Property Prices In Dubai Set To Rise In 2018

Dubai skyline at sunset - Aspen Woolf

It’s that time of year where predictions flood in for the worldwide property market for the next 12 months. This year has been economically uncertain for many regions, due to political and economic uncertainty, but it’s good news for the Dubai property scene, according to industry experts Knight Frank.

Modest Increase In Property Prices

Property Prices In Dubai Set To Rise In 2018 Aspen Woolf

Image credit: Michael Theis via Flickr

While the predicted price increase is modest at 1%, it’s still positive news as Dubai should return to growth, after the recent market cycle showed a weaker performance than average.

Knight Frank say that prices of prime residential property in Dubai should rise in 2018, pointing to a return to growth. The consultants point towards government investment in the infrastructure and economy ahead of Expo2020 as the main reason demand is being driven higher.

Expo 2020 is bringing developments, building projects and more jobs, all of which is helping to strengthen the economy. In addition, it’s increasing demand for residential property in Dubai, as well as commercial, retail and luxury space.

How Dubai Compares To Other Regions

The annual Property Forecast report for 2018 covered 13 cities. According to its analysis, Paris should lead the global price growth for 2018. That’s an increase of 9% in a market that has really struggled to increase prices over the last few years. The expected improvement is due to the benefits from the encouraging economic outlook for the Eurozone.

France’s capital is very much set to be back in the game for global investors, particularly those from Europe and the Middle East.

It looks likely that Singapore (at 5% increase) and Geneva (3% increase) could become next year’s most improved property markets. Market sentiment surrounding Singapore’s luxury residential market is improving. Geneva’s privacy, safety and impressive schools make it a popular spot for wealthy families who want to relocate.

Other Global Regional Forecasts

Property Prices In Dubai Set To Rise In 2018 Aspen Woolf

Image credit: Estatesgazette via Flickr

It looks like Hong Kong will enjoy the strongest growth of the major urban markets in Asia with a 7% increase by the end of 2018. This is due to the continuing demand from mainland China.

Here in the UK, prime prices in London look set to rise by an extremely modest 0.5%, but with a cumulative growth in prices over the next five years reaching 13.1%.

Good News For Dubai

While the growth predicted for Dubai is modest, it’s still extremely encouraging news for investors. With Expo 2020 ever closer, there are more reasons than ever to get involved in property investment in Dubai.

Why Liverpool Is Top For Student Housing Investment                 

Student accommodation is one area of the property market that won't be hit by political uncertainty

One area of the UK’s property sector continues to boom, regardless of the uncertain economic outlook for the country.

Research by Savills shows that by the end of 2017, £5.3 billion will have gone into student accommodation investment. Brexit doesn’t appear to have slowed down investment in this sector, and there has also been a 2.2% rise in applications from overseas students since 2016.

Student accommodation continues to attract much interest from investors, as demand is exceeding supply in most regions. Excellent yields can be made by discerning investors, and the north west of England is proving one of the most exciting areas for opportunities in the UK.

Northern Appetite For Student Accommodation

Why Liverpool Is Top For Student Housing Investment                  Aspen Woolf

The north west of the country as a whole is seeing demand increase for student housing, with Mistoria Group demonstrating that the region was up by 38% year-on-year. And Liverpool is one of the most important areas for investment.

There is a real shortage of student accommodation in a city that boasts many higher education offerings. This has led to a situation where there are excellent yields for investors in shared student accommodation. Areas that are particularly ripe for investment in Liverpool include Wavertree, Toxteth, Kensington and Kensington Fields.

Houses Of Multiple Occupation

It’s possible for savvy investors to buy a high-quality, three-bedroom House of Multiple Occupation (HMO) from around £120,000. Each room can be rented out for an average of £85/week, including bills. Extras like en-suite bathrooms can push the rent up to around £110/week. The ROI (return on investment) is attractive, at around 13%. This splits into 8% cash rental and 5% capital growth.

Experts advise investment in HMOs rather than ‘student pods’ (individual rooms or small pods). These are at a disadvantage when it comes to resale value and potential for capital growth, and are far riskier than traditional larger, shared properties. The investor pool for single pods is much smaller than for HMOs, flats and other types of student accommodation.

Other Areas For Investment

Why Liverpool Is Top For Student Housing Investment                  Aspen Woolf

Image credit: Tim Green via Flickr

The Northern Powerhouse is undoubtedly a strongly attractive region for investment in student accommodation. There are many purpose built student accommodation properties (PBSA) in development, as well as the potential of traditional housing stock, giving lots of choice and opportunity.

Research from Simple Landlord Insurance found that the very top university for investors is also up north – in Scotland. Prince William’s Alma Mater, the University of St Andrews offers yields of up to 12%.

At the other end of the scale, the lowest yields come from Oxford University, averaging at just 3.3%. For example, a property in the main student district costing an average amount of £720,000 only brings in about £2,000 in rent.

Dubai Housing Market Shows Signs of Growth

Dubai has a booming property market, especially in terms of rented accommodation.

There has been a significant shift in recent times in the Dubai housing market, if a recent report is to be believed. And it’s one that should be of real interest to prospective investors, as it shows growth in an area that isn’t usually associated with the super-rich image of Dubai.

Encouraging Figures for Growth

Dubai Housing Market Shows Signs of Growth Aspen Woolf

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The research – released by dubizzle Property and real estate consultants JLL in their End of Year Property Report for 2017 – shows that sales leads for properties under AED1,000 per sq ft have risen by an impressive 24 percent in the last 12 months. The findings suggest that it is in Dubai’s mid market segment that things are now really starting to move, with well over half of the residential properties that dubizzle Property are listing falling into this category. It’s part of a wider trend, according to Samer Abdin, the company’s general manager.

“Developers in Dubai announced 16 new projects this year – several of them were in the mid-market segment offering attractive payment plans,” he says. “Agencies who are focused on off-plan sales and have inventory that falls under the less than AED1,000 per sq ft bracket are likely to see gains here.”

The First Signs of a Potential Recovery?

Taking an even wider view, the bigger picture in Dubai also seems to be one of encouraging signs of growth in the mid and lower segments of the housing market. It’s no secret that the property market in Dubai has head into the wrong direction in the past, but it appears that the recovery now may well be on its way.

“This is where I believe the market is extremely undersupplied and not adapted to the demand,” says Salah Belkhayat, managing director of property adviser Valuance Consulting. “The prices in that segment are increasing while the rest of the market is still correcting.”

A Real Opportunity for Investors

Dubai Housing Market Shows Signs of Growth Aspen Woolf

Image credit: Maher Najm via Flickr

The research suggests that paying close attention to the differing trends in the distinct sectors of the Dubai property market is a smart approach for investors.

“The Dubai residential market has remained relatively soft during 2017, while there has been little change in average sale prices, rents have continued to decline in most locations,” says Craig Plumb, head of research, JLL MENA. “This disguises variations between different communities and different sectors of the market.”

While many expats in particular may still be earning high salaries, it’s clear that there are a growing number for whom the top-end properties are a step too far. Many have been looking to rent or buy in neighbouring emirates where prices are lower – but the rising demand for affordable properties in Dubai shows that it is still a highly desirable location.

So, while it seems that the higher end luxury market has struggled in the face of low oil prices and unemployment issues, the more affordable parts of the Dubai property market are now bouncing back – presenting potential investors with a real opportunity to take advantage of a sector where demand is increasingly healthy.

Regeneration of Leeds City Centre Brings Investment Prospects

Leeds City Centre Birds Eye View

Leeds is undergoing a major transformation with regeneration projects being proposed in many different areas.

Capitalising on the popularity of the city as an attractive area for young professionals to get on the property ladder, the regeneration plans will continue to bring in people who have become disenchanted with the prices of properties in London and the South East.

Major Facelift Proposed

The area surrounding New Briggate and the Grand Theatre is a historically important, yet run down part of the city. Dating back to the 17th century, this area was considered the heart of Leeds and might be completely transformed if recent proposals are accepted.

Leeds City Council is submitting an application for the Townscape Heritage Programme, run by the UK’s Heritage Lottery Fund. If successful, it will be used to revamp the retail area around the Grand Theatre.

The Grand Quarter

Regeneration of Leeds City Centre Brings Investment Prospects Aspen Woolf

Initially developed in the 17th century by John Harrison, and further altered in the 19th century to become a leading cultural and commercial area of Leeds, the ‘Grand Quarter’ features various listed buildings.

These include the Grade 1 listed St John’s church and the Grade II listed Grand Arcade, which was designed and built in 1897. More recently, the area was allowed to decline due to under investment in commercial properties and by planning being dominated by vehicle access.

Transformation of Historic Buildings

Only 17% of the buildings are currently considered to be in good condition. The scheme looks to transform the area by matching funding from property owners and the HLF contribution to public area improvements.

This will also link in with the huge successes already enjoyed by the ‘Re-Making Leeds’ Programme, which is providing training opportunities for young people, and creating jobs in the building industry.

Student Accommodation

As well as retail and heritage developments, the boom in student housing is continuing in Leeds. London and Scottish Investments (LSSI) have announced that they’re going to expand into the city with proposals for a 17-storey tower block in the city centre.

The tower block, intended for student accommodation, will be built on the site of an ‘80s office block on Belgrave Street. LSSI plans to knock down the office building and replace it with a 17-storey building to house 325 student beds. They also plan amenities such as a gym, outdoor terrace and cinema room.

It’s another clear indication that the move to Purpose Built Student Accommodation (PBSA) has very much reached Leeds, and offers lots of investment opportunities. This proposed project will sit close to St Albans Place, a 376-bedroom building by developer Vita Student, due for completion in 2019.

Mixed Use Projects

Regeneration of Leeds City Centre Brings Investment Prospects Aspen Woolf

Image credit: Tim Green via Flickr

Caddick Developments has plans to regenerate part of the city centre with a £300 million project. They want to transform the Quarry Hill site (2.4 hectares) into a cultural centre surrounding the City College, West Yorkshire Playhouse and Leeds College of Music.

Named ‘SoYo’, the plans include two 16-storey residential blocks, intended for private rentals. Also within the plan are offices, a hotel, bars and restaurants, as well as an overhaul of the public spaces. Assuming approval, the developer wants to start the residential part of the project in spring 2018.

The College of Music itself is currently transforming its campus with a £57 million project, and the West Yorkshire Playhouse is going through a £14 million refurb.

Private Rentals

Dandara has engaged Interserve to deliver a £70 million project for 744 private rented apartments in Leeds. Consisting of four buildings on the southern side of the city centre, it achieved approval already in March 2015.

The apartments will be studio, one, two and three-bed, surrounded by landscaped ground and an underground purpose-built car park. Construction should complete in June 2019. Interserve is also responsible for constructing three schools in the city, with a combined value of £41 million.

South Bank Regeneration

Leeds City Council recommended a major redevelopment for approval. The regeneration of the old Tetley Brewery site on the South Bank includes 85,000 sq m of office space, 15,000 sq m of food, retail and leisure space, two hotels and 850 homes.

Led by Vastint, the UK arm of the developer has been working alongside the council for two years to get this far. They said that the scheme is a “significant regeneration opportunity” that will create “a large number of new homes, jobs and opportunities for investment”.

This number of high quality redevelopment schemes show exactly how much focus is on Leeds as a city with much to offer property investors, whether commercial, residential, or student housing.

Interested in investing. Check out our latest development,  Kirkstall Design Centre.

Why Leeds Is the Best Place in England for New Developments

Clarence Dock, Leeds

New research from Argyll Property Partners shows that Leeds is the best option in England for planning new build developments. The research covers aspects such as value, house price growth, demand for property and the likelihood of planning success.

New build properties in Leeds are worth over 40% more than properties that already exist in the city. In addition, the value of new homes in Leeds are also up 13% year on year.

More Property Sales

 

Why Leeds Is the Best Place in England for New Developments Aspen Woolf

Image credit: Tim Green via Flickr

Leeds is one of the largest local authorities in England, and as such, there are around four times as many property sales in the city compared to the average for England. Another sign that it’s a property hotspot for investors is that the planning authorities approve 95% of all major residential applications.

Second in line for the best city in terms of local authority approval for new build developers is Birmingham, which is followed then by Cornwall, County Durham, Wiltshire, Bradford, Bristol, Manchester and Liverpool. The worst local authority for new build developers was found to be Surrey Heath.

Property Values Growing

In addition to the bonus of understand local authorities, new build developers can benefit from high growth in property values. New builds in Leeds are seeing growth in double digits due to the increasing proliferation of job vacancies. This is driving up the demand for more homes in the area.

There are decent gaps between the prices of new builds when compared to existing homes, which means that there are good profits to be made. The transaction figures are high as well, suggesting that homes should be easy to buy and sell.

Building Encouragement

Why Leeds Is the Best Place in England for New Developments Aspen Woolf

The City Council in Leeds is one of the best in the country for encouraging new builds and developments. Major new projects are springing up all over the city suggesting that many house builders are discovering the opportunities Leeds offers.

Looking at the opposite end of the research, the report showed that high property prices in Surrey mean that developers must pay extremely high prices to secure a site. Compared with other areas of the country, new builds in Surrey Heath are worth around 23% less than existing properties in the same area.

In addition, and directly opposite to findings from Leeds, homes in Surrey Heath are more difficult to buy and sell. Transactions are 50% lower than the average and the local council only approves 75% of planning applications for new build developments.

Investors Benefit Up North

Investors should weigh up options around the country, and focus on the north of England for the best deals at the moment. As well as the statistics shown in the report, Leeds is fast becoming one of the hotspots for a generation of young professionals.

The jobs are there, the regeneration of the city is there, and the space is there for new projects. Add in a sympathetic local council looking to actively increase the new house building developments, and you have a prime location for developers and investors.

If you’re looking to invest, then why not learn more about our latest investment opportunity in Leeds – Kirkstall Design Centre.

Where Are The Most Popular Investment Areas In Dubai?

Foreign investment in Dubai property has seen record levels in 2017.

For investors looking for property in Dubai, there’s a breadth of choice on offer with new communities springing up every year. But where are the residential property hotspots?

Desirable Areas

Aspirational properties are usually found in the newer areas of the city. Some good examples are Dubai Marina, Downtown Dubai and Emirates Hills. Newer communities boast desirable amenities and ever-better facilities, but the older residential areas still attract investment too.

CEO at Core-Savills, David Godchaux, describes some of these areas as “historically core” and where “long term investors and occupiers who are keen on the central locations are the ones holding interest”.

Outlying Areas Remain Stable

Areas that lie further out from the city centre, such as Dubai Sports City and Dubailand, have kept a stable upward momentum. Over in Discovery Gardens, ‘double dipping’ has been prevalent, with new developments reaching completion at competitive prices.

On the other hand, areas such as The Meadows and The Springs have seen a slowdown in sales, despite having led a recovery for districts that consist mainly of villas.

Core Apartment Districts

Where Are The Most Popular Investment Areas In Dubai? Aspen Woolf

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Core Savills Research has issued its Q2 2017 Dubai Residential Market Update, which shows that core apartment districts continue to show steady transaction activity. These areas include Dubai Marina, The Views, The Greens and Jumeirah Lakes Towers.

Outer areas are seeing the largest amount of supply deliveries, while just a few buildings in Dubailand, Jumeirah Village and Al Furjan gained traction for buyers looking for cheaper prices.

This reflects prices as well as the fast turnaround for properties in desirable locations. Units priced at competitive rents in these core apartment locations are only on the market for two to three weeks, clearly showing the active rental market in these areas.

Looking For Affordability

The first half of 2017 showed more sales in the non-premium end of the market, while luxury property stalled. There is a certain amount of reluctance to commit to luxury property all around the world, and this includes Dubai.

Year-on-year prices for luxury property in Burj Khalifa were down by 25%, while Palm Jumeirah Village also saw a decline of between 15 and 18%. These areas are the weakest-performing and also house the most expensive properties in Dubai.

Affordability has become the most important factor of price corrections, shown in mid-priced properties holding their values. Dubailand, which has lower entry level rents than other areas, has bucked the trend of rental softening across the board.

Huge Demand for Key Worker Accommodation

Research assessing rental performance across all price tiers for the seven years from 2010, shows a high demand for accommodation for the drivers of the economy. These key workers include hair dressers, shop assistants and many other mid-level workers.

While back in the 1950s, this kind of housing stock was built at the edge of old Dubai, it’s now in the centre of the city. People want affordable housing close to transport links and facilities.

Data supplied by Cluttons shows that areas with more affordable housing are showing fewer rental dips and spikes when compared to the average. Karama is Dubai’s first affordable housing area and currently accommodates 76,000 people, while International City has 22,000 residential units housing 60,000.

Other Desirability Measures

Where Are The Most Popular Investment Areas In Dubai? Aspen Woolf

Image credit: *Crazy Diamond* via Flickr

Supply can support stability in certain areas of Dubai. For example, in Downtown Dubai there have been no price changes for 12 months. This is due to the lack of space for new homes, and the ensuing 45% drop in launches of new units. The less chance to buy new builds, the more stable the area’s prices remain.

It’s not possible to classify and typecast the real estate market in Dubai, and investors will always have to create a strategy to deal with the sub-locations they are considering.

Trends in Residential Housing

The research from Core-Savills shows various residential trends during the first half of 2017. These include:

  • Supply: More than 3,500 units were delivered in Q2. It was expected that this would slow down in Q3 and by year end pick up again. They estimate 11,200 units for the second half of the year.
  • More transactions at the same value: There were 6% more transactions in Q2 compared with the same quarter last year. The total value stayed around the same.
  • Off-plan sales increasing: This causes a detrimental effect in terms of secondary sales for some apartment districts.
  • Softening rental market: Tenants are more conscious of market conditions and are increasingly renegotiating their contracts, or moving homes completely. Many are also choosing to buy instead of rent.
  • Popular communities like The Views, The Greens and Dubai Marina are maintaining transaction activity.

The 2020 Expo Effect

There is significant investment going on due to Dubai winning the bid to host the 2020 World Expo. Areas around Al Maktoum International Airport such as Dubai South and Al Furjan are seeing a lot of development activity, including various residential projects featuring affordable housing.

These areas are now seen as new and emerging areas, and as communities are established, there will be a corresponding rise in demand. It’s expected that the Expo will herald a spike in rents and property prices in general

Dubai will host around 25 million visitors during Expo 2020, and many developers are hoping to deliver projects in 2018-2019 to cater to this massive rise in demand. There’s no doubt that the Expo will have a positive impact on the Dubai property market as a whole.