Dubai's housing market could be running ahead of reality as the number of deals fell by almost a quarter during the first three months of the year, the top property broker CBRE warned.
The consultancy's caution caps a month marked by the return of speculators to a housing market that is being fuelled by overseas cash buyers.
"There is a modicum of concern that the recent escalation of sales and leasing rates could actually be a little ahead of reality," the report said.
Despite rising prices across most of the market, CBRE notes that sales numbers actually fell quarter on quarter during the first three months of the year.
The number of transactions dropped 24 per cent, while their value fell 17 per cent. That appears to contrast sharply with data released from the Dubai Land Department over the weekend which reported a 63 per cent growth in the value of the transactions over a year.
However, the Land Department data did not reflect quarter on quarter changes.
The release cited Sultan bin Mejren, the director general of the Land Department predicting that "investors would be encouraged to increase their spending in Dubai".
The CBRE figures may give pause to investors hoping to surf a tide of incoming money into Dubai property that has been boosted by political instability and conflict in some other Middle East countries such as Egypt and Syria.
Dubai's property market has staged a dramatic comeback over the last year after prices fell by more than half in the wake of the 2008-2009 financial crisis.
But the return of queues outside developers' sales launches in recent months has triggered concerns that values have been rising too fast and drawn comparisons to 2008 when house prices recorded double digit gains from quarter to quarter.
Police were called to the sales office of Emaar Properties this month after the launch of its Mira townhouses development was mobbed by buyers, some of whom had queued for days.
Some of the units were being advertised for sale the following day on the dubizzle website with premiums of more than 30 per cent.
The developer reverted to an online system of registration for its next sales launch after an investor backlash.
CBRE said that established residential locations, such as Dubai Marina, Emirates Living, Palm Jumeirah and Downtown Dubai, dominated sales during the first three months of the year.
The highest number of transactions were registered in Dubai Marina, with sales comprising 25 per cent of the total share.
The city's established locations remain popular with expatriates, the report said.
Two-bedroom units in such locations command rents 27 per cent higher than a year earlier on average, with the biggest jump recorded in The Greens, where rents are 40 per cent higher than a year ago.
scronin@thenational.ae
Who's who in Yemen conflict
Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government
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David Haye record
Total fights: 32
Wins: 28
Wins by KO: 26
Losses: 4
Labour dispute
The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.
- Abdullah Ishnaneh, Partner, BSA Law
Tips to keep your car cool
- Place a sun reflector in your windshield when not driving
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Company name: Farmin
Date started: March 2019
Founder: Dr Ali Al Hammadi
Based: Abu Dhabi
Sector: AgriTech
Initial investment: None to date
Partners/Incubators: UAE Space Agency/Krypto Labs
PROFILE OF INVYGO
Started: 2018
Founders: Eslam Hussein and Pulkit Ganjoo
Based: Dubai
Sector: Transport
Size: 9 employees
Investment: $1,275,000
Investors: Class 5 Global, Equitrust, Gulf Islamic Investments, Kairos K50 and William Zeqiri
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1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
The bio
Job: Coder, website designer and chief executive, Trinet solutions
School: Year 8 pupil at Elite English School in Abu Hail, Deira
Role Models: Mark Zuckerberg and Elon Musk
Dream City: San Francisco
Hometown: Dubai
City of birth: Thiruvilla, Kerala
