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An increasing number of investors are seizing the opportunity to own a home in Dubai now as the government has stepped in to ensure there is a balance between supply and demand in the real estate market, a new report has revealed.
Property sales recorded with the Dubai Land Department (DLD) went up to 5,051 in November 2019, hitting an 11-year high and rising by 5.8 percent from October 2019, according to Data Finder, the real estate insights and data platform under the Property Finder Group. Overall, Dubai clocked in 13,832 transactions in just three months.
According to Property Finder’s analysis, the government’s announcement in September that it would form a special committee to ensure semi-government real estate firms don’t compete with the private sector has inspired confidence in investors.
Besides, with Expo 2020, only about 10 months away and house prices still on a decline, it looks like more people are excited by the idea of snapping up a property in Dubai.
“It appears that the announcement of the committee has had a positive impact on market sentiment in the three months since September,” Property Finder said in its report.
Investors are also gaining more confidence because there have been several positive reforms announced recently, such as extended visas, streamlined processes and fee relaxations.
Other significant policy changes, such as the Central Bank waiving the 3 percent early settlement fee for mortgages, relaxing the maximum age requirement to repay mortgages and lifting the 20 per cent cap on real estate lending for banks have also improved investor sentiment.
“It is a combination of all of the above as to why sales transactions have increased this year and consumer confidence is building up in the market. This, coupled with declining prices and an excess amount of supply, has given the buyer much choice, attractive prices and incentives,” says Lynnette Abad, director of data and research, Property Finder.
There have been growing concerns that the market is saddled with an oversupply of residential and office space, and that this is one of the reasons why prices have gone south.
In early September, the government announced the formation of the Higher Real Estate Planning Committee consisting of leading government and industry officials and part of the mandate is to lower the risk of oversupply in the property market.
More commercial and residential buildings are still being built and sold in Dubai, and by the end of the year, it is estimated that a total of 20,000 apartments and 7,500 villas will change hands.
The figures, according to Asteco, represent a marked decline on previous projections, but they are still a significant volume and a notable increase from 2018, which saw the delivery of 12,000 apartments and 2,750.
(Writing by Cleofe Maceda; editing by Seban Scaria)
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