Dubai Property Bubble Worries Overstated
New rules from Dubai Land Department minimizing speculation; new supply supporting keep beliefs down.
"New regulations in the Dubai Land Department are geared toward reducing speculation, while new supply is helping keep beliefs down," the USbased investment bank stated.
Property prices are 36 per cent below their 2008 peak even with growing by about a third from the low within the second quarter of 2011, bank professionals added.
Standard Chartered said in August that despite prices rising, Dubai's property market wasn't proceeding towards yet another crash and the market was more lasting, swayed through an improved economy as opposed to speculation.
Although the UK based Knight Frank stated property costs and rents in Dubai have climbed in the fastest speed on earth, Jones Lang LaSalle reported last month that the price of growth (cost and hire) will slow-down over the following 12 to 24 weeks.
The Dubai Land Department has already taken steps to discourage flipping available in the market by increasing registration costs to four per cent from two per cent from Oct 6 with Director-General Sultan Butti bin Mejrin emphasising the transfer would not have some negative effect on the market.
7 reported developers have to provide a 20 per cent construction guarantee and also make 100 per cent land transaction before launching any new job.
"No project in Dubai is launched without a building guarantee," Real Estate Regulatory Agency CEO Marwan bin Ghalita had advised this web site.
Once we raised the matter on how designers attempting to sell off program might complete their job, he explained: "Those selling off plan have put a 20 per cent guarantee as collateral and they truly are not being allowed to use money in the trust (escrow) accounts until 30 per cent of building is reached."
The UAE Central Bank's new mortgage rules is forecast to be unveiled before year-end, which Goldman Sachs experts believe will help cool the marketplace.
Cash remained the king in Dubai's realty market in the first-half. Nearly 80 per cent of flats were bought by cash purchasers.
Politics stability and high rental returns continue to push Dubai appeal to investors.
Earlier, Knight Frank said growing expatriate public had led to "good" rental returns for traders with net produces between four and six percent. For more information on the cloudy situation around Dubai real estate market click to find out more on Dubai Properties
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