Rents in Dubai are expected to bottom out this year, says Jones Lang LaSalle.
Property sales tipped to rise in UAE, but rents remain mixed picture
Property transactions in the UAE are expected to increase this year, while rental prices in the residential market in Dubai are set to bottom out, according to Jones Lang LaSalle.
"For good quality or prime residential [rents in Dubai] we believe that the market is very close to the bottom and by the end of this year we'll be at the position that we'll start to see some recovery as a whole sector in 2013," said Craig Plumb, the head of research at Jones Lang LaSalle MENA.
The property brokerage says that there will be greater variance in rental price trends this year, with rents for homes in some developments staying stable, while prices for others are falling and a few are increasing.
For example, even within the same district, such as Dubai Marina, there are already diverging rental patterns, with rents for some buildings declining, while others are increasing, JLL said.
Sales activity is also likely to pick up, according to the brokerage.
"With increasing investor interest in the UAE market, a higher volume of transactions are expected in 2012, with this growth being driven by private investors and high net worth individuals rather than investment institutions," JLL highlighted in a report it released today.
"We think we will see increased activity in this sector as more confidence returns to the residential sector, perhaps with the UAE continuing to be a beneficiary of the Arab Spring as a relative safe haven, and as more projects get completed and handed over," said Alan Robertson, the chief executive of Jones Lang LaSalle MENA.
But there remain risks.
"There's also one potential new factor that could come along and that's Iran," said Mr Robertson.
JLL's predictions are based on the assumption that it does not escalate into a major armed conflict or closure of the Strait of Hormuz, he said.