Dubai witnessed significant increase in real estate transactions and investments in the first five months of 2019 with more than half - 57 per cent - of the fresh investments coming from new investors, official figures showed on Tuesday. The latest data reflects that the emirate's real estate is on course to surpass last year's investments and property deals. Total value of real estate transactions in the emirate grew 12 per cent to Dh106 billion compared to Dh95 billion in 2018, the Dubai Land Department said in its annual report. During the January-May 2019 period, 48 new projects were launched ranging between residential apartments, villas, and villa complexes which will add 8,000 new residential units, Dubai Land Department said in its 2018 annual report released on Tuesday. In terms of real estate project growth, the first five months of 2019 witnessed the launch of 48 new real estate projects, which are expected to represent a new addition to the real estate sector. These projects ranged between residential apartments, villas, and villa complexes. In 2018, around 53,000 transactions worth Dh223 billion were signed with overall investments recording Dh80 billion through more than 41,000 investments by over 31,000 investors from around the world. Despite a decline in property prices, the sector's contribution doubled to 13.6 per cent in 2018 from 6.9 per cent in the previous year. Sultan Butti bin Mejren, director-general of DLD, said that though the real estate sector reflects the development achieved by the emirate across all fields, it does not come without its challenges. "On the one hand, we have to continue this momentum, which has been achieved through promotional initiatives at the local and global levels through our exhibitions in prominent Arab and international capitals. On the other hand, we should ensure transparent communication and openness to all investors and other parties in this sector," he said. Aditi Hariharan, associate partner for strategic consulting and research at Cavendish Maxwell, said that new supply exerted further downside pressure on prices and rents, with prices experiencing a sharper decline than rents. "In our Q2 2019 report, we had estimated that 10,000-13,000 units would be handed over in Dubai in H2 2019, based on previous years' materialisation rates of 40-50 per cent of under-construction projects as of June 2019," Hariharan said. Whilst upcoming supply is likely to keep prices and rents under pressure in the months to come, Hariharan said that recent initiatives like the creation of a new committee will ensure that excess supply, and thereby price declines, are curbed. Lynnette Abad, director of data and research at Property Finder, said that 30,000 units were completed last year which was a significant increase from the last few years. "The amount of new supply has brought a plethora of choices for buyers and renters and also caused prices to decline this year to more affordable levels. Leading up to 2020, we will need an abundance of supply to accommodate the expected 25 million visitors, therefore, the number of additional completed units this year will assist with that demand," Abad said. Nick Grassick, managing director of PH Real Estate, said that the emirate is becoming much more transparent in the reporting of projected and achieved development deliverables; as such the gradual softening of property values has already been factored into the release of new homes. "It's widely recognised and reported that home values, both capital and rental, have continued to contract. No one is anticipating a sudden change shift, positive or negative, from current property values - and this is indicative of a mature property market. The fact we recognise the market has matured, and limited price fluctuations can be expected, is a positive which offers (albeit limited) reassurance to investors," said Grassick. UAE citizens ranked first with investments worth over Dh10 billion followed by Indian investors with Dh8 billion investments during 2018. New investors represent 66 per cent of the total number of investors in 2018. In terms of value the investments, new investors represent 57 per cent of the total value of the investment in 2018. The Business Bay area ranked first in terms of the number of real estate transactions with over 4,000 transactions worth over Dh11 billion. The number of new projects launched in 2018 was 84, comprising 20,000 units across villas, buildings, and land plots. As for the demand, which is expressed by both sales and rents, the report indicates that sales represented the largest percentage of real estate transactions, with more than 63 per cent of the total number of transactions in 2018, with the recorded sales reaching over Dh74 billion in 2018. Copyright © 2019 Khaleej Times. All Rights Reserved. Provided by SyndiGate Media Inc. (Syndigate.info). Disclaimer: The content of this article is syndicated or provided to this website from an external third party provider. We are not responsible for, and do not control, such external websites, entities, applications or media publishers. The body of the text is provided on an “as is” and “as available” basis and has not been edited in any way. Neither we nor our affiliates guarantee the accuracy of or endorse the views or opinions expressed in this article. Read our full disclaimer policy here.
