Dubai Property Prices – Hike This Summer?
Dubai property experiences a low time usually in summer months, typically between June and September. This is due to the fact that the weather is quite hot, making migrants arrive in Dubai during autumn and months that follow. 2008, however, seems to be a different story for Dubai property sector. Dubai property market is much hotter than the sun these days. This has largely become possible because of off-plan Dubai property buyers vying with each other to make investments in Dubai property.
Factors responsible for hike in Dubai property prices:
• High local inflation rates
• Low US interest rates
As a consequence, Dubai property market is being fueled with negative real interest rates. In the present scenario, an investor deferring Dubai property purchase till autumn is quite likely to face at least 10 percent more prices than those during summer months.
The Dubai property market has gained momentum in the year 2008 with the rate of rise in prices speeding up to a level not seen for the last four years and the early days of the Dubai property boom. With Dubai property prices having risen by 10 to 15 percent in April-May this year, they are least likely to slow down over summer months.
On the other hand, it is very much probable that Dubai property prices continue to increase even when there is a deceleration in transactions. In fact, Dubai property sellers are keeping their units on hold expecting a rise in prices. Consequently, there has been a shortage in Dubai property market which in turn has resulted in still higher prices.
It is a bit uncertain at the moment whether owners of Dubai property coming back from their summer holidays will suddenly start selling their properties. Nevertheless, there will be owners who want to cash-out their properties because they are returning home or starting a new venture. At the same time, there would obviously be those who have long-term commitment to Dubai property market for whom sitting on an asset that is rising in value is a perfectly reasonable thing to do.
There is still another argument going on amongst Dubai property analysts. As capital values go up, rental yields are going down. This is because rental hikes may not keep pace with the capital appreciation. At the same time, as per Dubai property market reports, there is 20 percent annual rental inflation. The yields have to be put in comparison with interest rates, which at 2 percent on deposit accounts are not a very good alternative, especially in the context of high inflation rates.
On any given day, buying Dubai property is a better alternative than renting. This saves rent, protects capital against inflation, and makes one take part in the much talked about (and maybe now clichéd!) Dubai property boom. The shortage of completed Dubai property units available for sale is indeed a crucial factor that will buoy up house prices this summer and autumn.
With the required economic forces acting in place, Dubai property boom is here to stay!
Factors responsible for hike in Dubai property prices:
• High local inflation rates
• Low US interest rates
As a consequence, Dubai property market is being fueled with negative real interest rates. In the present scenario, an investor deferring Dubai property purchase till autumn is quite likely to face at least 10 percent more prices than those during summer months.
The Dubai property market has gained momentum in the year 2008 with the rate of rise in prices speeding up to a level not seen for the last four years and the early days of the Dubai property boom. With Dubai property prices having risen by 10 to 15 percent in April-May this year, they are least likely to slow down over summer months.
On the other hand, it is very much probable that Dubai property prices continue to increase even when there is a deceleration in transactions. In fact, Dubai property sellers are keeping their units on hold expecting a rise in prices. Consequently, there has been a shortage in Dubai property market which in turn has resulted in still higher prices.
It is a bit uncertain at the moment whether owners of Dubai property coming back from their summer holidays will suddenly start selling their properties. Nevertheless, there will be owners who want to cash-out their properties because they are returning home or starting a new venture. At the same time, there would obviously be those who have long-term commitment to Dubai property market for whom sitting on an asset that is rising in value is a perfectly reasonable thing to do.
There is still another argument going on amongst Dubai property analysts. As capital values go up, rental yields are going down. This is because rental hikes may not keep pace with the capital appreciation. At the same time, as per Dubai property market reports, there is 20 percent annual rental inflation. The yields have to be put in comparison with interest rates, which at 2 percent on deposit accounts are not a very good alternative, especially in the context of high inflation rates.
On any given day, buying Dubai property is a better alternative than renting. This saves rent, protects capital against inflation, and makes one take part in the much talked about (and maybe now clichéd!) Dubai property boom. The shortage of completed Dubai property units available for sale is indeed a crucial factor that will buoy up house prices this summer and autumn.
With the required economic forces acting in place, Dubai property boom is here to stay!
Labels: dubai, dubai property, property
posted by Property Reporter at
10:49 PM
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