Dubai real estate deals top $21 billion in first quarter
Dubai Land Department recorded 20,000 real estate transactions worth $21bn (AED77bn) during the first quarter of 2017.
The Dubai Land Department revealed the results of real estate transactions during the first quarter of 2017. Sultan Butti bin Mejren, Director General of Dubai Land Department announced the value of real estate transactions that reached $21bn (AED77bn) through 20,000 real estate transactions.
Dubai Land Department (DLD) hosted a media gathering as part of the ‘Ask the Leader’ initiative organised by the Dubai International Government Achievements Exhibition 2017. His Excellency Sultan Butti bin Mejren, hosted the meeting with the media and public alongside His Excellency Engineer Marwan bin Ghalita, CEO of the Real Estate Regulatory Authority (RERA) and answered questions and inquiries.
Bin Mejren confirmed to reporters that according to the Land Department’s data analysis there is an increase in the value of transactions by 45 per cent compared to the first quarter of last year 2016. He added that the total value of real estate investments reached more than $11bn (AED40bn) through 15,501 investment transactions.
Bin Mejren said: “These numbers are promising and go against the negative mentions that were being made about Dubai property market’s prospects. It has the makings of being a good year. And it’s not just in investment that we are seeing gains.
“Our building reclassification programme [which covers all of the older buildings in the city] is 69 per cent complete; it has covered 144,000 plots and 314,000 properties.” According to officials, 80 projects are expected to complete this year, most of them launched in 2014-15.
RERA’s proposed new law
Dubai’s Land Department is working on a new rental law that will give separate credence to commercial real estate and residential property. The law, which is being considered by the legislative committee, will replace the current one-size-fits-all rental regulation, top officials said.
The new development could pave the way for each property asset class to have its own rental index and contractual obligations between negotiating parties. If the law passes, it would signal another major step up for Dubai’s property market in terms of having a more equitable relationship between tenant and landlord.
Currently, the Dubai Rental Index, dominated by residential property, is updated annually. The Land Department announced a “unified lease form” on all rental contracts in Dubai in March. Penalties would come into effect if there are omissions on the part of any one involved in the deal.
Marwan Bin Ghalita, CEO of the Real Estate Regulatory Agency said: “We want a new rental law that covers all types of property assets and not just draw on the provisions within a single, unified law.”
There will also be changes to another existing regulatory regime currently in place. The laws governing homeowners associations will be simplified to bring in more transparency, officials said. With more freehold projects getting greenlighted, the Land Department wants to clearly define the rights of developers and property owners.
Real Estate Investment Trusts
Dubai Land Department is also working on another major regulatory initiative — putting in place a strong foundation for real estate investment trusts (REIT). Currently, only Emirates REIT is active in the market, grouping institutional funds into single or multiple properties for yield generation.
Bin Ghalita said: “Our focus is to get in more overseas funds involved and REITs would be a good vehicle through which they can operate. Until now, there was too much emphasis on individual investors, and if the market takes a bit of an uncertainty, they pull out. With institutional investors, the strategy is more long term, through the ups and downs of a market cycle. We will need more of these investors.”
The Land Department has sounded out the DIFC Authority whereby some of the funds operating within its jurisdiction could take local exposures in the realty market. Emirates REIT started its life by investing exclusively in commercial realty and then, recently, set up a second one to pick up income-generating residential properties in Dubai and Ras Al Khaimah.
Bin Ghalita added: “In 2006, the Land Department oversaw 16 laws over the years we have expanded the regulatory arm. And more of our services are being pushed online. For instance, an overseas investor can have a ready set of data on likely yields depending on the location from our smart map app.
“If they want to pick an estate agent, they can choose between those classified under gold, silver or bronze. Data on how many an agent was involved in and all such relevant details are there. It’s up to the investor to make informed decisions when investing in Dubai. The transparency has already been built in.”
Know Your Rights as a Real Estate Investor in Dubai
Bin Mejren launched the ‘Know Your Rights as a Real Estate Investor in Dubai’ guide in cooperation with Al Tamimi & Company at the Dubai International Government Achievements Exhibition 2017.
The event was attended by the Director General of DLD and Husam Hourani, Managing Partner of Al Tamimi & Co., who participated to provide more details about the guide and its aim to highlight the investor rights guaranteed by the Emirate’s laws and regulations.
Bin Mejren said: “Through its various departments, DLD is keen to cooperate with all concerned parties in the public and private sectors to spread awareness and a safe real estate culture among citizens, residents and visitors by informing them of their rights and duties. This book will certainly help to inform investors about their rights, and is also a tool for promoting a safe and stable investment environment for investors seeking opportunities in Dubai – a haven for world-class investments.”
Husam Hourani, Managing Partner at Al Tamimi & Company, said: “We are delighted to be partnering with DLD in this exciting initiative. The guide provides those interested in investing in Dubai’s real estate sector with comprehensive information to ensure they have all of the information they need to make well-informed decisions and protect their investments.”