Dubai property sales more than doubled to 1,188 in the first half of this year compared with the previous six months, says the Dubai Land Department. But the number of mortgage-related transactions fell to 1,697 between January and June compared with 1,861 in the second half of last year, data from the department show. In a market where property prices have fallen by up to 50 per cent in some places since their peak in the middle of 2008, brokers saw a turnaround in sales in the first half.
"Up until the summer we had a good six months," said Gregory Antioch, a sales negotiator at the property consultancy Cluttons. "I was closing maybe three or four deals a month. Owners now realise they're not going to get the kind of price they want and so it's encouraged people to buy." Mr Antioch said sales were picking up again, with buyers looking for properties in established communities such as Emirates Hills, The Springs and The Meadows.
Developers launched hundreds of projects in the boom to cater to demand from a population that grew at an average rate of 7.5 per cent a year between 2005 and last year. But a lack of liquidity has led to 495 projects being delayed, or being cancelled by Dubai's Real Estate Regulatory Agency (RERA) since the middle of 2008, the bond prospectus shows. Still, with Nakheel planning to finalise its debt restructuring by the end of the year, there are signs of renewed activity in projects.
The developer last week revived construction on 300 homes at the Al Furjan community and plans to resume work on seven other projects by the end of next month as it settles debts with contractors. Decisions on longer-term projects will be made once all short-term projects are finished and will be "based on where the economy is at that point … and it will be supply and demand driven," Chris O'Donnell, Nakheel's chief executive, has said.
Despite increased activity on some of the emirate's sites, oversupply is the biggest threat to recovery. A report from the Investment Boutique in July revealed there would be a surplus of up to 115,000 properties by the end of 2012.