Rents in Dubai to be as high as the Burj Khalifa
Residential rents in Dubai are expected to continue climbing this year but at a slower rate and wider reach than last year — and are unlikely to exceed the 20 per cent rent hike seen in prime locations last year, according to new research by Jones Lang LaSalle (JLL).
Increased supply and limited funding due to the hotly-debated mortgage caps proposed by the Central Bank are expected to dampen the positive sentiment about the real estate market this year, according to the “2013 Top Trends for UAE Real Estate” report issued by JLL on Monday.
About 18,000 new residential units and 550,000 square meters of office space are expected to enter the market this year, the report showed.
The new supply will have a “counter-balancing effect” on the positive sentiment in the market, said Alan Robertson, chief executive officer of JLL during a press briefing.“Funding constraints will apply natural brakes on the scale of new developments in the marketplace,” he said, referring to the regulations by the UAE Central Bank to limit mortgage loans for expats at 50 per cent and Emiratis at 70 per cent of property value.
The regulations could push buyers into looking at smaller properties, and therefore smaller down payments, and move the market towards more cash buyers, said Craig Plumb, head of research at JLL.
The UAE’s real estate market is expected to see an inflow of funding from investors in East Asia, Sub-Saharan Africa and Australia this year, the report stated.
The UAE continues to strengthen its ties with Asian countries such as China and South Korea as well as the recent nuclear with Australia, which may mean that some investment from these countries could trickle into the UAE’s property market, said Robertson.