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Nakheel Invests AED 201 Million To Ease International City Congestion

The first phase of a comprehensive road development scheme has been completed at Dubai International City, easing access to an area that suffers from rush hour congestion.

The AED 400mn project is led by Dubai’s Roads & Transport Authority (RTA) with Nakheel, the area’s master developer, contributing AED 201mn.

According to Nakheel, new roads will improve traffic flow, reduce journey times and boost safety.

The scheme includes road widening, new interchanges and signalised junctions in and around Dragon City, International City and Warsan Village, where more than 110,000 people live and around 200,000 visit each day.

“This project is essential to the overall, long term master plan at International City, bringing major benefits to existing residents, business owners and visitors in the short term, and paving the way for the future growth of the area,” said Nakheel Chairman, Ali Rashid Lootah.

Traffic studies by Nakheel show that more than 182,000 vehicles currently move in and out of the area every day – a figure which is set to grow as expansions at International City and Dragon Mart continue.

Nakheel is also exploring further traffic enhancement schemes – such as increased parking – within International City.

The area has recently suffered sharp declines in rental values as renters seek out better deals in more sought after areas.

According to Chestertons’ Q2 Observer report, rents in International City fell 7% quarter on quarter in Q2.

Improving access and increasing parking space could be one way of making the area more attractive to renters.

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Residential Buyers In Dubai Preferred Off-Plan Properties Last Year

In Dubai, the majority of new residential sales made in 2017 were for off-plan properties.

That’s according to the latest Year In Review report from JLL, which said that 25,600 off-plan properties were sold in Dubai last year. That’s the highest level of off-plan growth that the emirate has since 2009.

Only this time, JLL said that off-plan property sales were being driven by developers offering attractive prices and payment plans. What’s more, there are better consumer protections around off-plan property than there were in 2009, meaning greater investor confidence in new-build projects.

Indeed, JLL said that recent activity in the market suggested a renewed confidence among both investors and developers.

Still, that confidence is measured. When it comes to getting any yield out of those investments, JLL said that the market should prepare for another subdued year. The consultancy noted that, with supply growth still outpacing demand, occupancy levels in Dubai would hover around the same levels as in 2017.

JLL warned that, for the moment, lower levels of growth should be considered as “the new normal”.

By the end of 2017, JLL estimated that residential stock in Dubai amounted to 491,000 units, with 80% of them being apartments.

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Dubai Property Prices Won’t Rise Until 2020

According to a new report from Standard & Poor’s, those looking to buy property in Dubai will have plenty of time to take advantage of relatively low market prices.

The ratings agency’s latest report says that the “correction” in real estate prices that Dubai has seen over the last couple of years will continue until 2020 at the earliest. The reasons for the price downturn, S&P said, were to do with low oil prices, the introduction of VAT, and a glut in new housing units.

Naturally, this is good news for first-time investors, or property buyers with the capital to purchase a slew of new units. However, as has been the case with property prices, rental yields have also softened over the past couple of years, with landlords having to take extra precautions to attract and retain tenants.

Still, with home prices now 15% lower in mid-2017 than they were in 2014, new investors will certainly be interested in snapping up some property in Dubai. In fact, S&P estimates that prices for some residential units may have slid by up to 10% further since mid-2017.

As to when prices are expected to rebound, the S&P report said that 2020 would be the earliest that property prices pick up.

“We believe this correction will continue at least for this year and next, before prices stabilise in 2020 at the earliest,” the report said.

However, the ratings agency added that, when 2020 comes around, and Dubai hosts the World Expo, there may be a bounce back in terms of property prices.

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Dubai Property Prices Are Down 2% Year On Year

The average selling price of a residential property in Dubai fell 2% year on year for the first quarter of 2018. That’s according to research by chartered surveyor and property consultant, Cavendish Maxwell.

The report noted that villas and townhouses traded at an average of around AED 2.7 million and apartment transactions averaged AED 1.2 million.

While prices declined across Dubai, there were variations between areas and types of property.

“Price movement in the last 12 months has varied not only between communities but also among different buildings within the same community, thus reflecting greater differentiation in how available properties are now trading,” the report noted.

“This differentiation is expected to continue as buyers have an increasing supply base to choose from and property fundamentals such as developer track record, proximity to social and public infrastructure, ease of access, maintenance, among other factors will drive price movement.”

The steepest declines in apartment prices were seen in JBR (-2.5%), while the biggest fall in villas/townhouses was in Jumeirah Islands (-3.0%).

Approximately 3,800 residential units were handed over across Dubai in Q1 2018, with more than 92% of the units being apartments. International City, Jumeirah Village Circle and Dubai Studio City each accounted for more than 250 handovers.

You can download a full copy of the report here.

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Real Estate Roundup!

May new home sales gain 2.2% from April

Sales of new single-family houses in May 2015 were at a seasonally adjusted annual rate of 546,000, which is up 2.2% from April, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. — From Housing Wire

3 ways to tame student loan debt and afford a mortgage

It’s no secret that student loans can make buying a home a challenge. But what exactly is the problem, and how can buyers overcome it? The problem is that student loans can be included in the buyer’s debt-to-income ratio, or DTI. — From Bankrate

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