Dubai: Year-on-year growth in Dubai’s real estate space will reach a stratospheric 60 per cent by the year end, according to a top government official.
“The market has been witnessing a remarkable boom since last year and expected to continue through to the end of this year and will extend to both the residential and commercial sectors,” Sultan Bin Mejrin, director general of Dubai Land Department told Gulf News.
The statement is interesting given that the overwhelming impression has been that much of the growth in recent months was monopolised by demand within the residential sector. Commercial real estate, on the other hand, was seen as growing in much narrow band given the excess supply as well as concerns over multiple strata title ownership.
Shaikh Maktoum Bin Mohammad Bin Rashid Al Maktoum, Deputy Ruler of Dubai, formally opened Cityscape Global 2013 as developers moved ahead with new project launches with a distinctly upstage flavour to them. The first day of the trade show witnessed a rush of new projects in Dubai and expected to reach up to Dh60 billion in value, according to exhibitors.
While he expects further growth for the overall sector in line with the current demand, hospitality developments will top the list, according to Bin Mejrin.
On speculation in the market about another impending bubble in the local real estate sector, Bin Mejrin said that the reality is growth is sustainable as is the case with the overall economy. “The upturn across the board justifies the kind of growth rates in property,” Bin Mejrin added,
“Today, Dubai’s real estate market is controlled by tight legislation that the Land Department and other government entities have worked hard to put in place to protect the market. A good number of other regulations will be released soon to strengthen the sector further.”
On the hike in transaction fees, Bin Mejrin said the four per cent charge has had no effect on market transactions. “The new regulation didn’t slow down buying and selling in the market — on the first day of implementation of this rule the Land Department recorded transactions worth Dh385 million.”
Meanwhile, Sami Al Qamzi, director-general of Dubai Department of Economic Development said the sharp growth in Dubai’s real estate sector will defiantly increase its contribution to the emirate’s GDP. Last year the sector and allied services contributed 12 per cent to GDP.
“This is steady growth and the inflation rate would be quite controlled and marginal in such a matured market,” said Al Qamzi. “The current upturn has come to a mature market which already suffered the consequence of 2009’s financial crisis.”
