Record-breaking July for Dubai real estate

by admin on September 24, 2013

in Property

Recovery of the Dubai property market has been striking and makes it a great time to invest in the dynamic market

Dubai’s real estate industry achieved the highest number of unit sales and corresponding total unit value for any July on record, according to data from the Dubai Land Department.

With 1,767 transactions, the industry saw over 193,629 sq m (2.084 million sq ft) of property units sold during the month.

The top-performing areas were Dubai Marina, Downtown and Jumeirah Lake Towers (JLT) where the combined value of the transactions accounted for about 67 per cent of the total value of unit transactions during the month.

Vibrant industry

“The recovery is certainly with us,” said Mohanad Alwadiya, managing director of Harbor Real Estate in Dubai. “Confidence is returning to the market and, when considering the latest reports regarding healthy profits and renewed activity by several leading developers, the industry is certainly looking vibrant again.”

A recent report from property management company Asteco, also said that the real estate market was showing great positive growth. The report said the rise in property values was driven by expats, who were ploughing a lot of investment into the UAE.

“After three years of declining rates and limited sales activity, the real estate market is on the way to recovery, with established quality communities showing increases in values and higher transaction volumes,” said Elaine Jones, CEO at Asteco who provided the data for the report.

More rises expected

As the year progresses, sales prices will continue to rise for quality developments, according to Asteco. Elaine Jones said that “the number of owner-occupiers rose steadily in line with improved financed options offered by banks, which we expect to continue”, with potential for further demand “from overseas buyers escaping economic woes in the Eurozone and political instability in other parts of the region”.

Arab Spring effect

This increase in profits and real estate prices are due to a number of factors, including dynamic economic growth, driven by sectors such as aviation, retail, hospitality, tourism and foreign trade. The Arab Spring has also seen a rise in the number of new residents, especially businesses and wealthy investors, who are snapping up property so they can provide a safe home for their families.

In addition, mortgage deals are at an all-time low, with banks like HSBC setting rates at 3.99 per cent. Even during the property boom in 2008 rates didn’t fall below 7 per cent.

With rents increasing by 10-15 per cent since the start of this year, the case for buying property is strong, which should spark interest in the many new hotel developments, such as The First Group’s two luxury hotel apartment projects in Tecom, Metro Central and Grand Central, which are situated in the bustling business district of Tecom in the heart of “New Dubai”. The luxury end of the market did particularly well in 2011, soaring 17.6 per cent.

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