Dubai property bubble fears overstated

October 28, 2013 by Driven Properties   comments (0)

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New regulations from Dubai Land Department minimizing speculation; new offer supporting retain ideals down.

"New laws in the Dubai Land Department are aimed at reducing speculation, while new supply is helping maintain ideals down," the USbased investment bank mentioned.

Property prices are 36 percent below their 2008 peak even with rising by about a third from the low within the next quarter of 2011, bank experts added.

Standard Chartered said in September that despite prices soaring, Dubai's property market was not proceeding towards yet another crash and also industry was more lasting, determined by a better economy rather than speculation.
Although the UK-based Knight Frank said property costs and rents in Dubai have increased at the fastest speed in the world, Jones Lang LaSalle reported last month thin the rate of increase (cost and hire) will decrease over the following 12 to 24 weeks.

The Dubai Land Department has already taken steps to discourage flipping in the marketplace by boosting registration costs to four per cent from two per cent from Oct 6 with Director-General Sultan Butti bin Mejrin emphasising the shift wouldn't have any negative impact on the marketplace.
7 reported developers need to offer a 20 per cent building assure and make 100 per cent property payment before starting any new job.

"No job in Dubai is launched without a building assure," Real Estate Regulatory Agency CEO Marwan bin Ghalita had advised this web site.

After we raised the issue on how developers selling off strategy might complete their job, he said: "Those selling off plan have previously put a 20 per cent guarantee as security and they truly are not being permitted to use money from the trust (escrow) accounts until 30 % of building is reached."

The UAE Central Bank's new mortgage legislation is anticipated to be revealed before yearend, which Goldman Sachs analysts believe can help cool the market.

Funds remained the king in Dubai's realty market in the first half. Nearly 80 percent of flats were bought by cash customers.

Political balance and high rental yields continue to push Dubai appeal to investors.

Leasing yields, the lender said, are between 5 and 6 per cent in comparison with global range being between 2 and 3 per cent.

Earlier, Knight Frank said climbing expatriate residents had caused "good" rental returns for investors 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 sell property dubai