Dubai property deals surge to Dh60bn in first quarter

Transactions surge 38 per cent with Land Department chief forecasting continued growth this year.

For sale signboard outside the villas in Al Furjan area near Discovery Gardens in Dubai. Land sales have risen in the first quarter of 2014. Pawan Singh / The National
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Dubai property deals surged by 38 per cent to top Dh61 billion in the first quarter.

The Land Department yesterday announced that the number of transactions for the quarter grew to 15,694, an 11 per cent increase on the first quarter of 2013.

The growth in the number of transactions and their value is only set to increase during the rest of the year, according to Sultan Butti Bin Mejren, the Land Department’s director general.

“The results of the first quarter 2014 reflect the renewed investor confidence in Dubai and specifically in the city’s real estate sector, which is considered an integral component of the national economy,” said Mr Bin Mejren.

“We expect the next three quarters to be similarly as active, especially as this period follows the launch of a number of stimulating economic projects in Dubai and the disclosure of some of the preparations for the city’s hosting of Expo 2020.”

Asteco last week reported that sale prices for homes in Dubai rose significantly over the quarter, with apartment prices up by 3 per cent and villa prices up 6 per cent compared with the final three months of 2013.

But some analysts have warned that the rapid appreciation of prices over the last year are unsustainable in the long term.

Such fears may be unfounded in the short term at least, with the supply of new residential units trailing behind market demand, according to Matthew Green, the head of research and consultancy at CBRE in Dubai.

"Prices and rents are getting much more expensive, but the fundamentals of the market are still strong," said Mr Green. "The supply of new units coming through in the market in the next couple of years is not sufficient to have a dampening effect on prices. In 2008 the supply pipeline was much bigger, and we haven't got near to that point yet."

As many as 38,000 residential units are forecast to be released between now and 2016, although some of the proposed projects are likely to face delays beyond that, according to JLL.

Dubai’s government last year introduced new restrictions on “flipping” properties, as well as more stringent mortgage regulations, in an attempt to prevent the real estate sector from overheating as it did in 2008.

The Government is likely to continue to closely monitor the market, said Mr Green, as sustained increases in prices and rents are likely to damage Dubai's competitiveness in the longer term.

Hibiya 3, Dubai Marina and Al Thenaya Al Rabe’a were the most attractive areas for selling land, buildings and residential units during the first quarter of the year, according to the Land Department. Al Thenaya Al Khamesa was in top place for land mortgages and Thenaya Al Rabe’a placed highest for building mortgages.

Land transactions for the quarter consisted of 11,567 sales activities worth a total of Dh31.5bn, together with 3,482 mortgage transactions worth more than Dh28bn, according to the department.

Other categories of transactions accounted for Dh1.7bn from 636 transactions, making the total value of transactions in all categories more than Dh61bn.

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