According to the data from Dubai Land Department (DLD), the value of residential and commercial apartment deals were at AED4.4 billion, while land purchasing transactions amounted to AED9.1 billion, while villa deals stood at AED651 million, the DLD data showed.
A number of recently issued decisions by the UAE government has increased the attractiveness of the real estate market in Dubai which explains the growing number of real estate deals.
These decisions mainly include the permanent residency system for selected expats, offering residency to foreign pensioners, the 10-year residence visa for investors, and the 100% foreign ownership of companies in the UAE.
Top neighborhoods with high transaction value for villas and residential properties include Dubai South, Al Barari, Mohammed Bin Rashid City, Palm Jumeirah and Al Barsha areas. Emaar is the leading developer with most projects that include Expo Golf Villas in Emaar South.
More insights on Dubai property transactions
Price adjustments have made the real estate market more affordable for homebuyers, and Dubai a more competitive location to live and work. But while the market remained soft over the first half of the year, the falls have been relatively modest (less than 2 per cent in the first quarter), suggesting it is close to the bottom of the cycle.
A continued increase in the volume of sales activity as an essential indicator of any recovery in the real estate market in Dubai. The DLD figures show that the market is stabilizing, with an increase in the value of transactions recorded in 2019 compared with the same period in 2018. There are some issues with interpreting the DLD data on transactions, but it appears that the vast majority of activity involves the sale of land plots, which comprise almost 60 per cent of the total value of sales in early 2019.
To sustain competitive market conditions, developers have reduced prices, also reducing size of units, and offered attractive payment plans that has resulted in a growth in the percentage of sales in the primary or off-plan market compared to existing projects.
Designing a home for its dwellers
Developers need to keep end users or home dwellers in mind (tenants or homeowners) and not just investors. One of the main obstacles for homebuyers are the running costs of owning a house, with the maintenance fee being rather steep. By simply controlling and reducing the running cost variable, we can see positive results, such as an increase in the number of first-time homebuyers.
Increasing the loan-to-value (LTV) ratio from the current 75 per cent to 85 per cent can also help. This could be limited to first-time homebuyers so banks can mitigate risks. Revising the DLD’s 4 per cent transfer charges could also encourage more transactions.
Market littered with overpriced properties don’t match buyer expectations. More sales would occur if sellers were to drop asking prices by 10-15 per cent from current levels. If not, owners should just rent their properties.
(With input from: Gulf News)