Real estate confidence, that rarest of commodities these days, is set to return both to the United States and the United Arab Emirates if several positive reports published recently are anything to go by.
Yes, drip, drip it may be at the moment, for sure, but the signs of buoyant times ahead in the housing markets of both countries are becoming clearer with each passing month.
There’s no getting away from it but the title of the first report, “Immigrant Contributions to Housing Demand in the United States: A Comparison of Recent Decades and Projections to 2020 for the States and Nation”, is a bit of a mouthful. But the report, sponsored by the Mortgage Bankers Association (MBA) and prepared by researchers at the University of Southern California School of Policy, Planning, and Development, suggests immigrant demand will fuel housing growth over the next few years.
Referring to the report, the MBA says home ownership and rental demand of foreign-born households will continue to increase as growing numbers of immigrants settle longer in the United States.
The volume of growth in foreign-born home owners has increased each decade, according to key findings in the report, rising from 0.8 million added immigrant home owners in the United States during 1980-1990, to 2.1 million added in 1990-2000, to 2.4 million added in 2000-2010, and is projected to rise further to 2.8 million in growth in the current decade, 2010-2020.
Foreign-born ownership demand comprised the majority of all growth in home ownership in the established gateway states of California and New York. From 2000-2010 immigrants accounted for 82.2% and 65.1%, respectively, of the growth in home owners in those states. In that decade immigrants also accounted for the major share of net growth in owner households in Illinois, New Jersey, Pennsylvania, Massachusetts, Ohio and Michigan.
Now over to the United Arab Emirates, and Dubai in particular, where a sophisticated banking sector has been highly proactive in recent years in growing its range of financial offerings, including mortgages, home loans, personal loans and credit cards.
A report by global real estate services firm Jones Lang LaSalle, “Dubai Real Estate Market Overview Q4 2012″, suggests the Dubai economy has seen signs of solid recovery, supported by the strong performance of the tourism, commerce, retail, hospitality and logistics sectors. Political stability, world class infrastructure and high quality of life have contributed to the growth.
The real estate investment market, says the report, has remained quiet over the fourth quarter of the year with no major open market commercial transaction recorded. Despite the lack of transactions, investment sentiment in Dubai is improving.
The report continues, “The overall residential market has recorded a positive year, with the villa market continuing to outperform the apartment sector. Prime projects in well-established locations continue to see improved performance, but secondary locations are still suffering from rental and pricing declines as tenants relocate to new high quality projects.”
Prime rents for office space in the central business district remained unchanged in Q4, the report adds, while secondary rents continued to face downward pressure. Demand remains strong for retail space in the best performing super-regional malls, such as Dubai Mall and Mall of the Emirates. The hotel sector has performed well throughout 2012, supported by strong tourist arrivals and the opening of a number of branded hotel chains.