Dubai’s real estate market will follow a more sustainable pattern in 2015 but the emirate’s hospitality industry will continue to boom this year, according to the first Real Estate Predictions report launched this week by Deloitte Financial Advisory.
“Dubai’s property market has experienced another year of change, with a leveling off in capital growth, in certain areas, towards the end of the calendar year,” says Deloitte Corporate Finance managing director Robin Williamson. “This new characteristic suggests a market that is in fact maturing and arguably strengthening. Provided growth continues at sustainable and realistic levels over the medium term, this is likely to improve end-user and investor confidence, which will have obvious benefits to the Dubai property market as a whole.”
Deloitte says that residential transactions have slowed to a more sustainable level, reflecting the longer term trend, and predict this level of transactions to continue for the remainder of the year. Residential sales prices in Dubai may continue to soften by 1-5 per cent in the first half of 2015 before stabilising in the second half of the year.
Deloitte says growth of 7-9 per cent in international overnight visitors in 2015 is realistic. Occupancy and ADR levels will be broadly maintained at current levels for 2015. Growth in upper upscale and luxury segments will be constrained by recent increases in the hotel key inventory. There will be relatively strong growth again in the upper midscale, midscale and economy sectors, based on limited completions planned this year.
“Dubai’s status as a leading retail destination globally is predicted to continue to drive demand from world renowned retailers, “ the report says “Apple has announced that it will open a new regional store in Dubai this year, expected to be their biggest outlet in the world, and we predict additional demand from leading retailers for flagship stores, who have not yet debuted in Dubai.”