Real Estate Archives - Amora Escapes

China’s Big Property Market Problem Will Take at Least 4 to 6 Years to Resolve

Jeffery Blair — Mon, 08 Jan 2024 10:52:32 +0000

BEIJING — China has a big problem within real estate that will take years to resolve, according to analysis from Oxford Economics lead economist Louise Loo.

Looking at nationwide data — whether based on official estimates of unsold inventory or the construction-to-sales ratio — Loo found it will take at least four to six years for real estate developers in China to complete unfinished residential properties.

That means efforts to boost funding to developers and other efforts to resolve China’s property market problems don’t directly address the bigger issue of uncompleted homes.

“However one slices the data, the existing excess supply in the market is likely to take at least another four years to unwind, absent a meaningful pickup in demand,” Loo said in a report Tuesday.

“Increasing supply coming from secondary market transactions – as households, worried about depleting profits from price declines, sell their second or third homes – is an additional drag to this process,” she said, noting that “developers’ inventory is far too large for households to absorb quickly.”

Apartment homes are typically sold ahead of completion in China, making it critical that developers finish constructing the houses if they are to sell more.

But financing struggles and other issues have meant developers have had to delay home delivery times — discouraging future home sales.

On the extreme end, residential construction in the relatively poor province of Guizhou could take well over 20 years to complete, Loo said in an email, while it will likely take at least 10 years in several other provinces such as Jiangxi and Hebei.

Nomura last month estimated the size of unfinished, pre-sold homes in China is about 20 times the size of property developer Country Garden as of the end of 2022.

Real estate and related sectors have accounted for about a fifth to one-fourth of China’s economy.

Ratings agency Moody’s said late Tuesday it expects that share to decline, in-line with Chinese government objectives. However, the firm pointed out the resulting drop in land sales means local governments may face financial strain if they are unable to offset what’s been a driver of more than a third of revenue.

That means Beijing may need to step in, posing “downside risks to China’s fiscal, economic and institutional strength,” Moody’s said. It downgraded its outlook on China’s government credit ratings to negative from stable.

Moody’s expects China’s growth domestic product to slow to 4% growth in 2024 and 2025 and average 3.8% a year from 2026 to 2030. The firm maintained an “A1” long-term rating on China’s sovereign bonds.

Spillover?

Despite persistent property market troubles, Oxford Economics’ Loo doesn’t expect significant spillover to the rest of the economy.

“We think China’s housing downturn will tread a different path than that of the US, Spain, or Ireland 10-15 years ago, and is unlikely to trigger a broader financial crisis,” she said.

In those situations, falling house prices, mortgage failures and bank lending were interlinked, Loo said, pointing out the difference in China: the greater role of policy, state-controlled banks and more stringent mortgage terms.

Other analysts also expect China’s economy will take its own path.

“We do see some similarities between China’s situation and the economic stagnation in Japan after the latter’s property bubble burst in 1991,” S&P Global Ratings said in a report Monday. “However, S&P Global Ratings believes China can avert this outcome, helped by regulatory action and the strength of its banking and corporate sectors.”

Source : CNBC

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Property Woes Loom Large Over China’s 2024 Outlook: Economist

Victor Lyons — Sun, 31 Dec 2023 01:13:09 +0000

Sustained property woes will continue to be the biggest drag on the world’s second-largest economy next year, with potential buyers hesitant to purchase and developers struggling for cash, according to a prominent economist.

“The real estate sector does show some signs of stabilising, but has it bottomed out? I don’t think we can make such a conclusion right away,” Lu Ting, chief China economist at Japanese investment bank Nomura, said in Beijing on Saturday.

Lu said that with delayed delivery of roughly 20 million presold homes – mostly in lower-tier cities where many private developers have been ensnared – there was a “negative feedback loop” between a public reluctance to buy new homes and a lack of cash among developers to build homes.

It also led to lower income for local governments, which rely heavily on land sales revenue, which in turn meant pay cuts for public sector workers and further drop in new home purchases, he added.

“Without cleaning up the mess [from undelivered presold homes], the real recovery of the property sector still faces a huge obstacle,” Lu said.

Beijing has implemented a series of stimulus measures to prevent the property market from further falls in the second half of the year, but sales have remained sluggish and prices dropped.

Without power from the traditional growth engine, some emerging economic drivers might also come to a standstill in 2024, including the investment boom in the new energy sector and the pent-up demand in the domestic service sector, Lu said.

“The rebound of consumption in the travel and catering sectors may slow down notably, because of the fading of a low base,” he said.

Investment in green energy industrial chains such as solar panels and electric vehicles – which were among the few export bright spots this year – might slow due to overcapacity and rising trade barriers in key overseas markets such as Europe, Lu added.

And weakening external demand as well as lasting geopolitical tensions would further weigh on China’s export sector and foreign investment, he said.

Despite the worsening global slowdown, falling yields in developed economies and a weaker dollar could give Beijing more space to ramp up its fiscal spending, with funding either from markets or its own central bank, according to Lu.

“Weak external demand also limits inflation and leaves more room for the [People’s Bank of China’s] money-printing, which might be essential for rescuing many projects left unfinished by developers,” he said.

He added that neither commercial banks nor local governments had the ability to put an end to the property crisis.

To save the economy, “first, the real estate sector is critical. Second delivery of presold homes is critical. Third, it should be financed by the central government.”

Source : SCMP

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Wealthy Chinese Firms Go Bargain Hunting in China’s Stagnant Property Market

Rick Casey — Sat, 23 Dec 2023 12:21:24 +0000

(Yicai) Dec. 6 — A number of cash-rich Chinese distillers and coal miners have started to buy up land and properties in the country amid a sluggish real estate market.

An affiliate of liquor maker Jingpai paid CNY3.5 billion (USD490 million) for a sought-after land plot in Suzhou, eastern Jiangsu province, in October at a premium rate of 15 percent. The company has bought up a lot of property in Nanjing and Suzhou this year and is cooperating with real estate developers to let it operate them.

And coal miner Inner Mongolia Manshi Coal Group splashed out CNY4.1 billion (USD575.8 million) on three luxury apartment buildings in Shanghai. Two other coal producers, Erdos Group and Huineng Group, also recently spent CNY2.6 billion and CNY6.2 billion, respectively, on property in Shanghai.

Now is the time to pick up bargains as the real estate market is still stagnant and there are stimulus policies that should soon take effect, Zhang Hongwei, founder of Jingjian Consulting, told Yicai. Companies with deep pockets can buy up properties with a long-term view. They should look for prime properties in good locations that have a low price, he added.

Whether it is time to bargain hunt or not depends on the situation and it is still necessary to pay attention to market and policy risks when getting involved in real estate because of the volatile nature of the market, said Bai Wenxi, chief economist of IPG China.

Real estate is a capital-intensive industry with a lack of liquidity so investors need to carefully weigh up the pros and cons before they make a decision, he said.

Source : YiCaiGlobal

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Dubai Property Buyers Need to Get Realistic on Price Expectations

Salvador Cruz — Sat, 23 Dec 2023 03:44:35 +0000

When it comes to property investments in Dubai, the best way forward is to formulate realistic assumptions regarding the trajectory of the real estate market. To do so, it is essential to delve into the fundamental cycle that propels real estate prices.

What are the underlying principles that drive these price? While there exist any number of valid reasons behind the buoyant state of Dubai’s real estate market, they all converge on certain pivotal triggers that fuel price increases.

This cycle commences with an intricate interplay between supply and demand, particularly for ready properties. These residential units serve as true indicators of the actual real estate market’s pulse, as opposed to offplan sales. This is because offplan sales tend to diverge from demand for ready properties, because they are overly reliant on investor enthusiasm and market sentiment to propel them.

A good market run

Consequently, they cease to accurately represent the essential factors that drive the market. Nevertheless, it is vital for all investors – and landlords – to maintain a sense of realism. The rapid price escalation in Dubai property from late 2020 onwards – when the market was at its lowest point – cannot be expected to continue at the same pace indefinitely.

Therefore, it is prudent for sellers and landlords to identify the actual market value of their properties using the open data sources provided by Dubai Land Department. Depending on their willingness to sell or rent, as opposed to waiting for the ‘perfect’ time for a buyer or tenant, they should make informed decisions, even if it entails accepting offers slightly below their expectations.

While there is a noticeable upward trend in the number of transactions, as evidenced by 31,000 property sales transactions and a 23 per cent increase compared to Q3 2022, as well as a sales value of Dh98 billion in Q3-2023, investors must be cognizant that healthy trend, while indicative of market sustainability, does not imply an endless surge in property prices.

The substantial increase in supply, exemplified by the registration of 90 new projects in Q3-23, representing the highest ever for any third quarter in the past. With this surge in supply, demand may become diluted across numerous projects in the market, potentially slowing down the rate of price appreciation.

Unrealistic market dynamics must be avoided for the sake of long-term sustainability. In summary, the Dubai real estate market exhibits stability in terms of transaction volumes and property prices. However, no investment decision should be made without scrutinizing the stats at the unit level. The Dubai Land Department’s provision of data is a valuable resource for all market stakeholder…

Source : GulfNews

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The Property Market Trends You Can Expect Next Year

Lorenzo Joe Hamilton — Fri, 22 Dec 2023 12:15:17 +0000

As we fast approach the end of 2023, the Australian real estate landscape is showing clear indications of the trends that will dominate in 2024.

From shifts in buying behaviours to the rise of urban spread, 2024 is predicted to be yet another dynamic and exciting year in Australian property.

Both buyers and sellers must remain informed and strategic in navigating the evolving property market.

As we usher in 2024, it’s evident that adaptability is key.

While things might seem different on the surface, there are some fundamental aspects of property that remain unchanged.

With that in mind, here are some of the key trends to watch for and my top tips for navigating the property market in 2024:

1. Long delays in buying a home

The general timeframe for buying a home has been stretched, with it now being common for the process to take up to a year. This year has witnessed the slowest conversion rates yet, a trend that is expected to persist in the coming year.

Fierce competition in high-demand areas leads potential buyers to spend more time searching for the perfect property or spend longer waiting for the right opportunity.

Financing and loan approval is also another area of delay with stricter lending criteria and diminished borrowing power putting a dent in buyers’ budgets.

Lastly, time-consuming inspections and settlement processes tend to draw out buying time frames as buyers are mindful of doing their due diligence.

2. The rise of more new apartments

While the surge in brand-new apartments entering the market has given buyers more options to choose from, freshly built housing comes with its own set of risks.

Due to tighter time constraints around the construction of these properties, building defects and the lack of insurance are a deadly combination for prospective buyers.

A NSW government report found that 39% of all residential apartment buildings constructed between 2014 and 2020 harboured serious defects in the common property. 23% had defects related to waterproofing and 14% were to do with fire safety.

This is a problem that isn’t going away as 50%-60% of these defects are attributable to poor design and the clear conflict of interest in certification paid for by the builder/developers.

3. FOMO rears its head in purchasing decisions

Fear of missing out (FOMO) continues to be a significant factor influencing purchasing decisions when cool heads ought to rein. First home buyers keen to leave the rental market are especially vulnerable to its effects.

Despite the fastest interest rates hikes in a generation, Sydney property prices have defied all expectations to recoup two-thirds of the value lost during last year’s slump.

4. AI makes its mark on real estate

While many agents have embraced AI for content creation, the consensus is that a human touch remains a critical part of service delivery.

AI’s role during the COVID era showcased its potential to streamline processes, but the importance of physical inspections in the process of ‘test driving’ a home can’t be undermined.

At a minimum two physical inspections need to take place for buyers to get a feel for a property. In the year ahead, the real estate industry will continue to integrate AI without compromising on the necessary physical elements of buying and selling property.

5. Single and grey divorce buyers on the rise

According to the latest census data, single households are becoming more prevalent than ever in Australia. This shift heralds an era where single buyers are able to achieve the sense of security that property ownership brings.

Since 2022, single female property buyers have been the fastest-growing home-buyer demographic despite the challenges of raising a deposit and servicing a mortgage solo.

Grey divorcees are also a growing segment keen to downsize from the former marital home to a lower maintenance home.

6. Generational inheritance is on the rise

A notable increase in generational inheritance is influencing buying capacities and choices. As Baby Boomers reach their golden years, many are considering early inheritance as a way to pass on considerable resources to the next generation of property buyers.

As property prices spiral out of reach, generational inheritance is the only way many Australians can realistically breach the property market.

Others simply inherit the property their parents leave to them. Either way, this can be a lifeline for Aussies to gain a permanent roof over their heads so long as they ensure their tax liabilities are taken care of.

7. Slim pickings persist in the market

Property stock levels remain low, leading to competitive market conditions that show no sign of abating in 2024. Since listings peaked in March 2022, the number of new listings has been on a downward trajectory. Data indicates new listing volumes in June 2023 were 14.8% lower compared to June 2022.

Property – especially A-grade properties – will remain as desirable as ever meaning there will be no shortage of competition for freestanding family homes.

Property prices will continue to remain stable with little wiggle room to negotiate except for where there is a glut of lower-quality builds such as apartments in less desirable locales.

8. More investors are selling up

An uptick in investors selling properties often with tenants still in place is indicative of the effects of mortgage stress on landlords. Quick sales like this present challenges for first home buyers who are in the market for these types of properties but are hamstrung by the presence of existing tenants.

Given this scenario, potential buyers might benefit from temporarily staying with mum and dad in order to secure the property they want. Cashed-up buyers stand to benefit from landlords divesting themselves of expensive properties if they keep their eyes and ears open to opportunities as they arise.

9. Interest rates to come down and prices to go up

With interest rates tipped to fall at some point in 2024, we will see more buyers seeking entry into the market. The government’s bid to fix housing affordability and ensure more first home buyers gain a foothold on the property ladder will drive significant activity.

There’s a prevailing sense of urgency to lock in purchases now to nab a home before prices rise even higher. This further fuels the sense of FOMO and exacerbates the likelihood of a hot property market in 2024.

Source : MoneyMag

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Dubai Property Market Zooms, Realty Deals Record 37% Growth in 3rd Quarter

Ross Collins — Fri, 22 Dec 2023 03:41:07 +0000

The Dubai real estate market achieved remarkable and unprecedented results in property transactions. In Q3 2023 alone, the value of these transactions soared to Dhs430 billion, showcasing an impressive 37% growth compared to the same period last year, while the number of new investors witnessed a significant upswing of 15%.

This underscores our steadfast dedication to translating and embracing Dubai’s vision and goals and underscores the unshakable confidence investors have in the sector, the resilience of our economy, and its ability to tackle challenges head-on, all of which collectively contribute to the ongoing elevation of Dubai’s competitive Standing.

This was stated recently by Sultan Butti Bin Mejren, Director General of the Dubai Land Department.

Meanwhile, the UAE-based real estate firms AveNew by RH, Pride and Property and Landsmith Real Estate have announced the completion of a joint land transaction worth over Dhs300 million – one of the biggest transactions of its kind – in Dubai’s coveted Jumeirah Golf Estates. Established in 2021, AveNew has created a strong presence in the Dubai Real Estate Market in a short span of time, specialising in helping investors and property buyers secure incredible deals across the Emirate owing to their extensive knowledge of the Dubai Real Estate market and a strong network of agents & consultants.

Landsmith Real Estate, a well-established homegrown boutique real estate firm, and among the pioneers in the luxury property segment in Dubai, specialises in prime residential locations as well as structuring deals and large commercial projects. Pride and Property, another formidable entity in the real estate realm, has immense experience in selling luxury off-plan and ready-to-move-in properties on the beachfront and other prominent locations in Dubai.

The trio combined their expertise to secure the land deal of over Dhs300 million. Jumeirah Golf Estates is among the world’s ten foremost luxury and lifestyle estates and houses over 1,500 villas, townhouses, and apartments.

The transacted land that is part of this deal overlooks an expansive view of the Fairways. It is surrounded by the landscapes of a luxury golf course community which is a renowned name in the annual golf calendar and has hosted 14 editions of the acclaimed DP World Tour Championship’s (European Tour) finals.

Nitin Chauhan, Director of Landsmith Real Estate, expressed his insights into the unique appeal of golf course-facing luxury villas in Dubai.

“The final form of this project will be the epitome of luxury living in golf course communities. Golf course-facing luxury villas are popular but rare in this region. With that demand dynamic becoming apparent and the location of this plot, which overlooks unique views of two Fairways, there was bound to be interest from top developers.”

Popular for his customer-first approach in the real estate market, Nitin is a specialist in luxury villas, plots and apartments in prime locations. He has had a presence in Dubai’s real estate scene since the inception of freehold properties and is an investor in multiple projects and properties.

This land sale serves as a clear indicator that Dubai’s luxury real estate sector is poised for sustained growth and an upward trend in property prices. The sale is also a testament to Knight Frank’s list of the world’s top luxury real estate markets in2023, which placed Dubai at the top – accounting for 17% of global sales in the segment.

Kunal Singh Sandhu, owner of Pride and Property, feels the landmark sale represents the growing allure of luxury real estate in Dubai. “Pride and Property and partners invested significant time and effort into this record-breaking transaction. There has been a significant increase in buyers for luxury properties in Dubai and we think this is just the start for a promising segment. The best is yet to come for the luxury property market in Dubai.”

Kunal has been in real estate since 2007 and has carved a successful path in the luxury real estate niche. Under Kunal’s leadership, they have made luxury real estate their forte and helped launch and manage projects for reputable developers in Dubai The completion of this deal in Dubai is an indicator of the escalating demand for golf course communities due to several key factors.

Foremost among these is the limited supply of such exclusive properties. The scarcity of available golf course real estate contributes significantly to the premium placed on these sought-after developments by discerning buyers. It also underscores the global recognition of Dubai’s real estate market as a lucrative and stable investment destination for local and global buyers, and is another hat-tip to the UAE’s exemplary track record as an investment-friendly real estate market.

Source : GulfToday

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Buying Property in Asia? Real Estate Specialists Give Their Investment Tips

Leon Clarke — Thu, 21 Dec 2023 12:07:41 +0000

Hong Kong’s property market has plunged nearly 20% since its peak, and it may be a good time for homeowners to buy — but investors might want to think twice, according to Peter Churchouse, chairman and managing director of real estate investment firm Portwood Capital.

With property prices in the city down 15-20% since their peak, Churchouse said now may be a good time to buy a property in Hong Kong if you’re looking to own a home, but investors hunting for yield should look at Australia and New Zealand instead.

Investors and homeowners have different priorities, Churchouse pointed out.

For homeowners looking to buy, “prices down this much is probably not a bad time to look to be buying” if you can afford to pay mortgage and down payment, he said Tuesday on CNBC’s “Squawk Box Asia.”

“There’s still a bit of downside risks … but perhaps the worst is over.”

Home prices in Hong Kong dropped for four months straight. The official housing price index stood at 339.2 in August, down 7.9% from a year earlier and 4.2% lower from April peaks.

“Hong Kong is probably the easiest place in the region to buy, and I would think that Japan is probably a close second,” he said.

Buying elsewhere in the region is “fraught with all sorts of difficulties and legal issues … There are all sorts of banana skins,” Churchouse warned, explaining that home buyers in other countries either have to be a resident, permanent resident or an employee.

“Often, you can’t own property as an investor,” he added.

Jeff Yau, Hong Kong property analyst at DBS Hong Kong, said prices in Hong Kong are expected to continue plummeting and could fall by another 10% in 2024.

In October, the Hong Kong government cut stamp duties for property buyers to help boost the city’s slumping real estate market.

Among the relaxed levies, the stamp duty that non-permanent residents have to pay for property and another levy imposed on additional properties purchases by residents will each be halved to 7.5%.

Despite the positive news for homebuyers, demand may not bounce back in full force as the higher cost of financing will remain a hurdle for potential homeowners, said Henry Chin, Asia-Pacific’s head of research at CBRE.

Best rental yield

For investors looking for high rental yield, “Hong Kong is not the place,” Churchouse said. “The yield today is less than the cost of capital, less than the interest rate you’re paying on your loan.”

Rental yield in Hong Kong is currently below 3%, while the effective mortgage rate exceeds 4.1%, implying a “negative rental carry,” DBS Bank’s Yau said.

“If the investors have their first property, they still need to pay New Residential Stamp Duty of 7.5% if they buy a second property,” Yau said. “It is not a good time to buy property for investment.”

Where can investors find good rental yield?

“The best yield in markets in this region, I tend to think, are Australia and New Zealand,” Churchouse said. Yield for residential property or commercial property there may be as high as between 6-8% — “maybe even higher,” he added.

In Japan as well, it’s common to find rental yields of about 5% or 6%, he added.

In a country where interest rates are “very, very low,” he said, “You can get a rental yield that higher than your interest costs in Japan.”

Source : CNBC

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Austria’s RBI: Realized Extra 150 Mln Euros of Property Sector Risk ProvisionsExtra 150 Mln Euros of Property Sector Risk Provisions

Lorenzo Joe Hamilton — Wed, 20 Dec 2023 03:31:13 +0000

VIENNA, Nov 21 (Reuters) – Raiffeisen Bank International (RBI) (RBIV.VI) has realized additional forward-looking risk provisions of around 150 million euros ($163 million) for the real estate sector, the Austrian bank’s risk chief, Hannes Moesenbacher, said on Tuesday.

Chief Executive Johann Strobl added that these provisions are “on top” and therefore go beyond what can be modelled.

Moesenbacher declined to answer shareholders’ questions at an extraordinary general meeting on Tuesday about the bank’s exposure to the troubled Signa Group of Austrian real estate investor Rene Benko, instead referring to banking secrecy.

“In total, our top five commitments in the real estate sector amount to 2.2 billion euros,” said Moesenbacher, who added that number one position amounted to 755 million euros.

Shareholders had convened the meeting, among other reasons, to resolve the distribution of a 2022 dividend of 80 cents per share. At its general meeting in March, RBI had decided not to distribute a dividend for the time being due to uncertainties.

Strobl also told shareholders that RBI was working on variations on how to get capital out of Russia but said a significant discount to the nominal value would be assumed.

Source : Reuters

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Property Owners Stop Making Fire Sale, Expect Market Recovery

Jonathan Barton — Tue, 19 Dec 2023 11:50:26 +0000

Property prices have stopped plummeting as owners, seeing positive signs in the market, are choosing to hold on to their assets believing a recovery is around the corner.

Ngoc, a senior banker, put her 38.4-square-meter house in HCMC’s Phu Nhuan District on sale in early October, but has now decided to wait.

She was offering it at VND5.3 billion (US$ 211,100), 20% less than in 2021, and was even willing to come down to VND5 billion.

But she was unable to sell it, with most buyers haggling down the price to VND3.5-4 billion.

She said: “The house is not in use, so I just wanted to get my money back. I am not under any pressure to cut losses.”

Phuc of HCMC’s Thu Duc City has stopped trying to sell a land plot in Thu Dau Mot City he had bought for VND3.6 billion in 2021.

He said: “At the price I was offering, I would have incurred a VND400 million loss, but buyers were asking me to lower the price further. So I decided to just wait for the market to recover.”

A recent VnExpress survey found an increase in the number of property owners breaking off previous deals with buyers after lending interest rates declined and some new policies to support the property market were announced.

In the townhouse segment, most deals were called off because owners hiked their prices.

Meanwhile, amendments are being made to the laws which will severely restrict the division of lands into smaller lots. This is likely to push up the prices of small plots of land, and so many owners are choosing to wait until they take effect in January 2025.

The director of a real estate brokerage in HCMC’s Nha Be District said many deals, some very close to completion, have fallen through in recent times.

Property owners have become optimistic now that buyers are flocking to the market, he claimed.

According to a report by real estate agency DKRA Group, price cuts of 30-35% were much less common in the land and townhouse segments in November.

Average prices in those segments in HCMC are down 3-10% from a year ago.

Realtor and developer Dat Xanh company said prices of apartments and townhouses are up 2-3% in some locations on the secondary market.

Dr Pham Anh Khoi, head of market research at Dat Xanh Services, said the property market has more or less bottomed, and new policies and positive changes in the market could signal a turnabout to investors, who have stopped trying to cut their losses and are waiting for higher prices.

But the market would make a very gradual U-shaped recovery, meaning it would take until late 2024, he said.

Investors should not hope for a dramatic turnaround next year, he warned.

Le Hoang Chau, president of the HCMC Real Estate Association, said the property market still has to overcome a lot of difficulties to fully recover.

Ngo Quang Phuc, CEO of real estate company Phu Dong Group, said it would take six to 12 months for the market to recover.

Source : VNExpress

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Revealed: Abu Dhabi, RAK to Vie With Dubai as Top UAE Real Estate Investment Destinations in 2024

Jeffery Blair — Mon, 18 Dec 2023 11:38:43 +0000

Capital city Abu Dhabi and emerging tourist and gaming spot Ras Al Khaimah (RAK) are predicted to be the top destinations for real estate investments in the UAE in 2024, along with the ever resilient Dubai, promising substantial growth in the coming year, new market research revealed.

Yas Island, Al Reem Island, and Saadiyat Island are projected to emerge as the top three locations by transaction value in Abu Dhabi, while the areas surrounding UAE’s upcoming first-ever casino in RAK are anticipated to clock the highest return on investments for investors next year, the AI-based study by Dubai-based global proptech Realiste said.

“Amidst the ever-shifting landscape of real estate opportunities, three emirates – Abu Dhabi, Ras Al Khaimah and Dubai – will emerge as magnetic hubs for investors in 2024,” the study predicted.

“Each emirate boasts unique strengths and opportunities for investors looking to capitalise on the region’s dynamic growth.”

The Realiste research showed that at $2,365 per sqm, the average cost per square meter property prices in Ras Al Khaimah is significantly lower among other cities with casinos, compared to a staggering $49,911 in Monaco and $15,153 in Singapore, underscoring the substantial potential for property value appreciation in the emirate, highlighting its attractiveness to potential investors.

It also projected a robust return on investments of up to 50 percent for some of the projects in Abu Dhabi’s upcoming and popular islands over the next three years, turning them among the most sought after residential property markets in 2024.

Real estate market boom to spread beyond Dubai in 2024

Abu Dhabi, and Ras Al Khaimah, along with Dubai, beckons as distinct gems for investors in 2024, Realiste said.

Abu Dhabi, epitomizing stability, offers steady organic growth and proven profitability in prime locations, while Ras Al Khaimah, propelled by a groundbreaking casino, stands out with affordable prices and a burgeoning tourism scene.

Meanwhile, Dubai will continue to lead the bull run in the UAE’s real estate market with its innovation and resilience promising substantial growth, with iconic projects showcasing sustainability, the study said.

“Together, these emirates encapsulate an opportunity, where each investment choice signifies a strategic move in the evolving landscape of Middle Eastern real estate,” Realiste said.

Investors could expect over 50% returns in short spans

Abu Dhabi, with its fast diversification with the mix of cultural and entertaining objects, besides hosting more than 100 global events, concerts or festivals annually, is projected to offer both top notch return on investments and high rental yields, luring real estate investors from around the world in the coming year.

The capital city’s high target for international tourist arrivals – its reported target for 2023 is 24 million visitors – will be a growth driver for short-term rental property also, the study said.

Q Property’s upscale projects Maskan and Makany on Reem Hills and Aldar’s Gardenia on Yas Island are among the residential projects which are projected to fetch over 50 percent return, while 9 Yards’ Sea La Vie on Yas Island is estimated to see over 30 percent investment appreciation to investors in just a three-year span.

The Gardenia and Sea La Vie projects are also projected to get over 10 percent rental yields to investors.

“[The Abu Dhabi real estate market] exhibits solid organic growth with lower speculative demand, reducing the risk of sharp declines in property values, making it a highly attractive investment destination,” said Realiste, which operates in over 100 cities around the world.

As for RAK, the Realiste study said the emirate’s real estate prices have seen considerable surge in recent months, following the announcement on the casino opening and riding on the boom in tourist arrivals, leading to an estimated over 25 percent spike in hotel room occupancy growth in 2023.

“The announcement of the first casino in the UAE has propelled Ras Al Khaimah into the spotlight, attracting substantial foreign investments and driving tourism,” the study said, adding that this could propel real estate prices, especially in areas around the casino, in the coming months and years.

Bloomberg estimates potential annual gaming revenue of $6.6 billion in RAK, surpassing even Singapore.

The Realiste research said the total transaction value in RAK’s real estate market continues its upward trajectory, nearly reaching the cumulative value of the entire previous year in the first eight months of 2023.

Dubai will continue to offer high returns to investors

The Realiste AI-based study also predicted continued high price growth in key Dubai areas such as Dubai Hills, Sobha Hartland, and Bluewaters Island, with a projected growth forecast ranging from 18.5 percent to 22.1 percent within one year.

“Dubai’s commitment to cutting-edge urban planning sets it apart. The emirate still represents the most significant earning potential for investors,” Alex Galt, CEO and founder of Realiste, told Arabian Business.

“For example, iconic projects such as the Dubai Hills development showcase a harmonious blend of sustainability, and innovation. In 3 years, property prices in the area have grown by an impressive 83 percent, and in the next 5 years, we forecast a further 43 percent growth, making it an attractive prospect for investors seeking long-term appreciation,” Galt said.

Source : ArabianBusiness

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