Dubai’s real estate sector slowed in the first half of this year with deals transacted falling 16 per cent year-on-year in value, according to a report from the Dubai Land Department.
The total value of real estate transactions fell to Dh111 billion in the first half of 2018, the DLD said in a report on Saturday, without giving the comparative figures for the corresponding period last year. A statement released by the government body in July last year noted that realty transaction worth Dh132bn were recorded in the first six months of 2017.
Sultan bin Mejren, director general of DLD said strategic government decisions announced this year “have had a significant impact on sustainable growth and on strengthening the competitiveness of the national economy”.
“Granting investors a UAE residency visa for up to 10 years and reducing government fees included in previous initiatives will be of the most important incentives for economic growth in the Emirate, as they will have a positive impact on reducing business costs and will support Dubai's position as one of the best investment destinations in the world," said Mr bin Mejren.
In May, the UAE announced a 10-year UAE expat residency for professionals and 100 per cent foreign ownership of businesses outside as well as inside the free zones. Prominent UAE real estate developers, including Nakheel and Danube Properties, praised the new rules, saying they would stimulate the nation's owner-occupier market, as more residents seek longer term housing by purchasing their homes.
The new rules were among a raft of measures announced this year to ease business processes and procedures in the UAE.
Mr bin Mejren said: “The 4 per cent penalty that property owners incurred for failing to register their developments within 60 days has been waived. This underpins the Government’s efforts to provide the best possible services to investors and developers alike.”
The total number of transactions fell by 22 per cent to 27,642, from 35,571 sales in the year-earlier period.
Business Bay was the top pick in terms of the number and value of transactions with 1,934 deals worth almost Dh4.2bn, followed by Dubai Marina with 1,445 transactions worth Dh2.9bn while Al Merkadh took the third spot with 1,262 deals valued at Dh2.1bn, according to the comparison of the two DLD statements.
The total value of new mortgages fell 3.9 per cent to Dh57.6bn from Dh60bn in the same period last year. The total sales transacted without a mortgage fell 36.5 per cent to Dh40bn from Dh63bn a year earlier, the comparison showed.
Emiratis ranked first in terms of the size of investments - with 2,986 deals worth Dh6.8bn - followed by investors from India and Saudi Arabia.
Prices have continued to slip in 2018 as a “cascade” of new stock shifted demand away from traditionally sought-after areas such as Downtown and Dubai Marina, and delayed sales price recovery according to property consultancy Core Savills’ first-quarter market update. Published in May, the report found that the year-on-year sales prices fell in those two areas by 7.5 per cent and 6.6 per cent, respectively, in the first three months.
Earlier this month, the real estate portal Bayut.com's first half 2018 market report found that the cost of renting and buying had decreased since the second half of last year. The company expected this to spur an increase in investing.
Haider Ali Khan, chief executive of Bayut, said: "As we move into the later half of the year, we expect the prices to hover around where they are right now and for the serious parties, there will be great opportunities to invest at good price points.
"I believe we may see more first-time buyers coming into the market, people who traditionally would have just rented a different place might consider buying given the lower prices," he said earlier this month.