Dubai cooling measures already impacting sales

The Cluttons Dubai Property market update Q3 2013 reveals that average capital gains continued to climb 8 per cent, slower than the record 23 per cent growth recorded in the second quarter.  It is too early to see whether the UAE Central Bank’s decision to limit mortgage lending and the Dubai Land Department’s doubling of property registration fees will succeed in curtailing growth but they are already affecting the volume of deals being recorded, says the report.

Prices are still 26 per cent below the Q3 2008 market peak, although they are now 47 per cent above the bottom of the market, which was reached in Q2 2009. Year on year, values are 53 per cent up on this time last year.

Steve Morgan, head of Cluttons Middle East, said: "The vibrancy in the residential market has resulted in growing confidence in the real estate sector, but we believe concerns of the market overheating are still overly negative, especially given that despite the recent gains, average residential values remain well below the market peak. Although the long term effect remains to be seen, short term indicators show that recent regulation appears to be stemming further sharp increases in property prices. Rather than being fuelled by ‘fly-by dealers’, current demand is primarily being driven by a growing population and rising employment levels."