On this week’s episode of Taking Care of Business, Operations Director; Paul Kelly is joined by Communications Executive; Khwaish Adnani (Kash) to talk all things May numbers, the rise of client registrations in the market, corporate tax updates, what’s Dubai’s newest development and lastly, will Man City be champions this year?
After April’s slowdown from Eid, Ramadan and Easter holidays, the market has successfully bounced back and if not higher in May. The market recorded the second biggest transaction numbers since the implementation of foreign investment in the city, this reconfirmed what Allsopp & Allsopp explained last month. Paul Kelly explains how the market in May has seen 11,621 property transfers at the Dubai Land Department, which is a massive 75% increase year on year and a 40% increase month on month.
To which he adds that the value of those transactions is or was AED 33 billion, which is a huge 85% increase year on year and 26% increase month on month. Impressive.
Khwaish questions; is Dubai an attractive place for UK investors? To which Paul explains that on last week’s podcast with Marc Walters, he explains that the UK saw a mortgage rate rise for the 12th time since December 2021. That's really made it harder for buy to let investors to make money consequently, over the last eight years and more so, since being honest, a lot of UK investors are flocking to Dubai and UAE at the moment, there's a lot of people that are moving over here to live, to moving their businesses over here.
And what about off-plan - how did the off-plan market perform in May? Paul adds that - we had a notable transaction in residence which was a penthouse over there that the team managed to sell for 65 million which was amazing and that was the biggest transaction in the month for them. Furthermore, apartments and mid-entry townhouses and villas under AED 3 million remain a prime investment choice, representing over 90% of Dubai's property transactions. Notable off-plan activities took place in communities such as Sanctuary Falls, Millennium Estates, and Lime Tree Valley.
But If we look at the market in general, there were 5651 off-plan transactions registered at the Land Department in May compared to 5970 for the secondary market.
So, almost 50-50 really in terms of value, there was AED 14 billion worth of off-plan transactions and AED 19 billion worth of secondary transactions which again, following suit at the moment, indicate that the secondary transactions are providing a higher value in the market.
Next up comes the mortgage numbers - the buyer's interest has risen in Dubai and numbers are here to prove it. In May, mortgage numbers shot up to 99.99% proving that most buyers are opting for financing rather than being cash buyers. Although the cash buyers are still high in the market, most people opting for financing signals that the market is in a healthy place.
But apart from that a huge 58% rise has also been seen in villa and townhouse transactions as after staying in lockdown people are now opting for the outdoors and enjoy living in bigger spaces. With financing being so easily accessible, it's become easy for people to get their own homes in Dubai.
Client registrations in May were up 20.1% compared to April but a massive 96% rise year on year. Paul shares that, this is a buyer registry for buyers that are registering with us with an interest to purchase property and activity levels in terms of viewing was up 23% month on month, May compared to April and up 48% year on year. But I would expect to see with a 96% increase in client registrations that June is gonna be a very busy month as well for people out there viewing and a 9.6% increase month on month in terms of property listing.
And then if we look on the tenant side, one thing I picked up here is listings were up 21% on the rental side of the market. Whereas client registrations month on month were up 3.7%.
There’s a lot more in May's reports, these are just the highlights but you can read the report and get exclusive insights into Dubai’s property market.
UAE’s corporate tax has officially been implemented and begun from June 1st 2023 and initially companies getting an annual turnover of AED 370,000 were to be taxed 9% but according to Ministry of Finance’s new update - companies generating a turnover of more than AED 1 million annually will now be taxed.
Apart from that, does corporate tax apply to rental incomes? Paul explains that those that are purchasing property as overseas investors and are investing in a company name - it would be subject to corporate tax.
The initial phases of this development have begun and the contract is worth AED 1 billion! The South Bay development is a kilometre long Crystal Lagoon, three kilometres of water from promenade, multiple beaches, clubhouse, fitness centres, parks.
Khwaish then discusses how Dubai also announced that they're doing the whole beach expansion project. And asks Paul - So what do you think about that?
“It's fantastic and the people, they are Dubai and the developers because it really is the developers that are making these communities who really have now cottoned on to the fact they need to create a lifestyle for people. Property is not the most important thing to people.
People will make compromises on the property itself, even the location, if the lifestyle that's an offer to them and their family is, is at a different level. And I think this is what the developers have really noticed now and they really caught it on to and they're making each community is like becoming its own destination.”
This Saturday is the UEFA Champions League, and whether you’re singing the Blue Moon or Pazza Inter Amala, this is going to be a huge game.
And not to mention, if Man City wins - this could be a historic win as it would be the second English team in history to win the treble after their rivals Man Utd did in 1999.
Who do you think is taking the win?
To hear all this and more, tune into Taking Care of Business, every Friday!