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Dubai luxury home prices still below their 2008 peak
| Published: | 9 Oct at 6 PM |
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Although sale prices and demand for luxury homes in Dubai are now on an upward spiral, values are still falling far short of their peak in 2008.
A recently-released residential property review of this year’s second quarter notes that luxury villas and high-end apartments showed a strong increase of 21.4 per cent over the previous quarter’s results along with significantly increased demand. However, prices are still 30 per cent or more under the levels seen in 2008 before the financial crash.
Much of the renewed interest is from potential buyers in North African and other Middle Eastern countries hit by civil unrest. Investors are looking at properties in the emirate as it’s now considered a political and economic safe haven.
The increased activity in the real estate market is sparking government concerns that superheated prices will result in yet another property bubble fuelled by speculation rather than the desire to live in Dubai. As a result, plans are being considered which would cap the values of mortgage loans to those wishing to rent out their properties to expats as well as to nationals.
The growth of expat arrivals is also pushing up rents in popular areas by as much as 15 per cent, causing fears amongst the expat community that Dubai could well go the way of Kuwait, where rogue landlords are reputed to be exploiting expat tenants. Under Kuwaiti law, landlords are permitted to double rental charges every five years, either in one jump or by annual increments.
However, housing shortages in the emirate are resulting in the doubling of rents being implemented after one or two years. Empty properties are also being snapped up, redone and overcharged for in order to satisfy the demand caused by an increasing flow of expat workers.
A recently-released residential property review of this year’s second quarter notes that luxury villas and high-end apartments showed a strong increase of 21.4 per cent over the previous quarter’s results along with significantly increased demand. However, prices are still 30 per cent or more under the levels seen in 2008 before the financial crash.
Much of the renewed interest is from potential buyers in North African and other Middle Eastern countries hit by civil unrest. Investors are looking at properties in the emirate as it’s now considered a political and economic safe haven.
The increased activity in the real estate market is sparking government concerns that superheated prices will result in yet another property bubble fuelled by speculation rather than the desire to live in Dubai. As a result, plans are being considered which would cap the values of mortgage loans to those wishing to rent out their properties to expats as well as to nationals.
The growth of expat arrivals is also pushing up rents in popular areas by as much as 15 per cent, causing fears amongst the expat community that Dubai could well go the way of Kuwait, where rogue landlords are reputed to be exploiting expat tenants. Under Kuwaiti law, landlords are permitted to double rental charges every five years, either in one jump or by annual increments.
However, housing shortages in the emirate are resulting in the doubling of rents being implemented after one or two years. Empty properties are also being snapped up, redone and overcharged for in order to satisfy the demand caused by an increasing flow of expat workers.
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