DUBAI // The property markets in Dubai and Abu Dhabi are expected to be stable this year although there are some fears that speculation in off-plan projects could lead to “excessive price growth” in Dubai.
The findings are part of property website Bayut.com’s annual UAE market report for 2014, which shows a renewed confidence in the property sector in the two largest emirates.
“Construction activity is picking up pace again thanks to the revival in real-estate developments and infrastructure projects,” said Bayut.com chief executive Haider Ali Khan.
“The recovery in real-estate prices, a bounce in bank financing for construction and the return of off-plan sales, in particular, have motivated developers to resume the projects that were on hold in both Abu Dhabi and Dubai.”
The report highlighted Dubai Marina as the most searched-for property area for sales and rental searches in that emirate, with Al Reem Island topping the search for both categories in Abu Dhabi.
The report noted that Dubai Government’s introduction of new regulations have helped to stabilise growth and slow down further price increases. In addition, the Central Bank has imposed a 75 per cent mortgage cap for expatriates and an 80 per cent cap for Emiratis.
Despite this and an increase in transfer rates from 2 per cent to 4 per cent, Dubai continues to be a magnet for capital.
Expo 2020 is also giving investors more confidence in the country’s hospitality sector, with a further boost in tourism expected as the event approaches.
“However, there are still concerns that returning speculation, including through off-plan sales, could make Dubai head towards excessive price growth and rapid overdevelopment,” Mr Khan said.
Foreign investment is also playing an important role, with half of real-estate transactions, which total Dh113 billion, made by overseas buyers last year.
Indians invested the most, at Dh10bn, followed by Britons, at Dh5bn, and Dh4.5bn from Pakistanis. GCC nationals combined made up Dh33bn of real-estate transactions.