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Dubai realty transactions up 12%, 48 new projects launched

Khaleej Times 2019-09-17 17:40:59

The results of the real estate sector's performance in the first five months of 2019 indicate a significant improvement in the value of real estate transactions and investments, with transactions reaching Dh106 billion compared to Dh95 billion in 2018, a growth rate of 12 per cent, Dubai Land Department said in its annual report.

In terms of real estate project growth, the first five months of 2019 witnessed the launch of 48 new real estate projects, which are expected to represent a new addition to the real estate sector. These projects ranged between residential apartments, villas, and villa complexes.

#Dubai's @Land_Department:
-53,000 real estate transactions were conducted in 2018 with a value of over AED 223 billion
-31,000 real estate investors committed AED 80 billion through 41,000 investments in 2018
-New investors represent 66% of the total number of investors in 2018 pic.twitter.com/hL95Vf3laf

- Dubai Media Office (@DXBMediaOffice) September 17, 2019



Upon completion, they are expected to add approximately 8,000 new residential units to the real estate sector with a total area exceeding 730,000 sq.m. Residential apartments represent the largest percentage thereof, compared to retail stores, offices, and other commercial units with 7,537 new residential units with a total area exceeding 668,000 sq.m.

According to the annual report released on Tuesday, the real estate sector's contribution towards Dubai's GDP nearly doubled to 13.6 per cent in 2018 as compared to 6.9 per cent in the previous year while the construction sector's contribution to the GDP reached 6.4 per cent in 2018 compared to 6.2 per cent in 2017. The year 2018 witnessed around 53,000 transactions worth Dh223 billion, with overall Investments recording Dh80 billion through more than 41,000 investments by over 31,000 investors from around the world.

"The real estate investment results indicate an increasing growth in the number of corporate investors compared to individual investors. The percentage of individual investors decreased from 62.8 per cent in 2017 to 59.8 per cent in 2018, while the percentage of corporate investors increased from 37.2 per cent in 2017 to 40.2 per cent in 2018. This increase reflects the ability of the real estate sector to provide investment options that attract corporate investors and effectively contribute in providing huge real estate investments in the real estate sector," the report said.

The Business Bay area ranked first in terms of the number of real estate transactions with over 4,000 transactions. It also maintained the first position in transaction value with over Dh11 billion.

New investors represent 66 per cent of the total number of investors in 2018 while active investors represent 34 per cent of the total number of investors, and in terms of the value of the investments, new investors represent 57 per cent of the total value of the investment in 2018 while active investors represent 43 per cent of the total value of the investments.

Individual investors from the UAE ranked first in terms of the value of the real estate investments, with investments worth over Dh10 billion. Indian investors came second with investments worth over Dh8 billion in 2018.

In terms of the real estate projects activity, the number of completed projects in 2018 was 62, with buildings comprising 74 per cent, villas 15 per cent, and villa complexes 11 per cent.

The number of new projects launched in 2018 was 84, comprising 20,000 units across villas, buildings, and land plots.

In terms of projects that are under construction, those registered with DLD in freehold areas only reached 102 projects in 2018 as per project registration date. The number of units expected to be added from these projects is 130,000, each bound by its respective expected completion date.

Analysis for the residential sector reveals that the number of completed residential units in freehold areas only and in accordance with the projects registered in DLD reached 7,469, excluding villas and villa complexes, with a total area exceeding 893,000 square metres.

As for the demand, which is expressed by both sales and rents, the report indicates that sales represented the largest percentage of real estate transactions, with more than 63 per cent of the total number of transactions in 2018, with the recorded sales reaching over Dh74 Billion in 2018.

In terms of rents, the growth in the population and the growth in the number of employees in Dubai has been reflected in the number of leased units and the number of lease contracts in Dubai. The number of newly leased contracts reached 246,509, while renewed lease contracts reached 251,409 in 2018. From 2013 to 2016, new lease contracts were decreasing steadily against an increase in renewed lease contracts, whereas from 2017 until 2018, the numbers of both new and renewed lease contracts increased. However, the growth rate of new lease contracts was higher than that of renewed lease contracts, which reflects the additional demand on residential and non-residential units in the sector with the price correction in rents in Dubai.

Sultan Butti bin Mejren, Director General of DLD, said: "Though the real estate sector reflects the development achieved by the Emirate across all fields, it does not come without its challenges. On the one hand, we have to continue this momentum, which has been achieved through promotional initiatives at the local and global levels through our exhibitions in prominent Arab and international capitals. On the other hand, we should ensure transparent communication and openness to all investors and other parties in this sector."

According to the DLD's Annual Report, Dubai's real estate sector progressed in global competitiveness indicators. In the ease of doing business index, the UAE delivered outstanding results by ranking 11th globally, having advanced ten ranks among 190 countries. This result is represented by Dubai as the largest business city and a result of improvements in a number of sectors, most prominently of which the real estate sector, represented by the real estate registration index, which advanced three ranks in 2019 and ranked seventh globally.

The value of the gross domestic product (GDP) in Dubai reached Dh398 billion in 2018 compared to Dh390 billion in 2017, with a GDP growth rate of 1.9 per cent in 2018.

To stimulate the GDP growth, the Government of Dubai launched a series of initiatives to promote the growth process and increase the economic activities in the Emirate by reducing the cost of doing business, providing facilities to entrepreneurs, modifying the length of stay, and providing long-term residence of up to ten years for investors and those with outstanding skills, in an effort to attract competencies in the scientific and practical fields as well as to support demand in the local market.

waheedabbas@khaleejtimes.com

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