Dubai should consider stronger measures to dampen
what could be speculative real estate transactions in the emirate, a senior
International Monetary Fund (IMF) official said on Tuesday, in the global
body's latest warning of a potential property bubble.
Growth in the Gulf emirate, the region's trade and
business hub, picked up strongly last year, buoyed by the prospect of
government real estate projects worth tens of billions of dollars following a
property market crash in 2008-2010.
Masood Ahmed, director of the IMF's Middle East and
Central Asia department, said the Fund had welcomed moves taken by Dubai's
government and central bank last autumn to cool what could become a
"speculative increase" but said more was needed.
Dubai, one of seven United Arab Emirates, announced
last September it would double a registration fee charged on real estate
transactions to 4 percent to prevent excessive speculation.
"Our own view is that these measures are good
... but it's time to consider stronger measures," Ahmed said in a
presentation on the regional economic outlook.
Dubai's economy is expected to grow by around 5
percent this year, a similar pace to 2013, the head of its statistics office
said on Monday.
Dubai accounts for a quarter of the total output of
the UAE's economy. Oil-powered Abu Dhabi is responsible for around 65 percent
of the federation's output.
The UAE, one of the world's top oil exporters, has
yet to release 2013 GDP data. Analysts polled by Reuters in January expected
4.3 percent growth in both 2013 and 2014.
Dubai's tourist numbers rose 10 percent to 11
million people in 2013 and new trade licences recorded an increase of 12
percent. Real estate transactions jumped 53 percent to above AED236bn ($64.3bn).
Selling prices for residential property rose by
about a third from a year ago in the first quarter of 2014, prompting an IMF
warning of a possible real estate bubble.
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