Dubai property prices to up to 40% this year - land dept boss

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Dubai property prices could rise by as much as 40 percent this year, according to the head of the emirate’s Land Department.

Sultan Bin Mejren said in an interview with Bloomberg that the department planned to introduce new rules to control speculation on properties sold before they were built in response to property prices increasing more than 30 percent in 2013.

He said the real estate authority planned to complete a review of off-plan transactions in the first quarter and may introduce new regulations in the second or third quarter, Bloomberg reported.

Bin Mejren also said home prices this year may rise 35 percent to 40 percent.

“Transactions on off-plan properties are a little dangerous,” he said. “We are now studying them and looking at ways to ensure that they don’t hurt the market.”

Bin Mejren said the Land Department was also planning regulations to limit rent increases when tenants change.

While caps exit on increases for existing occupiers, Dubai currently had no controls on increases for new tenants.

“We are studying laws for residential and commercial properties and each will have its own guidelines,” Bin Mejren told Bloomberg.

“We expect to have them prepared in either June or the third quarter. There has to be some regulation for new contracts in order to have stable rental increases.”

The Land Department last week said it was updating its rental price index, which determined caps on increases depending on the type and location of the property.

Last year the department raised the transaction fee to 4 percent from 2 percent and the UAE Central Bank imposed restrictions on the value of mortgages made available to foreign buyers in a bid to cool the market.

Bin Mejren said in relation to Expo 2020: “Don’t look at buying property as though you’re buying shares on the stock market,”. “If you buy a property here, hold on to it, because by 2020 the city will be entirely different from what it’s today.”

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Posted by: sad

Dear Dubai . i started working 20 years and saving my earnings to make a better future for my children . I wanted to move to some country where i can have my own space . You sold the concept that you can be a landlord one day and not pay rent, you will make rent . I trusted your developers whom you had sold your land too. ( Yes Escrow accounts and project approved ) they cheated me and so many more . The construction on those projects has not moved . I lost all of my earnings and had to take a loan to start my life again . Nothing is happening on Al attar sky scraper project . I have paid 50% since 2006 . ACI another scam why is not the land in Business bay being sorted out and a new project coming in . We trusted you , went to RERA and now you say buy again . I am so warry about the new hype and wish no other bubble takes place . Pls do something let those projects get completed . Ask your govt help us . We still trust your vision and believe in your land's growth

Posted by: Paolo C

Where is my money DUBAI? An investor. An advice! Keep away from this region.

Posted by: jamal Nasser

Mr Bubble- Emerging markets will always have the most volatility in their stock markets and real estate markets.
That is why there is potential to make money and loose money.
If you are a gambler you will enter this market as an investor and perhaps make some money too or loose big time.

All mature markets of today (NY, London) have gone through a similar phase that Dubai is currently going through.

On the other hand if you are looking for stability and a safe place , risk free to park your funds try the US Real Estate market, where you will get 2-3% return on your investment

Posted by: Mr Bubble

You are indeed correct Mr Nasser, but UAE have (so far anyway) not taken the enough steps to regulate the market in order to avoid a cyclical boom-bust scenario despite talking a good game.

The steps they have taken are a good start (increased transaction fees mainly), but I am still waiting for introduction of regulations that would reassure investors of the longevity of their investments in UAE, and also make it possible for the mere mortals to survive as renters in the open market.

US as a whole is definitely not risk free by the way. Central London probably is, but then again the entry price is high...

Posted by: Jessica Samuel

Mr Sultan Butti Merjan

What about people who have invested in 2007 off plan projects . Dubai lagoon by Schon Properties

How are you protecting previous off - plan buyers ??

Posted by: SA1

Himself giving speculative statement....then also coming up with laws to protect the sector from speculation.?

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