Dubai's residential market set for slowdown
Report expects lower levels of growth in rents and prices in 2014
The rate of growth in Dubai's residential property prices is expected to slow in 2014, according to a new report.
Jones Lang LaSalle's 'Real Estate Market Overview' revealed the Dubai residential market witnessed a strong increase in rental values and sales prices in 2013. However, it expects that "while rents and prices will continue to increase in 2014, the rate of growth will decline from the levels witnessed during 2013".
2013 witnessed a 22% year-on-year increase in prices, with the biggest increases in sale prices in areas such as Palm Jumeirah, International City and Jumeirah Lake Towers.
As for rental values, The REIDIN Rent Index increased by 17% year-on-year. Areas such as Sports City, International City and Jumeirah Lake Towers witnessed a larger increase in rental values than prime areas such as Dubai Marina or the Palm Jumeirah.
According to the report, the Expo 2020 announcement has boosted confidence in the residential property market. However, it warned that "if not managed carefully", the rapid price growth could have harmful effects on Dubai's residential market in the long term.
For that reason, “the Dubai government has taken several measures to moderate the rapid increase in prices seen in 2013 and create more stable market conditions,” said Craig Plumb, head of research at JLL.
If all projects are delivered on time, the number of residential units will increase by 8%, translating into 28,000 additional residential units. Most units will be accounted to Dubailand, Dubai Marina and Dubai Sports City.
The report highlights the recovery of all sectors of the Dubai real estate market in 2013.