Pakistanis share 8pc in Dubai property market

Published February 8, 2015
— Reuters/File
— Reuters/File

DUBAI: The share of Pakistanis chasing their luck in the Dubai property market is eight per cent as compared to 12pc of Indians, followed by 5pc each by Iranians, Russians and Chinese.

The total overseas investment makes up 78pc of the property market and the left-over 22pc rests with locals.

This was revealed by Head of Research (Middle East and North Africa) at Jones Lang Lasalle IP. INC, Mr Craig Plumb, while quoting the figures of land department of Dubai in a chat with newsmen who visited the Head Quarters of Sobha LLC, part of multinational Sobha Group, in Dubai from Feb 3 to 5.

Anticipating five to 10pc decline in property prices in the current year, he said “the real estate market is now stabilising.”

Dubai’s real estate sector ended in 2014 on a quiet note as nearly all segments of the market witnessed subdued growth levels in the fourth quarter of 2014.

Average prices and rentals in the residential sector appear to have stabilised over recent months with some locations registering marginal decline, he said.

The second half of 2014 saw Dubai’s residential market stabilise as average rents and sale prices remained relatively flat with marginal declines over the last quarter.

Mr Craig Plumb said the residential sector is likely to remain subdued over the next 12 months as market is expected to absorb 25,000 additional units in 2015.

As Dubai economy continues to expand and job creation grows, demand for affordable housing is expected to increase in the current year.

Craig said the Dubai retail market may witness the delivery of approximately 267,000 square metres of the retail space over the next 12 months of which 118,000 sq metres are due for completion in the first quarter.

No rental growth is forecast over the next 12 months as retail supply expands significantly.

Dubai is still cheaper by 25pc if compared to categories of prime properties of European and Arab countries. Hong Kong is the most expensive, he claimed.

Sobha LLC, part of the Multinational Sobha Group, plans to open sales office in Karachi and Lahore between June and December 2015 to tap the growing demand for property in the UAE.

Sobha LLC Group Chairman Mr PNC Menon told Dawn that one of the main reasons of opening the office in Pakistani cities was good response shown by investors and residents after a print media campaign of Sobha properties in Pakistan in the last two months. “Feedback and inquiries from Pakistan continue to pour in,” he added.

The company is also opening five sales offices in London, Singapore, Riyadh, Doha and Kuwait City.

On falling oil prices and its impact on real estate rates, Menon said oil price fluctuations has nothing to do with Dubai property prices.

He said so far the company has no plans to get listed in Dubai Stock Exchange. However, it is listed in India and has market capitalisation of $760 million.

To a query over checking the background record of any investor/buyer before booking or purchasing property, he said it is job of the Dubai government.

Menon did not comment over future price trend in 2015 but said economic fundamentals for Dubai are stronger than ever.

He guestimated that the share of Pakistani investment in Dubai is four to five per cent as compared to India’s 20pc.

Head of Home Finance Noor Bank Arshad Rana said 80pc purchase of property is based on cash as compared to 20pc through mortgage deals.

He said the property market is now highly regulated as compared to 2008 where investors enjoyed a free hand, collected money and escaped.

Currently shady developers are out of the market since the Dubai government has tightened rules in which loan value is controlled and builders are forced to complete the project on time, he said.

Arshad said cash-rich Dubai market is maturing owing to regular influx of people from various countries and the market is now better controlled, he said, expecting 10 to 15pc decline in property prices in the current year.

Ayman Youseff, Vice President, Coldwell Bankers, said that Dubai market is still attractive where fundamentals are solid, offering excellent yield. Demand for property is coming from various countries.

Media persons from different countries were also taken to the four billion dollar Sobha Hartland project site located three km from Burjul Khalifa covering 183 acres which is expected to be completed by 2019.

The project includes inauguration of Hartland International School in September 2015 while the company plans to break ground of villas and apartments in Q2 2015.

Villa sizes range from 6,259 to 19,241 square feet depending on number of bedrooms and price starts from 2,000 Dirham per square feet.

Excluding Hartland and Mohammad Bin Rashid Al Maktoum City, the company has credentials of delivering 75 million square feet, with 38 million square feet of development under progress and annual turnover of 2.2bn Durham, employing 28,000 people and a land-holding of around 240 million square feet.

Published in Dawn, February 8th, 2015

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