Dubai residential market to see slow growth in 2014

Dubai?s residential market, which recorded up to 60 per cent jump in prices and rents, is set to witness slower growth rates in 2014 with the addition of 25,000 new units, property analysts said on Monday.

Rental market posted average increase of between 50 and 60 per cent across all residential apartments and villas in Dubai. While apartment rental rates increased by almost 50 per cent, villa rents rose by 20 per cent, real estate consultancy, Asteco, said in its latest report.

Although average sales prices rose by up to 60 per cent in prime residential developments, current price level is still 21 per cent lower than 2008 peak, said the report.

Asteco report comes amid a cautioning by the International Monetary Fund that a potential property bubble would take place if authorities were not careful. The IMF, after raising its 2014 economic growth forecast for the UAE to 4.5 per cent, has observed a steep recovery in 2013 in real estate sector, with home prices in the Dubai having increased rapidly in selected areas.

In 2014, Dubai?s real estate market is forecast to be the world?s top performer, building on the previous year?s rapid price growth, Knight Frank said in its Prime Global Forecast. It predicted price growth of between 10 and 15 per cent this year, ahead of Asian powerhouse markets such as Beijing and Shanghai.

In the fourth quarter alone, sales prices for Dubai apartments and villas rose by 23 per cent.

via Business – Dubai residential market to see slow growth in 2014.