A multinational organization specializing in real estate investment and consultation has released its most recent report stating how the retail and hotel sectors which are going through augmentation imposed a positive effect in the performance of Dubai’s real estate market in the second quarter.
The second quarter showed slowdown in the rate of growth in the volume of residential sales, for the most part in existing villas even though the residential sector marked an increase in process and rents across most areas said by the head of the research team.
Sales levels have weaken in all sectors lately; this was backed by the data released by the Dubai Land Department stating that the sales of villas in May 2014 was down by almost 50% on the same month in 2013. Average sale prices in the second quarter arrived at 6%, smaller compared to the previous quarter of 10%. Due to this matter, it is expected that the prices in the sector will go down more in the next months mostly in the secondary villa market.
The sustained economic growth has improved the outlook and received demand for commercial space; the high levels of future supply and existing vacancy still hamper the market. The Dubai office market functions according to license structure (free zone/onshore), tenure (strata or single ownership, location and quality. Although, in general the market vacancies linger at 25% high, there are period of shortage that moved the major occupiers to find new space built for their necessities rather than live in sub optimal space in existing buildings.
It is said that rents in the best super regional malls went up by almost 12% brought y the restricted additions of stock and continued interest from retailers. Even though the small shopping centers and secondary malls show moderate increase, the retail sector was cushioned by the high spending brought about by the local residents and tourists and the buoyancy in the retail market is caused by the announcement of the Mall of the World.
Notwithstanding the conclusion of approximately 1,500 additional rooms in the second quarter, the Dubai market continues to flourish, giving the highest Rev-PAR levels since 2008. Average occupancies maintained its stability at about 85% during the year to May 2014, with room rates rising by three years at $276 or Dh1,013 which considered Dubai as one of the strongest performing hotel markets in the world.