Fund managers are pinning hopes on a turnaround in the UAE's property sector this year.
Property prices have plunged by more than 60 per cent in some areas since their peak in early 2008 as speculative demand waned and banks tightened lending after the global financial crisis.
But investors think the Arab Spring and an improvement in contractor receivables and surprise dividend payments have signalled a new page for the industry.
Political turmoil in Bahrain, Egypt, Libya, Tunisia and Yemen triggered money flows into the UAE and "helped stabilise some high-end residential segments of the market", said Fadi Al Said, a senior fund manager at ING Investment Management in Dubai.
Heightened US sanctions on Iran has also spurred an increase in property transactions as Iranians began looking for a safe place to invest their savings.
Contractors have had notable "breathing space" after money owed by clients dropped by just over 7 per cent from the start of last year, allowing companies to focus on markets, such as Saudi Arabia, that are going through an expansive building trend.
Dubai's biggest contractor, Arabtec Holding, which has operations in the kingdom, has almost doubled in price this year, amid speculation of high-value infrastructure awards.
Arabtec has surged from Dh1.50 at the start of the year to Dh2.93 yesterday on the Dubai bourse.
Property stocks have also risen considerably after companies announced strong dividends for last year. Developers in Abu Dhabi have offered cash payouts equivalent to a 5 per cent yield, boosting investor sentiment.
"People weren't expecting any payouts from the sector at all," said Marwan Shurrab, the chief trader at Gulfmena Investments in Dubai. "We are expecting companies to continue beating their results, quarter on quarter, underpinned by recurring revenue as the economy gets back on its feet."
In Abu Dhabi, Aldar Properties has jumped 16.3 per cent since January 2 to trade at Dh1.07. Sorouh Real Estate has risen 30.5 per cent to Dh1.11. RAK Propertiesrose 34.8 per cent to 39 fils.
In Dubai, Emaar Properties has surged 19.4 per cent to Dh3.07 since the start of the year. Deyaar Development has risen 53.2 per cent to 33 fils. Union Properties has advanced 52.3 per cent to 39 fils.
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