UAE property now 36% costlier than it was in first quarter of 2013: Bayut.com
Statistics released by Bayut.com, the leading UAE property portal, show that with every passing quarter, UAE is becoming more expensive. Property prices, which rose throughout 2013, continued their upward climb in the first quarter of 2014 and buried any speculation of a bubble.
During the first quarter of 2014, property prices in the UAE experienced an overall hike of 35.90 per cent compared to the first quarter of 2013. For residential apartments, there was an average increase of 14.35 per cent in prices compared to the the fourth quarter of 2013 and a significant 36.56 per cent gain compared to the first quarter of 2013. Villa prices in the UAE also witnessed an average increase of 35.24 per cent over the first quarter of 2013 and an increase of 11.27 per cent over the fourth quarter of 2013.
Returns on apartment rentals also continued to ascend during the first quarter of 2014. Comparing to the first quarter of 2013, the first quarter of 2014 has shown an average increase of 17.79 per cent for apartments whereas the average increase came in at 5.76 per cent compared to the fourth quarter of 2013. Villa rents also increased by 13.41 per cent compared to the first quarter of 2013 and saw a 6.46 per cent gain over the fourth quarter of 2013. The average rental yields recorded during the first quarter of 2014 were 5.47 per cent and 4.55 per cent for apartments and villas, respectively.
Dubai property market sees holistic growth in sales
In one of its recent reports, JLL ranked Dubai third in its City Momentum Index which is an indicator of its strengthening economy and real estate. Another report by Knight Frank listed Dubai amongst the world’s fastest growing premium property markets. An HSBC forecast suggests that Dubai property prices are in for a 10-15 per cent growth during the current year. While all of these reports may be coming from different sources, they do have one thing in common i.e. they all point towards burgeoning property prices in Dubai and trends observed by Bayut.com reflect the same.
Statistics for the first quarter of 2014 show an average increase of 36.89 per cent in prices from the first quarter of 2013 and a 12.60 per cent increase over the fourth quarter of 2013 for Dubai apartments. The rise in average prices of villas comes in at 30.18 per cent over the first quarter of 2013 and a 4.64 per cent over the fourth quarter of 2013.
Dubai rentals continue their upward trend
Apartment rents have also seen a healthy increase at 24.57 per cent over the first quarter of 2013 and 8.29 per cent rise over the fourth quarter of 2013. Villa rents have also managed a similar rise at 13.77 per cent over the first quarter of 2013 and 9.20 per cent over the fourth quarter of 2013. The average rental yield during the first quarter of 2014 remained 5.34 per cent for Dubai apartments and 4.58 per cent for Dubai villas.
Such growth in both sale and rental prices of residential units in Dubai depicts strong demand for these properties in the market. The evidence for this demand also lies in real estate transactional volume in Dubai, which increased by 53 per cent in 2013 for an aggregate amount of Dh236 billion per Dubai Land Department’s statistics.
This demand is not only coming from investors but also from job growth in Dubai over the past year. The non-labour population in 2013 has gone up by 7 per cent compared to 2012 and Oxford Economics report estimates that Expo 2020 will create an additional 275,000 jobs over the course of next seven years.
Abu Dhabi realty sector finds its feet
The Abu Dhabi property market has also seen improvement in the first quarter of 2014. Knight Frank dubbed the city, along with Dubai, one of the world’s fastest growing premium markets and that is evident by the city’s healthy rental yields.
Abu Dhabi apartments have fared better than villas since they have witnessed a positive year-on-year growth as well as a sequential growth in prices. Villa prices also increased in the last quarter of 2013 and gained even more steam with the start of the year. The average cost of an apartment in Abu Dhabi went up by 25.98 per cent compared to the first quarter of 2013 and 3.51 per cent compared to the fourth quarter of 2013. Villa prices on the other hand increased by 21.68 per cent over the first quarter of 2013 and are up by 11.36 per cent over the fourth quarter of 2013.
Rentals slow to catch up in Abu Dhabi
On the rental front, things seem to have cooled down just a bit for Abu Dhabi with rents just hovering below where they were in the last quarter of 2013. They are still up compared to the the first quarter of 2013.
However, the rental yield in Abu Dhabi stayed stronger than Dubai. Bayut.com’s statistics reveal that Abu Dhabi boasted a healthy rental yield of 6.84 per cent and 7 per cent for apartments and villas respectively during the first quarter of 2014.
UAE could see deep, lasting recovery
The UAE continues to show signs of a strong seller’s market. As the cities grow outwards, secondary areas, which were not on the top list of investors, seem to be moving up the charts quickly. This is helping put a much broader and deeper recovery of the real estate market in place and giving a serious boost to investors’ confidence. On the other hand, 2008 is not in distant memory and the fast rise in prices has the individual buyers concerned about jumping into the market. However, these concerns are alleviated by sounder fundamentals, regulated governance, and a strong job market.
Haider Ali Khan, CEO of Bayut.com, feels that the market will remain stable during the summer period and will gather steam in the later half of the year. He reckons the summer would be a great time for potential investors and/or individual to jump in and grab good deals. Khan believes the property market is likely to see a 15-20 per cent increase during 2014.
Aqsa Shabbir is marketing analyst at Bayut.com.
Statistics released by Bayut.com, the leading UAE property portal, show that with every passing quarter, UAE is becoming more expensive. Property prices, which rose throughout 2013, continued their upward climb in the first quarter of 2014 and buried any speculation of a bubble. During the first quarter of 2014, property prices in the UAE experienced an overall hike of 35.90 per cent compared to the first quarter of 2013. For residential apartments, there was an average increase of 14.35 per cent in prices compared to the the fourth quarter of 2013 and a significant 36.56 per cent gain compared to the first quarter...
Statistics released by Bayut.com, the leading UAE property portal, show that with every passing quarter, UAE is becoming more expensive. Property prices, which rose throughout 2013, continued their upward climb in the first quarter of 2014 and buried any speculation of a bubble.
During the first quarter of 2014, property prices in the UAE experienced an overall hike of 35.90 per cent compared to the first quarter of 2013. For residential apartments, there was an average increase of 14.35 per cent in prices compared to the the fourth quarter of 2013 and a significant 36.56 per cent gain compared to the first quarter of 2013. Villa prices in the UAE also witnessed an average increase of 35.24 per cent over the first quarter of 2013 and an increase of 11.27 per cent over the fourth quarter of 2013.
Returns on apartment rentals also continued to ascend during the first quarter of 2014. Comparing to the first quarter of 2013, the first quarter of 2014 has shown an average increase of 17.79 per cent for apartments whereas the average increase came in at 5.76 per cent compared to the fourth quarter of 2013. Villa rents also increased by 13.41 per cent compared to the first quarter of 2013 and saw a 6.46 per cent gain over the fourth quarter of 2013. The average rental yields recorded during the first quarter of 2014 were 5.47 per cent and 4.55 per cent for apartments and villas, respectively.
Dubai property market sees holistic growth in sales
In one of its recent reports, JLL ranked Dubai third in its City Momentum Index which is an indicator of its strengthening economy and real estate. Another report by Knight Frank listed Dubai amongst the world’s fastest growing premium property markets. An HSBC forecast suggests that Dubai property prices are in for a 10-15 per cent growth during the current year. While all of these reports may be coming from different sources, they do have one thing in common i.e. they all point towards burgeoning property prices in Dubai and trends observed by Bayut.com reflect the same.
Statistics for the first quarter of 2014 show an average increase of 36.89 per cent in prices from the first quarter of 2013 and a 12.60 per cent increase over the fourth quarter of 2013 for Dubai apartments. The rise in average prices of villas comes in at 30.18 per cent over the first quarter of 2013 and a 4.64 per cent over the fourth quarter of 2013.
Dubai rentals continue their upward trend
Apartment rents have also seen a healthy increase at 24.57 per cent over the first quarter of 2013 and 8.29 per cent rise over the fourth quarter of 2013. Villa rents have also managed a similar rise at 13.77 per cent over the first quarter of 2013 and 9.20 per cent over the fourth quarter of 2013. The average rental yield during the first quarter of 2014 remained 5.34 per cent for Dubai apartments and 4.58 per cent for Dubai villas.
Such growth in both sale and rental prices of residential units in Dubai depicts strong demand for these properties in the market. The evidence for this demand also lies in real estate transactional volume in Dubai, which increased by 53 per cent in 2013 for an aggregate amount of Dh236 billion per Dubai Land Department’s statistics.
This demand is not only coming from investors but also from job growth in Dubai over the past year. The non-labour population in 2013 has gone up by 7 per cent compared to 2012 and Oxford Economics report estimates that Expo 2020 will create an additional 275,000 jobs over the course of next seven years.
Abu Dhabi realty sector finds its feet
The Abu Dhabi property market has also seen improvement in the first quarter of 2014. Knight Frank dubbed the city, along with Dubai, one of the world’s fastest growing premium markets and that is evident by the city’s healthy rental yields.
Abu Dhabi apartments have fared better than villas since they have witnessed a positive year-on-year growth as well as a sequential growth in prices. Villa prices also increased in the last quarter of 2013 and gained even more steam with the start of the year. The average cost of an apartment in Abu Dhabi went up by 25.98 per cent compared to the first quarter of 2013 and 3.51 per cent compared to the fourth quarter of 2013. Villa prices on the other hand increased by 21.68 per cent over the first quarter of 2013 and are up by 11.36 per cent over the fourth quarter of 2013.
Rentals slow to catch up in Abu Dhabi
On the rental front, things seem to have cooled down just a bit for Abu Dhabi with rents just hovering below where they were in the last quarter of 2013. They are still up compared to the the first quarter of 2013.
However, the rental yield in Abu Dhabi stayed stronger than Dubai. Bayut.com’s statistics reveal that Abu Dhabi boasted a healthy rental yield of 6.84 per cent and 7 per cent for apartments and villas respectively during the first quarter of 2014.
UAE could see deep, lasting recovery
The UAE continues to show signs of a strong seller’s market. As the cities grow outwards, secondary areas, which were not on the top list of investors, seem to be moving up the charts quickly. This is helping put a much broader and deeper recovery of the real estate market in place and giving a serious boost to investors’ confidence. On the other hand, 2008 is not in distant memory and the fast rise in prices has the individual buyers concerned about jumping into the market. However, these concerns are alleviated by sounder fundamentals, regulated governance, and a strong job market.
Haider Ali Khan, CEO of Bayut.com, feels that the market will remain stable during the summer period and will gather steam in the later half of the year. He reckons the summer would be a great time for potential investors and/or individual to jump in and grab good deals. Khan believes the property market is likely to see a 15-20 per cent increase during 2014.
Aqsa Shabbir is marketing analyst at Bayut.com.
