24 March, 2016

Dubai realty deals soar to Dh1.4b in a day

Registered real estate transactions in Dubai soared to AED1.472 billion from 170 deals on Thursday, indicating that investor momentum is starting to build up again.

Thursday, Mar 24, 2016

Dubai: Registered real estate transactions in Dubai soared to Dh1.472 billion from 170 deals on Thursday, in another indication that investor momentum is starting to build up again in the sector. This is one of the largest daily transactions registered with the Dubai Land Department in the recent past.

Monday’s transaction levels were above Dh600 million, while the following two days saw values of Dh270 million plus each. Thus Thursday’s volumes of Dh1.4 billion are certainly not par for the course.

Details are not available as to the split between freehold and non-freehold related registrations for the March 24 tally. But in recent weeks all of Dubai’s prime freehold clusters have been seeing an improvement in sales activity. In those locations where a gain is yet to be seen, the pace of decline in buying has started to stabilise.

According to Land Department data, the first two months saw transactions (freehold and non-freehold) valued at Dh68.5 billion.

“Sentiments are slowly turning around by way of snapping up “below market” deals as well as end users looking to capitalise on current conditions,” said Sameer Lakhani, Managing Director at Global Capital Partners. “It is the nature of the turnaround that will be debated in the coming months — but what we are seeing is a clear bottoming out process underway.”

If that is the case, those investors buying now do not foresee a further softening in freehold property values. More could be joining their ranks the moment they perceive price stability has again come into Dubai real estate.

According to Gibran Y. Bham, Co-founder of Lookup.ae, “Buyers/investors currently looking to purchase are seeking value. Almost the entirety of ready, mature communities are end-user driven and therefore the number of distress/value offerings is extremely limited.

“Sellers listing their properties are finding it difficult to move properties at perceived market prices. We’re seeing sellers revise prices downwards to attract buyers who are now patient and intent on obtaining the best possible price points.

“The current correction has brought prices back to just before pre-winning Expo 2020 levels.”

Transactions were also driven by developers getting their sales campaigns into overdrive. Recent launches by some of the biggest names were backed up quite generous payment plans that included a major portion of the instalments coming after the handover and spread over two years or more.

According to industry sources, the gains in transactions could have got even better if banks were to shed their inhibitions over lending mortgage support.

By Manoj Nair Associate Editor

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