Dubai growth 'sustainable'
Recent regulatory measures introduced to help sustain and regulate Dubai's property market are already starting to take effect, with a recent cooling in the rate of growth, positioning the market towards a more sustainable pace of growth.
According to research by international real estate consultancy Cluttons, the steps announced by the UAE Central Bank in October to set limits on the size of mortgage loans for housing along with the Dubai Land Department's recent doubling of property registration fees are already impacting the volume of deals being recorded in Dubai. The firm said it is still too early to assess whether the regulations will succeed in curtailing growth at levels perceived to be more sustainable.
Average capital values continued to rise by 8%, but this is much slower than the 23% growth recorded during the second quarter of the year. At the same time, Dubai property prices are now almost AED2 million more than average prices in Abu Dhabi, according to analysis by propertyfinder.ae.
Meanwhile, Abdulaziz Al Ghurair, chairman of the UAE's Bank Federation, reaffirms the country's desire to regulate the market. He pointed out that chief executives of the 51 banks that make up the federation have agreed to ask the country's central bank to impose fines on those members who fail to comply with recently-introduced regulations that cap mortgage lending. The current legislation doesn't include any penalties.
Dubai developers are set to release billions of dollars worth of development land around the proposed Expo 2020 site as the countdown to the announcement of the bid decision begins. Tasweek, an Abu Dhabi-based investor, is among several developers working up plans for housing schemes close to the 438-hectare site. The company said it planned to start selling the first phase of 400 homes in the coming months and has already lined up investors.
Market Insight is aimed at examining the emirate's dynamic market and forecasting industry trends. Greater stability can be seen in the market, as a result of government regulations. With the deadline for the Expo 2020 announcement just around the corner, developers are readying for a rush of investment for properties near and around the proposed site for the expo. We hope our round-up of key stories and expert opinions have helped in understanding the steady growth the emirate is expected to witness in the foreseeable future. We'll be following up on all things Expo 2020 to update our readers in the following issue.