More than half (52 per cent) of investors in Dubai’s real estate market intend holding on to their property assets while more than a quarter plan on building new property or buying afresh, according to the just released Real Estate Investor Sentiment Survey by Jones Lang LaSalle (JLL).

Interestingly, only about one-fifth of investors plan to sell their property, equal to those that plan to buy, suggesting equilibrium among buys and sellers in the Dubai market.
“Results from this survey indicate that the Dubai market has an equal number of potential buyers and sellers, a change from the sentiment six months ago when buyers outnumbered sellers by around eight percent,” the JLL report points out.
“However, the majority of investors still prefer to ‘hold’ assets in Dubai. This remains the largest percentage of ‘hold’ among all Mena markets, with other PGCC markets and Abu Dhabi coming in second and third, respectively. This may be indicative of the unwillingness of investors to sell assets at a loss.
“Overall, the ‘hold’ sentiment has decreased across the majority of markets, and range from 52 per cent in Dubai to 14 per cent in Egypt , decreasing by nearly 10 percent over the last sixth months. This may be due to the fact that markets have started to enter the consolidation phase and products meeting the requirements of buyers are trading more freely,” the report argues.
The JLL report maintains that the expectations that Mena markets are either close to bottoming out or have started to recover is reflected in the general improvement in sentiment. The future real estate performance in all markets across the region except the UAE is perceived as being more positive than six months ago.
“Although Dubai continues to show a negative net balance, sentiment has improved by over 70 percent from the survey conducted in April 2009, when uncertainty was at its peak for Nakheel and its parent company
[Dubai World]. Since restructuring initiatives were announced by the government however, sentiment towards Dubai has remained relatively stable, underlining the improved confidence of investors and the ease of the market as compared to other regions in Mena,” the report says.
However, investment sentiment towards the Abu Dhabi market has weakened over the past six months, driven by a general slowdown in the economy, continued tight liquidity and the inter-relationship with the Dubai market.
Nevertheless, JLL opines that the future prospects for the Abu Dhabi market remain bright, driven by a number of factors. “The outlook for oil prices and productivity remain positive, driving GDP and generating revenue surpluses that can partially be re-invested into the economy in the medium term. The weight of sovereign and private wealth, combined with the government’s commitment to economic development and infrastructure will ensure that Abu Dhabi’s real estate markets will recover over time,” it says.
Still, the anticipation of new supply in the pipeline across all sectors is also causing rents in Abu Dhabi to fall from their unsustainable highs of the boom years.
(Source:zawya.com)