Sunday, January 15, 2017

Dubai real estate transactions top $70bn in 2016

The total amount of real estate transactions recorded in Dubai, UAE last year exceeded Dh259 billion ($70.5 billion), according to the annual report released by Dubai Land Department’s (DLD).

The Emirate recorded a total of 60,595 real estate transactions in 2016, the report said. Over 41,776 sales transactions took place, representing a total value of Dh103 billion, while the 15,000 mortgage transactions were equivalent to a value of Dh128 billion.

Sultan Butti Bin Merjen, director general of DLD, said the findings in the report confirm that the real estate market in Dubai has reached a new phase of maturity and stability, and that it is moving towards sustainable growth.

Bin Mejren predicted that the real estate market in Dubai will gain further momentum in 2017, signalling an upward trend for sustained growth in the run-up to Expo 2020. The news was shared in his comment on the annual report, which was issued by Real Estate Research and Studies Department at DLD.

The DLD annual report which includes a detailed insight into Dubai’s real estate scene, the infrastructure of mega-projects, and preparations for Expo 2020—also reveals that the real estate market is expected to benefit from a new wave of activity and growth this year.

Developers have risen to meet the challenge of this new growth phase, with the launch of new projects valued at over 100 billion dirhams, as well as the completion of mega-projects and the development of new services to meet growing demands from a variety of real estate sectors.

New phase

In 2016, land sales and mortgage transactions represented a total value of Dh193 billion across 15,994 transactions. This breaks down to mortgages bringing in over Dh114 billion via 5,145 transactions, while sales secured over Dh55 billion from 9,892 transactions. In terms of value, commercial land (already built on) claimed the lion’s share, representing 30 percent of the total value secured by transactions in 2016.

Segmenting sales and mortgage transactions by buildings and units, DLD’s report finds that over 44,602 transactions took place, representing a total value of Dh66 billion. Building sales recorded 2,626 transactions worth Dh7 billion, while units performed 29,258 transactions worth Dh51 billion. In addition, the report records 1,391 building mortgage transactions worth Dh3.4 billion, and 8,000 unit mortgage transactions valued at Dh10.5 billion.

Real estate investors

Dubai’s real estate sector continued to attract a wealth of investors in 2016; DLD reports that the sum of real estate investment transactions for the year exceeded Dh91 billion from 55,928 investors. As has been the case in previous years, the leading investors were UAE nationals from across the GCC, Arabs, and foreigners, for their investment of nearly Dh22 billion from over 7,000 investors.

In 2016, citizens of the Gulf Cooperation Council (GCC) states contributed Dh35 billion from 12,768 investors of six nationalities, while 3,294 Saudi Arabian investors made transactions worth Dh8 billion.

Investors from Qatar and Kuwait approached Dh2 billion mark, from 1,006 and 770 investors respectively, followed by nationals from Oman (301 investors) and Bahrain (244 investors), who contributed up to Dh1 billion.

Arab investors

Arab investors from outside the GCC contributed over Dh12 billion to the real estate market last year, from 6,416 investors of 16 nationalities. DLD’s report reveals that among these, Egypt ranked highest in number of investors, with 1,364 investors making transactions worth over Dh2.4 billion. Other leaders in numbers of investors were Algeria, Iraq, Lebanon, Palestine, Sudan, Yemen, and other Arab countries, while citizens of Jordan ranked highest in terms of value, investing a total of Dh2.5 billion across 1,331 investors.

Indian success

2016 saw foreign investment in the Dubai real estate market approaching Dh44 billion, from 22,834 investors of 136 nationalities. Indian nationals rank highest in terms of both volume and value, making Dh12 billion worth of property transactions across 6,263 investors. Pakistan contributed Dh4.4 billion worth of property transactions across 3,372 investors, while British investment totalled Dh5.8 billion from 3,372 investors. The report also details the activity of investors from Canada, China, France, Iran, Russia and the United States, who are among the most prominent foreign investors in Dubai's real estate market.

Attractive areas

DLD’s report identifies Dubai’s top five sales areas for 2016,  revealing that the Business Bay area benefited from a high level of interest — 3,508 investments worth Dh6.2 billion — followed by Dubai Marina, Jebel Ali 1, Burj Khalifa and Warsan 1.

Studying the same list in terms of value alone, the Burj Khalifa area stands out as superior to others, having secured over Dh7 billion across 2,097 transactions. Following closely behind, the Dubai Marina area recorded 2,937 transactions worth Dh6.3 billion. Business Bay secured third place, followed by Jebel Ali 1 and Warsan 1.

Dubai’s Seeh Shuaib emerged as the most attractive area for investors in 2016, with the value of its land sales transactions reaching Dh3 billion across 1,684 transactions. It was followed by Al Yafra 3, Al Yafra 2, Al Hebeya 3 and Sheikh Mohammed Bin Rashid Gardens.

With regards to building sales, Sheikh Mohammed Bin Rashid Gardens was the most prominent area in 2016, attracting a total of 699 transactions valued at Dh1.8 billion. Al Yalayis 1, Al Thunaya 4, Al Yalayis 2, and Nad Al Sheba 1 were the next most active areas for building sales.

With regards to individual unit sales, Business Bay took first place with 3,491 transactions valued at Dh5.1 billion, followed by Dubai Marina with 2,923 transactions exceeding Dh6 billion. Jabal Ali 1, Burj Khalifa and Warsan 1 were the next most active areas for unit sales.

Land mortgages

The highest number of land mortgage transactions was recorded in Al Thunaya 5, which secured 352 mortgage transactions representing a total value of Dh2.274 billion. It was followed by Al Hibeya 3, which recorded 340 mortgage transactions at a total value of Dh1.002 billion, and Wadi Al Safa 6, where 261 mortgage transactions amounted to a total value of Dh865 million.

In terms of buildings, Al Thunaya 4 came on top in terms of mortgage transactions, with 350 mortgage transactions amounting to Dh623 million, followed by Al Yalayis 1, which recorded 280 mortgage transactions at a total value of Dh362 million. Wadi Al Safa 6 came in third place, with 170 mortgage transactions amounting to Dh363 million.

Dubai Marina secured the highest number of mortgage transactions for individual units, with 1,107mortgage transactions amounting Dh1.721 billion. It was followed by Thunaya 5, where 953 mortgage transactions totaled Dh1.258 billion, with Business Bay following in third place with 783 mortgage transactions representing a total value of Dh1.154 billion.

Real estate figures

DLD’s data released by Developers Registration also indicates the entry of 55 new developers into the real estate market, with the launch of 134 new projects worth over Dh100 billion, and the completion of a further 62 projects in 2016. The data also reveals that in 2016, DLD recorded over 410 thousand lease contracts from different groups across Dubai.

DLD issued 695 licenses over the course of 2016, and the report details that the activity of Brokerage in the sale of real estate and leasing came in first with 272 licenses, with the activity of Brokerage in real estate rental coming in a close second at 223 licenses.

There has been demand for other categories of licenses in the field of real estate, most notably real estate development, the interim real estate development, property valuation services, rental services and property management to third parties, the purchase of land and properties, mortgage brokers and many others.

The report also records that the number of brokers has increased to 5,933 over the past year, and that 2,285 brokers’ offices were active in 2016. – TradeArabia News Service



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