Tuesday, June 29, 2010

Dubai property sector records growth in transactions

The real estate market in Dubai has recorded growth in number of transactions, in comparison to the same period last year, the Dubai Land Department report said.

The first five months of the year registered 3,642 land sales, worth a total of Dh.25bn. The sales comprised a total area of 62,815 square feet, the department said.

The website Reidin.com said that there were 4,961 residential sales transactions in 2009. The Land Department figures also revealed that during the first five months of the year, 3750 mortgages were registered worth Dh.32bn.

The Assistant Director-General of the department, Mohammad Sultan Thani said that although the value is lesser, there are several transactions on a daily basis, compared to last year. The sale of residential properties figured 3,169 from January until May this year, with 10 percent or more of these transactions mortgaged. Apartments represented 2,927 of these transactions, of which, about 10percent were mortgaged.

There are more transactions than last year, with the numbers showing a bottoming out of the market, and a flat trend.

Real estate industry experts said that while the transactions may be higher, the prices were not. The average price in 2009 was Dh.870.4 per square foot, while for this year it is Dh.816. According to CEO of reidin.com, Ahmet Kayhan, the prices at present have gone back to the levels of third quarter of 2007, with villas leading those of apartments.

The occupier owners now prefer villas over apartments, and the fact that villas are pulling ahead of apartments is a healthy sign. They are expecting to make money, selling whole buildings, but, are focusing on sale and purchase of affordable smaller apartments.

The residents in Dubai are also taking advantage of the falling rentals, property experts mentioned.

The June leasing guide by Landmark Advisory said that rents had dropped in lower and better quality apartments.

The Director of Research at Landmark Advisory, Jesse Downs, said that tenants are seeking more value for their rental dirham and are able to arrive at alternative options to negotiate attractive deals. This is a trend now, mostly seen in high quality units in prestigious locations.

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