Residential property sales rise in Dubai, official govt data shows

The number of residential property sales realised in the first half of 2013 in Dubai increased by 41%, according to the latest data from the Dubai Land Department.

The data report also showed that the total value of properties requested for valuation in Dubai increased by 70% compared to the same time last year.

Overall the department’s Valuation Committee, in cooperation with Dubai's Real Estate Appraisal Centre, valued 2,388 properties worth AED89 billion.

‘The amount of transactions that the committee sees serves as a gauge for progress of the market with growth thus far being a clear indication of a recovering market and increased investor confidence,’ said Mohammed Khodr Aldah, head of Dubai's Real Estate Appraisal Centre.

There are considerable price variations in the emirate. For example, the average value of land in the Burj Khalifa area reached AED1,960 per square feet, some six times higher than Mirdiff where it was just AED320 per square feet.

The report also showed that more than 50% of valuation requests were made for empty land plots, with the remaining percentage 49.7% on completed buildings.

‘Systemised real estate valuation plays an integral role in the growth of investments and the economy by doing away with random prices, providing a balance between supply and demand and having a direct impact on the resolution of property disputes,’ the report explained.

Sultan Butti Bin Mejren, director general of the Land Department, described Dubai's real estate market as a ‘lucrative one for its stability, diversity and promise of high return on investment’.

Mean while the latest Prime Global Cities index from international real estate firm Knight Frank shows that the price of luxury homes in Dubai increased by more than 6% in the second quarter of 2013.

The index also showed that prime real estate prices in the emirate have increased by 21.6% in the last 12 months, making it the second best performing market in the world.

‘The price of luxury villas began to rise in early 2012 and apartments are now following suit,’ the report said, adding that it attracting demand from North African, Asian and Middle Eastern buyers.

Recently the International Monetary Fund warned officials in the emirate that they might need to intervene in its property market to prevent another boom and bust cycle of the kind which saw prices fall by 60% in some locations.

The economy and the property market are now recovering, but so strongly that the IMF worries another bubble could form. The IMF said that because Dubai's debt has continued to rise, it might have difficulty coping with fresh instability.