Local developer Nakheel will launch new projects for sale in the second half of this year as Dubais property market shows signs of resurgence.
We had a correction for sure, but nothing drastic. It was a healthy correction. We expect in the second half things to pick up, Ali Rashid Lootah, chairman, Nakheel told MEED on 23 May. We see enquiries increasing, we see more building permits in different areas such as JVC [Jumeirah Village Circle], Al-Furjan, IC3 [International City 3], and a lot of people are submitting designs and starting construction.
Nakheel plans to capitalise on the improving market conditions by launching new development projects for sale. For the last one and a half years we have been focusing on building our own portfolio. We took the opportunity and used our resources to enlarge our residential leasing and retail portfolio, says Lootah. We will be launching in second half of this year more development projects. They will be in well developed areas for the middle class. We see opportunities and we have land. We will halt the sales of land in all these areas and start development ourselves.
Nakheel has decided to move ahead with new projects despite short term forecasts of softening prices in Dubai. Analysts have been expecting further declines for prices and rentals throughout 2016 as the emirates economy continues to adjust to softening global conditions.
Cluttons Dubai Spring 2016 Residential Property Market Outlook released in late April showed that after falling by an average of 3.1 per cent during 2015, residential values fell by an additional 2.2 per cent during the first quarter of 2016. The drop was the largest quarterly decrease in average residential values in five years and the seventh consecutive quarterly decline.
JLL also said in April that there is a decline in the sales and rental indexes for residential properties, adding that the long term outlook remains positive due to future growth and demand drivers like the Expo 2020 and other mega infrastructure developments.