Property transactions in Dubai surge in first half of 2013

A total of Dh108 billion of property changed hands in Dubai during the first half of 2013, an increase of nearly a third on the previous year.

Experts continue to warn that house prices in Dubai are rising so quickly that the emirate could be heading for a new property bubble. Razan Alzayani / The National

A total of Dh108 billion worth of property changed hands in Dubai during the first half of 2013, an increase of nearly a third on the previous year, according to new data.

According to figures published yesterday by Dubai Land Department, the government body responsible for registering all property transactions in the city, the exchanges were worth Dh108 billion - 30 per cent higher than the total recorded the previous year.

These comprised 30,469 properties, which changed hands in the emirate during the first six months of the year, 60 per cent more individual transactions than the 18,953 recorded a year earlier.

The data, which covers both commercial and residential transations in Dubai, come as experts continue to warn that home prices in the emirate are rising so quickly that it could be heading for a new property bubble.

Cash remained king in Dubai with 22,748 transactions, nearly three quarters of the total, paid for in full rather than through a mortgage - a slight decrease on published figures last year, when cash sales represented 77 per cent of the market. The typically lower price of cash purchases, however, meant that they accounted for just under half of the total value of sales during the period at Dh52.8 billion.

Despite the threat of a mortgage cap being introduced, the Land Department said that the number of properties being bought with mortgages rose during the first half. It said that buyers using mortgages bought 6,050 properties worth a total Dh51.3 billion - roughly double the number of purchases recorded last year and a two thirds increase in the total value.

Transaction volumes for the half- year rose 60 per cent from 18,953 in 2012 to 30,469. They also showed a 13 per cent increase in the second quarter of the year, rising from 14,260 in the three months to the end of March 2013 to 16,209 in the three months to the end of June.

"The high percentage of growth reflects ongoing real estate developments in the emirate that continue to attract local and international investors to Dubai," said Sultan bin Mejren, the Director General of Dubai Land Department.

"We have seen values rise considerably over the past year. In the areas of Dubai which we cover, we are seeing prices rising by between 20 and 25 per cent compared with last year," said Richard Paul, the director of residential valuations in Cluttons' Dubai office.

"However, we believe that by the end of the third quarter we will start to see the government bringing in a number of measures such as the mortgage cap aimed at taking the fizz off the market and this is something we believe is necessary."