After enjoying many years of strong growth, Dubai’s property market has been trying to come to terms with a slowing investor appetite.
According to a recent report by Dubai Land Department, the value of property transactions in Dubai reached $30 billion (AED111 billion) during the first half of 2018 (H1 2018), down by 16% as compared to $35.6 billion (AED132 billion) in the same period in 2017.
The report—issued by DLD's Department of Real Estates Studies & Research—states that H1 2018 recorded a total of 27,642 transactions. Out of which 18,191 sales transactions were worth about $10.8 billion (AED40 billion), 7,668 mortgage transactions were worth over $15.6 billion (AED 57.6 billion) and remaining 1,783 transactions accounted to $3.6 billion (AED 13.4 billion).
Though the DLD did not provide a comparative value for 2017, a previous report which detailed transaction that happened in H1 2017 indicated that a total of 35,571 transactions accounting to a real estate value of $35.6 billion (AED132 billion) were recorded in the first half of 2017. This value was 16.8% higher as compared to $30.5 billion (AED113 billion) in H1 2016, with an additional 7,320 transactions.
Dubai’s real estate sector has been struggling off-late, owing to a stronger dollar and muted economic sentiments in many markets across the world that have dampened investor appetite slightly.
Earlier this year, in order to improve the economic environment and ease the investment climate, the UAE announced a 10-year expat residency for professionals and 100% foreign ownership of businesses outside as well as inside the free zones. In a move to ease costs, the Dubai government slashed licensing fees for businesses by up to 70% within DWTC Authority and One World Central in June.
“Granting investors a UAE residency visa for up to 10 years and reducing government fees included in previous initiatives will be of the most important incentives for economic growth in the Emirate, as they will have a positive impact on reducing business costs and will support Dubai's position as one of the best investment destinations in the world”, said Sultan Butti bin Mejren, Director General of Dubai Land Department.
The list of top 10 investors by nationality was topped by Emiratis who invested $1.8 billion (AED 6.8 billion) in 2,986 real estate transactions. Indians followed with $1.6 billion (AED5.9 billion), accounting to 3,218 transactions and Saudis took the third place with $1 billion (AED3.7 billion) through 1,415 investments. Other nationalities such as British, Pakistanis, Chinese, Egyptians, Jordanians and French too joined the top 10 investors list.
Developers in the emirate are now hoping that the much-awaited Expo 2020 will improve confidence in the real estate market, helping boost the construction activities in the UAE.
“Expo 2020 is close at hand, and developers in the market are expressing interest in aligning with the directives of the wise leadership to turn Dubai into a global pioneer and an attractive investment hub in support of Dubai Strategic Plan 2021,” added Bin Mejren