The fact that Dubai’s real estate recovery is becoming increasingly broad-based is testament to the progress that Dubai is making economically, and the increasing confidence in the future prosperity of the emirate, and the depth and strength of Dubai’s economic recovery.
Dubai’s real estate recovery did not start with a broad-based distribution. While increasing in momentum over the past 18 months, it had been focused on particular asset types and areas, typically villas in quality projects such as The Villa Project, Arabian Ranches, Victory Heights, The Springs, The Lakes and The Meadows; while apartments in iconic and well-established locations such as Palm Jumeirah, Downtown, Dubai Marina and The Greens have also been performing well. Availability of these asset types in these popular communities was relatively constricted when compared to other projects and areas resulting in what has been described in the industry as a two-tiered recovery.
This view was supported by the fact that the residential inventory pipeline mainly comprises stock situated on the outskirts of Dubai, with projects in Dubailand, Dubai Sports City, Dubai Silicon Oasis and Al Furjan about to be completed.
However, as predicted, the recovery has broadened significantly to include some of the more affordable areas of Dubai. Investors holding properties in International City, Dubai Sports City, Discovery Gardens and JLT are benefitting from the trickle down effect in the market, as people are now seeking more affordable accommodation as areas such as Dubai Marina, The Greens and JBR have become far too expensive.
Properties under our management and located within International City and Discovery Gardens have shown a 23% and 26% increase, respectively, in rental income since the 3rd quarter of 2012, outperforming virtually all of their more expensive peers. In the vast majority of cases, people were relocating from more expensive areas. Meanwhile, a wide variety of apartments we handle in Dubai Sports City, Skycourts and JLT saw prices achieve YTD average growth of 20.5% , 23% and 21%, respectively, with demand being driven mainly by first home buyers and smaller investors seeking the increasing yields on offer.