Dubai property market recovery may already be under way

The head of Dubai broker Core Savills believes that the recovery of the emirate’s property market may have already begun.

In response to a commentary article in The National by veteran Dubai markets commentator Peter Cooper, which suggested that now is the best time to buy property in Dubai, Core Savills’ chief executive David Godchaux said: “I actually think, and this is not to be provocative, that in many areas the right time to buy was a couple of months ago.”

Mr Godchaux said that although the citywide data for Dubai may continue to show year-on-year declines for a few months as prices continue to fall in communities such as Dubailand with more stock to sell, increases have been taking place in some of the more mature – and most actively traded – communities like Dubai Marina, The Springs and Arabian Ranches.

“Some areas we still see softening for one or two years, and maybe the average will look like we are bottoming in three or four months, but you can’t look at the average. You have to look area by area, and I think the good areas have already bottomed.”

Sameer Lakhani, the managing director of research consultancy Global Capital Partners, also argued that prices have begun to turn, but that the current market represents a buying opportunity.

His firm published a report last month which indicated that the difference between the current cycle and the previous decline in Dubai’s property market is that “prices fell faster and sharper” last time but also rebounded quickly. This time, both the decline and the recovery are likely to be more gradual, and in general the market is experiencing “higher highs and higher lows”.

“That’s typically the nature of cycles,” he said.

As a result, he said that it “doesn’t really matter” whether the bottom of the market was six months ago, is occurring now or if it still has another few months to fall.

“If you agree that we are close to the bottom, bottoming out or having turned a corner, you are buying into this thesis of higher highs and higher lows. If you are buying into that, then this is about as good a time as any to buy.”

However, Faisal Durrani, the global head of research at Cluttons, argued that he does not anticipate a return to growth for the Dubai property market until “late summer or autumn” next year.

Its most recent UAE property report, also published last month, did not show rising prices in any community, although both Downtown Dubai and International City had maintained the same price floor for the previous six months.

“What that suggests is that perhaps those markets have bottomed out, but maybe it is still too early to call,” he said.

He believes that the trigger for growth will come with more awards for Expo-related construction work, such as the announcement last week that the first of four infrastructure packages worth a combined Dh1.3 billion had already been awarded, and that the second is out to tender.

“That’s a pretty significant development and that is one of the triggers that we have been waiting for. The fact that the contracts are starting to trickle through means that job creation rates are likely to start accelerating … [but] it takes time before it filters through to the market in terms of fresh demand for residential property.”

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