High residential Values in Dubai

Burj Al-Arab, Dubai

Due to the increasing property values, speculations concerning about a bubble burst in the near future. It was observed that the average capital values of residential property inDubai were 53% higher in third quarter of 2013. Although capital values haven’t reached the peak as in 2008 but are far better than in 2009.

"The vibrancy in the residential market has resulted in growing confidence in the real estate sector," Steve Morgan, head of Cluttons Middle East, said in the report. "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."

Property values in Dubai have been increasing, causing concern among analysts of a bubble repeat in the city. For this purpose Central Bank of the United Arab Emirates have taken measures and issued rules to cool the market and put a stop to the repeating property boom-and-bust cycle. Mortgages valued at less than 5 million dirhams ($1.4 million) will be capped at 75 percent for foreigners buying their first home, while financing will be limited to 60 percent for foreigners buying a second home. For a sustainable pace of growth, The Dubai Land Department also doubled the property registration fees from 2 percent to 4 percent.

Future growth in values remains uncertain; but the market is viewed as more sustainable than ever.
"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," Mr. Morgan said. "Rather than being fuelled by 'fly-by dealers', current demand is primarily being driven by a growing population and rising employment levels."