| 07 Jan 2009 |
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Robust growth in Dubai land deals
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Wednesday, Jan 07, 2009
Gulf News Dubai: The value of the total land transactions in Dubai jumped 47.5 per cent to Dh70.2 billion last year from Dh47.6 billion in 2007, according to figures from Dubai land department.
A total of 5,837 transactions were recorded in 2008, up from 3,997 transactions in 2007.
The most land activities were seen last May, with Dh11.6 billion spread over 793 transactions.
The least activity in 2008 was recorded in December with just Dh1.9 billion over 191 transaction.
However, this should come as no real surprise, given the dismal economic situation seen over the last quarter.
"I think Dubai has a very good market and will continue to grow, but it needs more time," Sultan Butti Bin Mejrin, director general of Dubai land department, said.
In terms of mortgages, 2008 was an impressive year with the total value of mortgages hitting just under Dh114 billion.
The most mortgages recorded in 2008 were in July with Dh29.4 billion worth of mortgages registered.
In 2007, the total number of mortgages recorded at the land department was Dh57.3 billion.
Chris Dommett, chief executive of mortgage firm John Charcol, said such incredible growth is related mainly to the first six months of 2008.
"Developers and real estate agents are realising that to get transactions, they have got to get financing," Dommett said.
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and TamweelTamweel previously held the majority of Dubai's mortgage market before they were placed under the umbrella of EmDevelopment BankEmDevelopment Bank.However, to increase their funds, there needs to be a combination of a government injection of cash and they should be given a licence to accept deposits.
Some developers are coming up with more relaxed payment plans which, Dommet says, can only be a good thing.
"The worst thing that could happen is if people decide to hand their properties back. Then the developers' cash-flow would be completely wrecked and they would be left with repossessed properties," Dommett added.
The year 2009 will also see a return to 85 per cent financing by the end of the first quarter as people just can't afford the down payment at a 70 per cent loan-to-value rate or lower, Dommett said.
Not all are so convinced of a brighter 2009, though.
"I seriously doubt that banks will have the liquidity to start lending to end-users or developers. Where is the cash going to come from? Transactions are going to come down and so will the availability of mortgages," said an analyst, requesting anonymity.
The most popular area in Dubai for buying property is Arabian Ranches, with 701 sales registered between January 1, 2008, and December 31, 2008.
The most expensive sale in the Ranches was valued at Dh20.2 million.
The Palm Jumeirah came in second place with a total volume of 656 sales recorded.
Emirates Hills was third with 563 properties sold.
The least popular areas were Umm Sequim and Al Raffa.
Emirates Hills saw the highest sales value with Dh380 million recorded.
In terms of land-buying, Al Ruwayyah had the most transactions with 875 total sales, Al Jadaf had 242 sales and Jebel Ali had 211 sales.
The highest land prices were in Al Khawaneej at Dh684 million.
© Gulf News 2009. All rights reserved.
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