Dubai's real estate market might be in a bit of a slump at the moment, but Ali Rashid Lootah, Chairman of Nakheel Properties, remains confident in the prospects for the city.
Speaking to PropertyGuru, Lootah shared that the market has already hit the bottom, and is unlikely to continue declining. Lootah also suggests that the dip in prices was brought about by a previous rapid escalation in prices, which meant that the market was due for a correction.
Nakheel however, appears to have been insulated from the decline in prices. “Our prices, for example, didn’t drop,” said Lootah. “If it is a good property in a good location, prices are very stable.”
Lootah’s comments reflect what some market watchers have highlighted as a “flight to quality” amidst a decline in Dubai’s property market, which have seen average prices fall over a two-year period. This suggests that investors are divesting poorer performing assets and moving capital to better performing investments.
Neither is Lootah alone in his optimism when it comes to Dubai’s real estate market. Real estate consultancy CORE recently ran a survey in the third quarter of 2016 among 800 respondents about what they thought about the future of Dubai’s property market. Half felt that the residential market would recover over the next 12 months.
JLL’s recent reports also indicate some light at the end of the tunnel for Dubai’s subdued real estate market. Its most recent market overview for the Dubai real estate market highlighted that “the residential market has now reached the bottom of it’s current cycle.”
However, the consultancy also goes on to caution that while prices are expected to begin picking up again in 2017, “the pace of this recovery is expected to be limited by economic uncertainty and the volume of potential supply.”
Dubai’s real estate market is underpinned by a growth story that focuses on various economic sectors such as finance, trade, services and the meetings, incentives, conventions and exhibitions (MICE) industry. It also won the bid to host the World Expo 2020, and predicts that more than 200,000 jobs will be created due to the event.
“Dubai’s excellent transport, education, trade and recreational facilities already entice millions of people to love, work and spend leisure time in the emirate. As the city continues to grow, so does the need for more accommodation and attraction for residents, tourists and businesspeople. All of this means more new and lucrative opportunities for investors,” said Lootah.
Nakheel is currently showcasing its iconic properties, Palm Tower and PALM 360, at PropertyGuru’s Dubai Property Show this weekend. Both properties are located on the massive man-made island Palm Jumeirah. The event is held at the Four Seasons Hotel, Level 20, Windows East, between 11 am to 7 pm.