UAE property market 'a tale of two cities'

20/12/2012 - Dubai Property News Neil King
UAE property market 'a tale of two cities'

Property experts believe Dubai's real estate sector will continue to perform better than Abu Dhabi's in the near future.

While the former has gone from strength to strength this year, the latter has been largely subdued.

According to Jones Lang LaSalle, this trend will carry over into 2013.

Demand for property investments is far higher in Dubai at the moment and this has inevitably led to inflated prices and rental rates in the city. 

Meanwhile, the clamour for new real estate assets in nearby Abu Dhabi is unlikely to be anywhere near as intense as Dubai in 2013.

Unsurprisingly, investors are focusing their attention on more exclusive parts of Dubai and properties along Sheikh Zayed Road and in Downtown Dubai are selling at a premium.

Evidence of this has been seen this week (December 19th), as Emirates 24/7 reported that an apartment in Downtown Dubai was purchased at auction for almost double its reserve price.

The luxurious property was put up for sale by the Dubai Land Department and it was eventually bought for AED 1.39 million, even though the seller was only looking for AED 700,000.

In addition to this, a six-bedroom villa on the Palm Jumeirah was sold for an eye-watering AED 21.1 million - 11 per cent higher than the reserve price.

This just goes to show that Dubai's property sector is already recovering strongly from the global economic downturn and these huge profit margins will no doubt encourage more investors to add to their Dubai portfolios before prices rise even higher.

Alan Robertson, chief executive of Jones Lang LaSalle's Middle East and North Africa region, said: "While 2013 is likely to see a broader based recovery in Dubai, the strongest performance will remain concentrated on those projects for which there is confirmed investment and tenant demand."

The company also predicted that as the volume of freight through UAE's airports continues to rise, more and more investors will look to purchase warehouses to the south of Dubai.

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