Dubai’s real estate market has stabilised and is seeing around 50 sale transactions a day, the head of the emirate’s property watchdog said.
RERA is in carrying out a financial review of about 90,000 real estate units due for delivery over the next five years but sees signs the market has steadied, said director general Marwan Bin Ghalaita.
“The market is in a stable state. We are seeing around 50 transactions a day in the Land Department and I am talking about fresh transactions” he told Arabian Business. “[It’s] those coming to Dubai to take advantage of the opportunities in real estate.”
Ghalaita said on March 17 there were 220 residential real estate projects under construction in Dubai this year.
“Moving forward we need to capitalise on the good stories we have in Dubai. We need to capitalise on the trust,” he said.
According to data from Dubai Land Department, property transactions worth $33.49bn were concluded last year.
The agency has unveiled a financing scheme for developer and end-user funding, which offers competitive loans to real estate projects that are at least 60 percent complete.
Seven banks and Islamic banking institutions have joined the state-backed Tayseer scheme, which awarded its first AED65m loan to Al Manal Development last week. A further 114 projects have applied for financial support, Ghalaita said.
“The government is allocating the money where the useful projects are,” he said.
The Land Department has “four projects coming in a row” that will benefit from the scheme, he said.
Dubai’s property sector was hit hard by the downturn, with billions of dollars worth of projects put on hold or cancelled amid tumbling real estate prices.
Speculators caught with multiple properties and little chance to turn a profit fled the market and defaulted on purchases, while other buyers continued to honor their contracts, often paying installments even after work was halted in the aftermath of the crisis.
About 50 percent of Dubai real-estate projects were cancelled or suspended after the crisis, the government said last year.
Despite this, the emirate is expected to see 48,000 homes released on to the market in the next two years, increasing supply in a glutted marketplace by a further 12 percent, Landmark Advisory estimates.
Around 12 million sq ft of commercial space probably will be completed in Dubai this year, according to Jones Lang LaSalle. Office vacancy rates stood at 41 percent in the fourth quarter and may exceed 45 percent over 2011, the property broker said on January 23.Average rents dropped by 30 percent during the fourth quarter.
Several residential developers are now being advised to convert commercial space into serviced apartments or residential units until supply is absorbed, Ghalaita said.