Dubai’s rent prices rose a massive 60% in 2013, sparking fears across the region that the property market was growing too quickly for the industry to keep on top of. The last thing everybody wants is another property crash and it seems this fear is fresh on everyone’s mind when discussing the current market. However, is it possible that we are now over the rebound from the 2008 crash or are we still riding the rebound wave?
Judging from what some estate agents and tenants are saying, the increasingly high prices are now starting to be refused by potential tenants. With rent going up and the majority of salary packages now not reflecting the necessary property allowance, many residents are struggling to keep up with their outgoings. There comes a point when enough has to be enough and the tenants need to make a stand. People will start to become fed up of being ripped off and will start to demand more for their money.
From the looks of things, that will be happening this year. If landlords are not getting any interest on their overpriced apartments they will be forced to make the rent prices more reasonable and this, in turn, will steady out the rental market.
Dubai is considered the global hub for tourism in the region and, because of this, there will always be a steady demand for property to both rent and buy. While there are still significant amounts of available property to rent in the most popular areas, such as Dubai Marina and Downtown Dubai, the increasing demand will one day outweigh the supply. However with an estimated 28,000 new residential properties to be finalized this year, it is safe to say that 2014 will not see an overturn in the demand vs. supply balancing act. For now, there will be enough property to cater to all needs.
The most desired areas, on the other hand, are starting to become too desirable, forcing some tenants and buyers to look elsewhere, either due to availability being limited or house prices being too high. As people begin to live in the less populated areas, the population distribution throughout Dubai will begin to even out. Property developers will continue to expand into the deeper parts of Dubai and with time, Dubai itself will therefore be a much larger city. As the city begins to broaden in size the property prices will even out as there will be many more top residential areas to choose from and residents will not be limited to a select, exclusive handful.
As the city continues to grow and develop, so will the demand for high quality yet affordable property. This is when the industry experts need to take care to ensure that the amount of residential units on the market do not over-exceed the amount of people trying to rent or buy property in the emirate. For now, after the high increase in rental prices seen last year, it is safe to assume that we are most certainly over the rebound from the 2008 crash, and with a little luck and guidance hopefully Dubai will not have to face such dire circumstances again.
via:http://www.oceanviewdubai.com/blog/are-we-still-on-a-rebound/
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