A number of newspapers’ headlines promote significant shifts in Dubai real estate prices and rental values, suggesting that the boom times are back. However, the reality shows a more subdued recovery or a total absence of recovery for many areas in Dubai.
The Prime Global Rental Index published by property broker Knight Frank showed just a two per cent rise in average prime rental costs in the first half of 2012. According to CBRE, lease rates have even started to see a marginal drop during the third quarter of the year. Jones Lang LaSalle says in its Q3 report on the Dubai real estate market that the real estate investment market has been quiet over the summer months. Similar data released by the most prominent market analysts hardly indicate a new property boom.
- Additional reading: CBRE Dubai Real Estate MarketView Q3 2012, Dubai Real Estate Market Overview Q3 2012, Report
At present, Dubai is completely influenced by world economics. A modest rental growth is in accordance to the global tendencies. Furthermore, real estate prices and rental costs look more likely to shrink in the coming months.
- Further reading: Rentals and Property Prices set to fall in UAE, report
Property investors are not flooding into Dubai like before, despite reinstored traffic jams being reported lately by the media. People and businesses are arriving with the hope of extracting some money from an economy that appears to be faring better than their own, despite the debt restructuring. Investors are at present on the search for income, but not on a shopping spree resulting in piling cash into the local economy.
In addition, there is exceptional capital value property for sale at incredibly low prices in a multitude of other parts of the world.
The desperate efforts of real estate brokers, property owners and a handful local media outlets are unfortunately not enough to lay the foundations for a new property boom. People who are looking to invest in Dubai real estate should be very cautious in choosing location and mode of payments.
- Further reading: Trends and Tips for Dubai’s Real Estate Investors and Tenants
The global economy remains weak and according to a number of estimates, it will remain weak in 2013, if it doesn’t erode further.