By Sarah Townsend
Real estate analysts have claimed this year that Dubai’s apartment, villa prices are falling
The head of real estate investment at Dubai’s Land Department has dismissed reports of a property slowdown in the emirate.
Real estate analysts have claimed this year that Dubai’s residential market in particular is witnessing a slowdown, with figures from broker JLL last week showing that average apartment prices fell two per cent compared with the previous quarter and villa prices fell one per cent during the first three months of the year.
And, in February, Dubai dropped down JLL’s City Momentum List, a list of cities achieving the biggest momentum in real estate, after a slowdown in the growth of property prices.
JLL noted that developers have now completed 730 new homes across the emirate and supply is starting to catch up with demand. “The first quarter of the year continued to see subdued activity in Dubai’s real estate market,” said Craig Plumb, head of research at JLL’s Dubai office.
However, in an exclusive interview with Arabian Business, Majida Ali Rashid, assistant director-general and head of real estate investment management and promotion center at Dubai Land Department (DLD), insisted the market was maintaining “sustainable” growth.
“The real estate market has shown a clear ability to gain momentum from year to year, in addition to maintaining sustainable growth, as well as the trend towards maturity,” she said.
“This would help DLD in achieving Dubai’s mission to be a global real estate leader in attracting investments.”
Rashid pointed to DLD’s annual report published in January, which showed that the total amount of real estate transactions recorded in the emirate last year exceeded AED218 billion, across 53,871 transactions.
The same report showed last year’s transactions were diversified and were all over Dubai, demonstrating market resilience, she said.
Mortgage sales make up a healthy proportion of the total sales transactions, she added – with cash sales accounting for 51 percent of transactions, and mortgages sales accounting 44 percent.
There were 12,511 recorded mortgage transactions, exceeding AED97 billion, while remaining operations accounted for 3,227 transactions with a total value of AED10 billion.
“The report suggests sustainable growth [of the real estate market] in the years leading to the launch of Expo 2020,” Rashid said, adding: “Dubai is the ideal investment location in the Middle East, and is also competing with top investment cities in Asia and Europe.”
Current fluctuations in oil prices are only a “temporary phenomenon” she said, “as Dubai has viable components to assure the stability of the sector on the long term, regardless of the conditions of oil prices and other disorders.”For all the latest real estate news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
The market has clearly slowed down and anybody can see this by looking at the DLD's own data. The number of transactions (especially in above 5M properties) is way down and prices have fallen well from the highs achieved in the lead up to the Expo announcement in Nov 2013.
With the huge reduction in investors (because of the increased fees and the mortgage cap) and with the continued supply that is being released every month in Dubai the prices are only set to go one way - down.
Transaction volumes should pick up over time as the city grows but this last 12 months has been bad for volumes compared to last year.
Almost everybody is predicting a 10% annual drop in prices from where we currently are but I say 20-25% over the next year - let us see what happens....
Dubai not part of the same world as the rest....economic conditions and global forecasts differ for Dubai when compared to the rest of the Milkyway!
I bought a property for 475K, but was forced to put 550K, and told that " We dont want to spoil the image of dubai"
Deloitte Real Estate Predictions Dubai 2015 Residential sales prices likely to soften by 1% to 5% and stabilize thereafter
Do you mean that you had to put 550K as the buying price during the land registration process with DLD ? So your title deed mentions the value at 550 K instead of 475K ?
It is articles like this that really concern me as an investor in Dubai real estate.
As another comment noted, it is clear from DLD data that there has indeed been a slowdown. This is also apparent from first hand experiene and also reports of numerous third party observers.
The fact that DLD seem oblivious to this, as opposed to them being fully aware and closlely monitoring the situation (i.e. they are conforatble with the slowdown and hence had not changed LTV rules etc) is what really concerns me and reminds me of 2008 all over again.
We have waited 10 years for Dubai Lagoon / Avalon Residences by Schon Properties and Luxor Properties
Our payments were on time !
Where is the Land dept / RERA on this ?
I'd give up on that investment if I was you.
They even think a name change will sucker in more investors.
Compared to London:
1. UAE is in an unstable part of the world
2. UAE economy is highly dependent on oil and even the non oil GDP is indirectly dependent on oil.
3. Judicial system greatly lacking
4. Property laws constantly changing to suit big developers.
5. transparency in market lacking
6. High maintenance fees
7. high mortgage rates
8. high down payments
9. Loss of job= loss of residence visa
Currently all stars aligned against purchasing a property in the UAE, if Dubai and UAE truly want to be international cities and sustain beyond their predicted life span of another 50 years ( when oil runs out)- they need to have a broader and professional outlook
With many investment opportunities worldwide they will need to offer more stability, peace of mind to real investors, as the rogue ones are already invested here
Were you forced by Developer or DLD?