November 21st, 2016 by Own A Space
A noticeable slowdown in the property rates lowers & a visible up stick in the average rental values in Dubai & Abu Dhabi in the past quarter of 2016 and in the coming months witnessing this downward movement will have a positive bearing on the real estate market constantly tuning its way towards maturity, according to the analysts at a leading dubai property portal.
The rise in the rental values and thereby slowing down of price drops indicates that the market is edging towards stability after months of speculation over global issues such as Brexit & a liquidity crunch owing to low prices of oil.
Picture Courtesy: www.khaleejtimes.com
As per the reports, UAE offers comparatively stable field to deal with the global investors that are looking for growth of capital value and superior rental returns amidst of all the fluctuations in regional as well as western real estate markets. “With UAE economy having ably negotiated the oil price crunches on the back of its diversity both Dubai & Abu Dhabi will remain regional real estate hubs offering attractive returns to the ones willing to have faith in their potential.
However, some are not very bullish about the real estate recovery chances in the aftermath of dramatic win of Donald Trump in the US president election. According to him, there are two prospects- chances of recovery in oil prices and relentless rally in dollar could impact the UAE real estate sector.
UAE’s dirham’s peg to the dollar has been making the prices of property costlier for investors & buyers from countries not linked to greenback. Since the elections, the dollar has increased in its value against euro & Chinese yuan.
The average price of apartments in Dubai has lowered to a paltry 1.2% in October compared to the third quarter value, while the drop in Abu Dhabi was significantly smaller at 0.7%. Similarly, the average apartment rent has dropped by 1% posting an encouraging 1% rise. These changes in both the rental & sale markets will bear a positive effect on the real estate which is in line with its way towards maturity.
Picture Courtesy: www.businessnews.ae
Apartment rents across Dubai in all categories averaged Dh 24,000 in October 2016, showing a 1% rise compared with September 2016 figure. Average yield for apartments in Dubai has also increased by 1% thereby reaching 5.6% though the rental yield for individual categories went as high as 7.8%.
The first 3 quarters of 2016 witnessed downward adjustments of rents in Abu Dhabi making accommodations more affordable for tenants. However, the downward spiral looks like it’s going to end as the average apartment rent rose by 1% to Dh 1,30,000 in October,2016 compared to September price level.
The rental average also has been stable when against the third quarter value, while the overall rental yield remained at 7%.
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