Dubai Economic Revival Driving Housing, Standard Chartered SaysZainab Fattah
Dubai’s growing population and improving economy are driving a rebound in the sheikhdom’s housing market, rather than the type of speculation that fueled the 2008 boom, according to Standard Chartered Plc.
Apartment prices have climbed 38 percent in 12 months and the property rally is also being propelled by Dubai’s status as a haven amid political and economic unrest in other parts of the Middle East, Carla Slim, an analyst at the London-based bank, said in a report today.
Dubai, which built the world’s tallest tower and man-made islands, is recovering from one of the world’s worst property crashes. The market’s revival began in 2011, though this time few buyers are quickly reselling homes to profit from rising demand. That’s underlined by subdued mortgage growth, low off-plan sales and increasing regulations, Slim said.
“We expect housing-market supply to grow at the same pace as demand, with new projects being launched in a more planned and controlled manner than in the past,” Slim, who’s based in Dubai, said in the report.
The Real Estate Regulatory Agency is requiring developers to pay the full price of land and put down a 20 percent construction guarantee as collateral to limit developers’ dependence on proceeds from sales of properties before their construction, Slim said.