Housing market looks forward to Iranian investors as market slowdown continues
- Dubai real estate market could be boosted by Iranian investors
- Associated public spending on supporting infrastructure for Expo 2020 likely to alleviate any concerns regarding job creation
The lifting of sanctions on Iran could boost Dubais real estate market, as Iranians take the opportunity to make significant real estate investments, according to a property report published by US firm Cluttons.
Real estate investment in the emirate by Iranians stood at 12 per cent in 2010, but by the first quarter of 2014 had fallen to a little over 3 per cent.
Dubais real estate market has continued its negative trajectory over the past year, with rents, sales and transactions all declining in the third quarter of 2015.
The Cluttons report goes on to say that in the first six months of this year, the market has registered a 5.1 per cent fall in average villa prices, with apartment prices also declining, albeit at a slower rate of 0.6 per cent over the same period.
Overall house prices in Dubais residential market now stand 3.1 per cent below the same period in 2014, and 21 per cent below the 2008 market peak.
The report goes on to claim that any weakening in regional demand for Dubai residential assets as a result of falling oil prices is expected to be countered to an extent by interest from Iranian investors.
Overall, as the emirates real estate continues to suffer due to low oil prices, weak sentiment and a strengthening dollar, analysts anticipate that this correction is unlikely to significantly affect the market in the long term as the Expo 2020 comes closer. The associated public spending on supporting infrastructure for the event is likely to alleviate concerns regarding job creation and the wider labour market.
Projections indicate the emirates propulation will grow by 400,000 to reach 2.8 million by 2020. This will mitigate the risk of a supply glut and therefore help to sustain rents and stabilise house price growth, says the Cluttons report.
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