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By CM PROPERTY NEWS SERVICE By Parag Deulgaonkar of emirates247.com news.
Published Saturday, November 30, 2013
Property prices in Dubai are set to increase in the short term, but with the real estate sector will witness a stable and sustainable growth in the long run, believe experts.
Jones Lang LaSalle, a global real estate consultancy, says the direct impact of Expo 2020 win will be on investor sentiment, leading to rise in asking price for both plots and ready villas/apartments in developments close to the Expo site and Jebel Ali area.
Parvees Gafur, Chief Executive Officer, PropSquare Real Estate, adds: “We anticipate there could be jump in prices on a instant basis and with a gradual increase on 'actual demand'. Most benefiting could be TIER 2 communities and majority of them are on the corridors of the main Expo venue.”
Rents are less likely to increase immediately as the real consumer will take time to enter markets subject to their mobilisation of businesses, he states, adding there are proper rent controls set by Dubai’s Real Estate Regulatory Agency on existing properties as well.
On the development front, JLL believes supply levels in the corridor to the south of Dubai are likely to increase as a result of a successful Expo bid.
“A number of developers have major land holdings around Dubai World Central and plans to develop these are likely to be ‘kick started’ on the back of the improved sentiment resulting from the World Expo decision,” says Alan Robertson, CEO, Jones Lang LaSalle, Mena.
Cluttons, another real estate consultancy, adds that the market will see a more sustainable and stable growth.
“We feel the much talked about "Expo boost" has already been priced into the real estate market to an extent. Dubai has already seen a surge in property prices and we expect a trend of more stable and sustainable growth to persist over the short term,” says Steve Morgan, head of Cluttons Middle East.
“The fast-tracking of projects designed to complement city's 2020 vision of hosting 25 million tourists is inevitable and this will involve the resumption of work on some of Dubai’s stalled schemes.”
Cluttons believes the majority of investment in the short term will go towards the delivery of the Expo site, accelerating transport infrastructure, retail, leisure and hospitality.
"I believe we will see strong demand across a variety of sectors including retail, tourism and hospitality, for example hotels and malls, as well as residential, commercial and logistics projects that cater to the increased number of visitors - this is an opportunity for real estate developers to make a positive contribution to the future of Dubai,” says Khaled Al Malek, Group CEO of Dubai Properties Group.
He adds: “Though our diverse portfolio of popular residential communities, commercial and retail developments as well as our large land bank, we believe we are well placed to capitalise and support Dubai's growth, and the increased demand a successful Expo 2020 bid will bring."
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