More investment is flowing into the Dubai residential sector, as the property market benefits from unrest elsewhere in the region and the UAE's "safe haven" status, according to a new report.
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"Investor interest and the amount of money seeking a home in the Dubai real estate market has increased during 2011, especially among investors from elsewhere in the GCC region," Jones Lang LaSalle (JLL) said.
These investors are buying "completed, income producing properties, with little or no demand for partially completed or poorly let projects".
The high end sector is highlighted as being a main beneficiary.
"It is important that the Dubai Government moves quickly to grasp this opportunity," JLL said. "This interest is yet to result in rents or prices increasing across the board but some localised markets are now approaching stability.
"Interest from those displaced by the Arab Spring or looking for safe haven residential properties in Dubai is reported to be particularly strong for upmarket villas in iconic projects such as Palm Jumeirah."
The tourism and retail sectors in the UAE have also benefitted in the past few months, as GCC tourists in particular have avoided other parts of the region and headed to Dubai. The hotel market is showing signs of "an early recovery", the report stated.
However, JLL also warned that Dubai remains closely linked to the global economy.
"Concerns over mounting debt issues in both the Eurozone and the US have dented the positive sentiment towards the Dubai real estate market during the third quarter 2011."
Prices and rents of offices in Dubai are expected to decline further over the next year, JLL added.
"The residential market has been more mixed, with villas performing better than apartments. Sale prices for the villa segment continue to trend slightly upward especially for the high end villa segment."
rbundhun@thenational.ae
