The government real estate data revealed that Dubai recorded less than 1700 real estate deals during the first ten months of 2011, which marks a 70percent decline on sales in the emirate's housing market, in comparison to its peak period during mid-2008.
The data from Dubai Land Department (DLD) showed that nearly 1603 deals with signed during the initial ten months, in comparison to 5,363 deals signed during the same period in 2008.
However, in comparison to the 2009 figures, when the financial crisis was at its peak, the figures reflect 37percent increase, which indicates sign of recovery of housing market in Dubai.
The average monthly real estate sales has increased to 160 from 117 in 2009, but is still quite far behind from the average of 536 property transactions recorded during a month in 2008.
According to Ryan Mahoney, the CEO of Better Homes, the largest real estate firm in Dubai, the market seemed extraordinary during 2005-08, and is now regular.
The CEO of Landmark Properties, Charles Neil, said that rise in sales is attributed to increase in bank lending and increased number of Chinese and Indian investors entering the market.
The real estate prices in Dubai soared when Dubai opened its property market to foreign investors in 2002, and granted them, rights to freehold ownership at several developments. During the period 2007-08, the prices grew 80 percent, with several billion dollars worth of new projects being launched.
However, the prices of houses in Dubai saw the biggest reversal owing to financial crisis, when it fell more than 60percent due to global economic crisis. Thereafter, recovery in housing prices was noticed in the third quarter, wherein, prime projects in Palm Jumeirah and Arabian Ranches saw slight increase.
However, analysts are still concerned, as at least 33,000 new homes will enter Dubai market by end of 2012, and they can cause fresh declines in sale and rentals. Further, renewed global financial woes, coupled with European sovereign debt crisis may be a cause of concern. The Moody’s had last month predicted that any price recovery may be unlikely until 2016.