Record month as real es­tate sales in Dubai near 5,000

The National - News - - FRONT PAGE - NADA EL SAWY

Last month was a record for the most Dubai prop­erty sales since 2008 with al­most 5,000 trans­ac­tions.

There were 4,774 sales of land, res­i­den­tial and com­mer­cial prop­er­ties, real es­tate por­tal Prop­erty Finder said, us­ing Dubai Land Depart­ment sta­tis­tics. That was the high­est monthly fig­ure since Jan­uary 2008. The sec­ond-high­est vol­ume recorded was in July with 4,234 sales.

“The most im­por­tant fac­tor is pric­ing and sup­ply. There is a lot of in­ven­tory to choose from and it’s also put pres­sure on the sec­ondary mar­ket,” said Lyn­nette Abad, di­rec­tor of data and re­search at Prop­erty Finder. “Peo­ple think this is the best time to buy be­cause they feel that it’s at the bot­tom, but also some clients be­lieve that once we get closer to 2020 the prices will start ris­ing.”

Dubai prop­erty prices have been de­clin­ing due to a three-year slump in oil prices and mar­ket over­sup­ply, as well as a move by de­vel­op­ers to build­ing smaller, more af­ford­able homes. Vil­las and apart­ment prices in the first half of 2019 were about 12 per cent cheaper than they were in 2017 and 4 per cent cheaper than in the sec­ond half of last year, ac­cord­ing to Prop­erty Finder.

Other fac­tors to help spur sales re­cently in­cluded the eas­ing of an early set­tle­ment fee and age re­stric­tions on mort­gages.

But the higher sales vol­ume does not nec­es­sar­ily mean prices are set to re­bound.

“I think we are go­ing to con­tinue to see an in­crease in trans­ac­tions ... and prices will con­tinue to de­cline. I def­i­nitely don’t think we’re at the bot­tom,” Ms Abad said.

Last month set a record for the most Dubai prop­erty sales since 2008 with close to 5,000 trans­ac­tions, ac­cord­ing to Dubai Land Depart­ment sta­tis­tics compiled by real es­tate por­tal Prop­erty Finder.

There were 4,774 sales of land, res­i­den­tial and com­mer­cial prop­er­ties, ac­cord­ing to Data Finder, the real es­tate in­sights and data plat­form un­der the Prop­erty Finder Group. The sec­ond-high­est vol­ume recorded was in July with 4,234 sales.

“The most im­por­tant fac­tor is pric­ing and the amount of sup­ply. There is a lot of in­ven­tory to choose from and it’s also put pres­sure on the sec­ondary mar­ket,” Lyn­nette Abad, di­rec­tor of data and re­search at Prop­erty Finder, told The Na­tional.

“Peo­ple think this is the best time to buy be­cause they feel that it’s at the bot­tom, but also some clients be­lieve that once we get closer to 2020 the prices will start ris­ing.”

The low­est recorded monthly vol­ume yet was be­fore the global fi­nan­cial cri­sis in Jan­uary 2008 with 455 deals, the ear­li­est pub­licly avail­able DLD data.

Dubai prop­erty prices have been de­clin­ing since 2014 ow­ing to a three-year slump in oil prices and mar­ket over­sup­ply, as well as a move by de­vel­op­ers to­wards build­ing smaller, more af­ford­able homes. Vil­las and apart­ment prices in the first half of 2019 were around 12 per cent cheaper than they were in 2017 and about 4 per cent cheaper than in the sec­ond half of last year, ac­cord­ing to Prop­erty Finder.

Last month there were also high lev­els pf off-plan sales, clock­ing in 2,841 trans­ac­tions, the sec­ond-high­est since Septem­ber 2015, with 3,258 deals recorded.

“Off-plan prop­er­ties ac­count for 59 per cent of the res­i­den­tial trans­ac­tion [year] to date and are still the favourite for in­vestors due to at­trac­tive prices, pay­ment plans and fee waivers,” Ms Abad said.

In terms of dis­tricts, the high­est num­ber of trans­ac­tions was 438 for Dubai Creek Har­bour, fol­lowed by 351 for Busi­ness Bay, 329 for Dubai South and 221 each for Vil­lanova and In­ter­na­tional City. Most of the pur­chases for the top four de­vel­op­ments were off-plan.

There was more de­mand for apart­ments over vil­las and town houses, with 437 apart­ments sold at Dubai Creek Har­bour. Other pop­u­lar ar­eas for apart­ments were Busi­ness Bay, Down­town Dubai, Al Khail Heights and In­ter­na­tional City.

The top five most pop­u­lar com­mu­ni­ties for villa and town house sales were Dubai South with 297 sales, fol­lowed by Vil­lanova, Cher­ry­woods, Ara­bian Ranches 3 and Serena. In the sec­ondary mar­ket, the ar­eas with the high­est sales were Mudon with 56 trans­ac­tions, fol­lowed by Dubai Hills Es­tate and Akoya Oxy­gen.

Be­sides over­sup­ply and low prices, there are other fac­tors that have helped spur sales re­cently. On Oc­to­ber 8 the Cen­tral Bank sent out a cir­cu­lar to banks to re­move the 3 per cent early set­tle­ment fee for mort­gages in­tro­duced last year and re­vert to a 1 per cent or Dh10,000 cap as part of a series of moves aimed at eas­ing home loan rules. A max­i­mum age re­quire­ment, which stip­u­lates that loan hold­ers must be un­der 70 be­fore their last re­pay­ment is due, was also lifted.

The Cen­tral Bank has been in dis­cus­sions with the coun­try’s lenders to make the 20 per cent cap on fi­nanc­ing to the prop­erty sec­tor flex­i­ble. Mubarak Al Man­souri, the Cen­tral Bank gov­er­nor, told the Mid­dle East Bank­ing Fo­rum in Abu Dhabi that un­der the pro­posed changes, lenders would be al­lowed to ex­ceed the cap, but would in­cur a cap­i­tal charge.

“All of th­ese lit­tle things that are hap­pen­ing are cre­at­ing the dy­namic in the mar­ket and build­ing up con­sumer con­fi­dence,” Ms Abad said.

The time of year also plays a role, with peo­ple who re­cently moved to Dubai now look­ing to buy prop­erty and oth­ers want­ing to make their pur­chases be­fore the win­ter hol­i­days, she added.

“It’s go­ing to be in­ter­est­ing to see how the next six months fare,” Ms Abad said. “I think we are go­ing to con­tinue to see an in­crease in trans­ac­tions just be­cause of the amount of sup­ply and the prices will con­tinue to de­cline. I def­i­nitely don’t think we’re at the bot­tom.”

Lyn­nette Abad, di­rec­tor of re­search at Prop­erty Finder

Newspapers in English

Newspapers from UAE

© PressReader. All rights reserved.