Despite apartment prices soaring to 38 per cent over the past year, as well as Villa costs rising to 24 per cent, Dubai’s property market is not heading towards another crash, according to a report from Standard Chartered PLC.
The UK bank has said that the emirate’s real estate market is now more sustainable, being influenced by an improved economy rather than speculation that will not repeat the same boom-and-bust cycle of 2008.
“The market seems to be driven by fundamentals rather than excess speculation, in contrast to what the market went through in 2008. The outlook of the market will therefore depend on how these fundamentals evolve over time,” says the report.
“Right now, we conclude that there are no serious indications of a speculative bubble in the housing market,” it adds.
Q2 of this year was the fourth consecutive quarterly increase in house prices in Dubai. Prices rose the fastest in The Greens, with a massive 44 per cent climb over the past year – 15 per cent in the past quarter alone. Jumeirah Village was close behind with prices increasing by 40 per cent.
The report also points to a new series of laws that are expected to regulate the market, which will control fast reselling and set thresholds for premiums. Within two years, Dubai could have seven new laws in total, aimed at maintaining property values.
“This commitment towards improving and strengthening corporate governance practices by protecting property rights has helped gain new investors and maintain existing ones. Stakeholders such as homeowners and tenants have regained confidence in the real estate sector, as reflected in the recovery of market prices,” the report continues.
Thursday, September 5- 2013 @ 14:32 UAE local time (GMT+4) Replication or redistribution in whole or in part is expressly prohibited without the prior written consent of Mediaquest FZ LLC.