KPMG: 'Dubai residential market upturn in 2017'
While 2016 will continue to challenge the Emirate's housing sector, the prospects are positive for affordable housing in Dubai
KPMG’s recently-released Building Confidence report predicts that Dubai's housing property market could witness an "upturn" in 2017.
The report is a review of Dubai's residential real estate sector, and stated the Emirate's housing market could face challenges in 2016 due to "a number of internal and external factors".
Statistics by Dubai Land Department indicate a decline in the number of residential units sold between January 2014 and November 2015.
The report continued: "While certain areas have been more impacted than others in terms of declining prices for residential real estate, the overall magnitude of the decline has been tempered.
"KPMG suggests that this is a result of vastly improved regulations within Dubai’s real estate sector.
"Affordable housing areas have incurred lower declines and, in some cases, even maintained value or rental yield," it added.
Remarking on the figures, Sidharth Mehta, partner and head of building, construction, and real estate at KPMG Lower Gulf, said: “While oil prices remain well below the long term average, which is clearly having an effect on market confidence, Dubai’s improved regulatory environment, broader investor profile, and increased maturity are all indicators that its real estate market should eventually self-correct.
"When preparation for Expo 2020 picks up, we expect to see a significant amount of job creation and an increase in demand for residential real estate.
Kaushal Dayal, director at KPMG’s management consulting practice, added: “After 2008, a number of measures were put into place to regulate the Dubai real estate market.
"The Real Estate Regulatory Agency (RERA), the introduction of mortgage caps and the establishment of the Al Etihad Credit Bureau have mitigated a lot of uncertainty in the market; even in the face of economic pressure from falling oil prices, currency fluctuations, and geo-political uncertainty.”
Mehta concluded: "Although 2016 could be challenging in the short term, with effective regulations in place and the infrastructure investment that is committed as part of Expo 2020, we should see an upturn in the real estate industry in 2017.”