muscat Securities Market Gains 9 PointsSaudi Press Agency
(MENAFN - Saudi Press Agency) Muscat Safar 19 1437 December 01 2015 SPA -- Muscat Securities Market (MSM) general index (30) today added (9.9) points comprising a rise by (0.18%) to close at ...





Middle East North Africa - Financial Network

MENAFN News Market Data Countries Tools Section  

Middle East North Africa - Financial Network

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


Oil & Energy

Currencies Cross Rates
Currencies Updates
Currency Converter

USA Stocks
Arab Stocks

Saudi Arabia 

Economic Calendar
Financial Glossary

Financial Calculators

RSS Feeds [XML]

Corporate Monitor


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