(MENAFN- Khaleej Times) The two sides have opposite views on rents and values in new realty tracker.
A new survey from Emirates NBD suggests a modest overall strengthening in the Dubai property market with real estate agents reporting slightly higher property values and rising new buyer enquiries. KT photo
Real estate agents predict falling rents but Dubai households may see rising rents on renewal in the next three months for apartments and villas latest survey findings revealed on Tuesday.
Agents forecast slight fall in property values over the next 12 months. On the other hand households expect rise in property values in a year.
During the past three months transaction volumes were broadly stable with survey data suggesting that greater sales of apartments were broadly offset by a softer trend for villas.
A new survey from Emirates NBD suggests a modest overall strengthening in the Dubai property market with real estate agents reporting slightly higher property values and rising new buyer enquiries.
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. The next Dubai Real Estate Tracker Report will be published on July 9 2015.
“Amidst a general slowing in real estate activity over the last year the Dubai Real Estate Tracker suggests that the apartment sector is faring relatively better than the villa sector at the moment which is consistent with other transaction data year-to-date. Households appear to be far more optimistic about the outlook for residential real estate prices than agents which suggests that domestic demand is holding up relatively well. Affordability in the villa sector appears to be the main constraint on demand” Khatija Haque head of Research for Middle East and North Africa at Emirates NBD said.
Key findings
Measured overall the proportion of Dubai real estate agents signalling a rise in property prices (41 per cent) fractionally exceeded those noting a fall (38 per cent). By housing type this reflected modest increases in apartment prices while agents noted moderately lower values for villas in the three months to April.
However latest data signalled a reduction in new international sales enquiries with agents citing heightened global economic uncertainty more subdued risk appetite and in some cases the impact of the stronger exchange rate on European investors.
Taken as a whole the survey results are largely consistent with relative stability for Dubai property values as the mid-year approaches while across the rental market robust demand patterns appear well entrenched. April’s survey highlighted rising volumes of new lettings enquiries driving higher rents and a healthy uptake of new rental property. Both real estate agents and households signalled strengthening rental prices.
Sales volume
Dubai real estate agents indicated that robust domestic demand especially for apartments helped to support sales volumes and offset weaker external demand during the three months to April. Moreover anecdotal evidence suggested that agents remain relatively upbeat about underlying market conditions. Positive factors such as Expo 2020 more sustainable funding patterns a strong pipeline of quality developments and rising population numbers were all cited as helping support long-term momentum. Despite lower international sales enquiries the proportion of agents noting a rise in overall new buyer enquiries (45 per cent) exceeded those reporting a reduction (37 per cent). Although villas saw a drop in sales which some agents linked to stretched affordability this contrasted with rising interest for apartments.
Looking ahead real estate agents are downbeat on balance about villa prices over the next 12 months while equal proportions expect higher apartment values (42 per cent) as those that foresee a decline (42 per cent). Dubai households are far more sanguine about price momentum with 57 per cent expecting higher property values and only 19 per cent anticipating a reduction.
New lettings and rentals
On the lettings side of the market strong demand for apartments helped drive a robust upturn in rental volumes during the three months to April. Around 46 per cent of real estate agents noted an overall rise in lettings against just 26 per cent that experienced a decline. Increased new letting enquiries were linked to demographic pressures and favourable market conditions.
Resilient demand for rental property underpinned rising rents in the three months to April.
Looking ahead a greater proportion of real estate agents anticipate falling rent prices over the next three months (38 per cent) than those that forecast a rise (33 per cent). However this contrasted with households’ expectations for their own rents with over half (57 per cent) expecting the price to rise at renewal and only (13 per cent) anticipate a reduction.
In contrast to the trend seen for existing rent renewals the latest survey indicates that people living in villas are slightly more likely to expect higher rental prices over the next three months. Around 58 per cent anticipate an increase for their villa rental charges at renewal while 8 per cent forecast a decline.
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