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Experts believe that Dubai’s real estate market is more secure and transparent

The residential sales market has continued to build on what has been a positive start to 2012, according to Cluttons, the real estate specialist that has enjoyed a dedicated Middle Eastern presence since 1976.
The UAE and especially Dubai is increasingly seen as an oasis of calm within the MENA region with a strong prospect for regional investment and Cluttons has seen an upward trend of local buyers looking to invest in a property market, which many analysts believe is at the bottom.

Speculation has disappeared and distressed sellers are very few. Proactive sellers are now looking to trade up as property prices have fallen, and in some cases as much as 60%. As a result, more serious buyers are once again searching for those exemplary properties.

Cluttons are now seeing more GCC Nationals investing in the UAE, and seemingly these buyers are replacing investors from Europe and the United States.

Since the downturn of 2008, Cluttons has seen a return to property financing by the banks. At that time, nearly 70% of lenders withdrew from this type of finance. Now 95% of those lenders have returned to the market, famously led by Tamweel who returned to mortgage finance in November 2010. In December 2006, real estate mortgage loans were AED28,280,000. In September 2011, this figure leapt to AED160,130,000 and Cluttons believes the reason for this is not that the buyers are getting into debt, but more and more end users are applying to buy rather than rent.

However, Cluttons notes that the Dubai market is still plagued by oversupply and with a fragmented market, there is obvious demand is certain areas over others, giving rise to the term ‘selective stabilisation’.
In some premium locations with only a fixed number of properties on the market, Cluttons is already seeing prices increase as a result of a strong interest in potential buyers. With the emirate’s economy expecting to grow by 4.5% in 2012, up from an estimated increase of 3%, according to Sheikh Ahmad Bin Saeed Al Maktoum, chairman of the Dubai Supreme Fiscal Committee, confidence is high for overall real estate growth.

Transactional activity can be found at the Dubai Land Department where the number of sales during the fourth quarter of 2011 reached 2,605 compared to 1,589 in the third quarter. This represents an increase of 64% quarter on quarter. Cluttons proposes that this trend is definitely, continuing and is evident to brokers on the completion of transfers.

‘Dubai has definitely learnt lessons from the past, and as such more and more transparent legislation is being passed at government or federal level, which can only improve the prospects of buyers and sellers alike,’ said Mario Volpi, head of sales and leasing for Cluttons Dubai.

‘It is still a buyer’s market, since the global recession, however, now with the return of accessible financing, sellers are now enjoying a high number of buyers in the market, therefore experiencing quicker sales,’ he added.