A report released yesterday says that Dubai expats and tenants are increasingly becoming real estate owners. The study highlights the importance of the rates as a major sign of the growing confidence on Dubai’s residential market.
Dubai-based real estate consulting firm, Unitas Consultancy released the results from the study Home Ownership: Dubai’s Road to Prosperity 2013 yesterday. According to the numbers, owner-occupied home ownership in popular residential areas such as Dubai Marina, Jumeirah Lakes Towers, Arabian Ranches, The Greens, The Springs and the Meadows, accounts for nearly one in six transactions, or 15 percent of all. This is a little more than double rate from four years ago and for the consulting firm, it’s a clear sign of the shifting from an investor dominated market to ”an end-user owner occupied society”.
The growing number of end-users in Dubai shows the city as comparable to other international cities. Mortgages among residents are increasingly rising regardless of price changes, and the trend is expected to continue considering the constant creation of new jobs. According to the statistics, in The Meadows and The Springs around 28 percent of the homes are owned by mortgage holders, followed by the Arabian Ranches and its 25 percent, while the figure in The Greens has reached 23 percent.
The research also shows that there is a strong preference for Government Sponsored Developments (GSDs) guaranteeing higher and more stable rates of ownership, compared to private sector buildings such as the Dubai Marina and Jumeirah Lakes Towers (JLT), having mortgage percentage of 6.55 and 11, respectively.
The expected increase in the population is the strongest factor to stimulate residential and commercial demand. The annual increase in Dubai population of 6 percent will lead to estimated 3.25 million residents by 2020, which puts Dubai among the fastest growing cities in the world. Of course, the job market will also influence the home ownership, with Dubai World Central and Al Maktoum Airport expected to give opportunity for more jobs and new communities to grow and develop.
One of the most important highlights of the report is the slow shift of consumers’ interest from once low-priced homes to now higher quality apartments and communities. It becomes clear that quality is preferred not only over price concerns, but also location. For example, Arabian Ranches has outperformed Emirates Living, and the trend is expected to accelerate with the development of the Mohammad bin Rashid City and Dubai World Central. The report also points the Dubai World Expo as a strong catalyst for the city growth; not only for the creating of thousands of new jobs, but also playing a role in residents’ moving to neighborhoods and communities near the Sheikh Mohammed bin Zayed Road.
The real estate consulting firm also claims that JLT is experiencing a real renaissance which will continue for at least several years in the future. According to the report, JLT has become the preferred destination for living for the middle and the upper middle classes with one- two- and three- bedroom apartments as the most usual choice for both end-users and investors.