Cityscape Dubai & JLL Twitter Q & A, August 2016

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Cityscape Dubai Q&A Session

I was pleased to be able to take to @JLLMENA last week to talk to you about the UAE real estate market. Joined by Cityscape Dubai, we were impressed by the response to the session. Thank you for taking part. If you missed the session we have recorded tweets and answers below.

If you are unfamiliar with Twitter, it allows a response in less than 140 characters. Answers may appear brief and with grammar shortcuts due to the space permitted.

Cityscape Dubai

cityscape-dubaimarket close to bottom so good time to consider buying residential property

cityscape-dubaifalling value of pound will be -ve for those earning money outside UAE. Little impact for British buyers living here.

cityscape-dubaiDubai is probably a safer bet as market is more mature and prices have fallen more in Dubai cityscape-dubaiwe expect London to continue attracting ME money as falling GBP has made property relatively cheaper there cityscape-dubailess impact on Abu Dhabi as market attracts less British money than Dubaicityscape-dubaiaffordable housing remains in strong demand so we hope the new projects announced will continue and more will be developed cityscape-dubaidefinitely a danger that this will happen – more demand for affordable rather than luxury product right now cityscape-dubaiwhile still demand from retailers, market would be flooded if all announced projects proceed. Luckily they will not cityscape-dubaiDubai market now close to trough so not much further to fall. Key question is when prices will actually increase cityscape-dubaiexpect to see lots of new project launches – so see you at Cityscape Dubai in September cityscape-dubaiIf you mean the Nakheel project in Jebel Ali – this is definitely a good location with all the activity around Dubai South cityscape-dubaiclearly varies but definitely growth in smaller formats eg Carrefour Express and Spinneys Market concepts cityscape-dubaidefinitely having an effect. Russian buyers have disappeared. Most growth from US$ linked countries, except China still active cityscape-dubaijust got back from Cairo and still lots of interest, problem is currency restrictions- and no one knows about proposed VAT cityscape-dubaifalling GBP should not bother Brit expats living here but they may also decide to invest back home cityscape-dubaiJLL MENA definition of affordable housing. Still hoping to see more such projects in Dubai cityscape-dubaicongestion already bad – been to JBR recently? Dubai needs more public transport and extension to metro cityscape-dubaimarket in this area is likely to benefit from metro ext’n, so could be good time to go ahead with small project like this cityscape-dubaiyes, strong interest in pooled investment vehicles given lack of REITs in Dubai. Also interest in alternative asset classes cityscape-dubaionly look at off plan if you get good discount and flexible payment terms. Otherwise its better to buy completed unit. cityscape-dubaiNo, market close to trough with not much further to fall in JLL view. cityscape-dubaimany investors now looking at ‘alternative assets’ such as schools and hospitals, JLL releasing report on this at Cityscape cityscape-dubaiprices in AD tend to be higher than in Dubai and with prices falling in Dubai and some people moving back from Sharjah cityscape-dubaimarket likely to slow so 2021 would be good time to buy. Govt has launched new 2021 vision to minimize any decline cityscape-dubai

Fires are a real issue and could increase interest in villas and other low rise formats. cityscape-dubaismart retailers & developers likely to use this in their marketing but they need to be aware of the cultural issues & privacy cityscape-dubaibetter as a getaway than investment as RAK market benefits when Dubai is strong cityscape-dubairentals likely to hold better than prices so rental yields should increase. Expect little change in rents over next year cityscape-dubaiapartments typically offer higher ROI cityscape-dubaiat this stage not much premium for sustainable projects but these are likely to sell / rent more quickly cityscape-dubaiI agree, we need more affordable units for expats. Some developers have recognized this and are providing smaller units cityscape-dubaiExpo certainly one factor but not the only one. Prices will do best close to metro cityscape-dubaiGood to hear from you. Gross yields of 10% asking a lot, more likely to be 7% – 8%. cityscape-dubaiAD likely to remain soft for next 12 months – you can find this info in our Q2 Abu Dhabi Real Estate Market report cityscape-dubaithose that are affordable and offer attractive payment terms. Investors becoming more focused on $$$ returns cityscape-dubaiAD market tends to lag Dubai by 12 -18 months so could fall for a bit longer yet

Cityscape Dubai, 2016: September 6-8 at Dubai World Trade Centre
Craig Plumb

Author: Craig Plumb

Craig has over 20 years’ experience providing clients with quality advice on real estate market conditions in the UK, Asia Pacific and the Middle East. With a background in urban economics and spatial planning, he has particular expertise in the areas of property market research, development consultancy, transport related infrastructure projects and corporate real estate.

Since moving to the UAE in 2006, Craig has authored over 50 research reports on different aspects of the MENA real estate market. He has also provided market research and consulting services to major investor, developer and government clients and has appeared as an independent real estate expert before the Dubai International Arbitration Centre (DIAC).

Craig holds a Bachelor of Arts in Economics & Geography from Lancaster University and an M.Phil in Environmental Planning from Reading University (UK).

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