Dubai real estate transactions increase in first five months

Dubai: The real estate market has experienced a rise in the number of transactions compared to the same time last year, the Dubai Land Department said.

In department figures for the first five months of this year, 3,642 land sales were registered, worth a total Dh25 billion.

The sales comprised a combined area of 62,815 square feet, the department said.

The Reidin.com website's Dubai Focus section said there were 4,961 residential sales transacted in all of 2009.

The Land Department figures also revealed that in the first five months of this year 3,750 mortgages were registered worth Dh32 billion. The mortgages applied to a total of 95,460 square feet.

The department's assistant director-general Mohammad Sultan Thani said: "While we may see less value there are many more transactions on a daily basis compared to last year."

In other figures compiled by the Reidin.com website's Dubai Focus section, sales of residential properties numbered 3,169 from the beginning of January through May. Slightly more than 10 per cent of these transactions were mortgaged.

Apartments represented 2,927 of these transactions, of which around 10 per cent were mortgaged.

Villas comprised 241 sales, of which about a quarter were mortgaged.

"There are more transactions than last year, the numbers show a bottoming out of the market and a flat trend," said Reidin.com CEO Ahmet Kayhan.

Residential units

However residential sales figures for this year were not expected to reach the 10,845 of 2007 or the 7,638 of 2008.

Real estate industry experts also said while transactions might be higher, prices were not.

The average price in 2009 was Dh870.40 a square foot and this year it is Dh816. Prices hovered around Dh770 at the beginning of the year, rising to Dh830 in May and falling to Dh760 a square foot in June.

In 2008 the average sale price was Dh998 a square foot, while in 2007 it was Dh660.

Kayhan said current prices were back to the levels of the third quarter of 2007, and villas were pulling ahead of apartments.

"The occupier owners are now governing the market and they prefer villas over apartments.

"Villas have gained in value, a healthy sign," Kayhan said.

Thani said lower prices had created a lot of opportunities in the market, of which buyers were taking advantage.

"They are not expecting to make money selling a whole building, but are focusing on selling and buying more affordable smaller apartments," Thani said.

Dubai residents were also taking advantage of dwindling rents, real estate experts said.

The Landmark Advisory's June leasing guide indicated rents had dropped in lower and better quality apartments.

Landmark Advisory director of research Jesse Downs said: "Tenants are increasingly seeking more value for their rental dirham and are able to leverage alternative options to negotiate very attractive deals.

"More significantly, this is a trend now observed in high quality units in prestigious locations," Downs said.