Dubai to control ‘flipping’ to avert new property bubble
Home prices in Dubai are expected to increase between 35 to 40 percent in 2014
Dubai plans to control the trade in unfinished properties - known as ‘flipping’ - in a bid to prevent another bubble forming in the housing market, Bloomberg reported.
Home prices increased by over 30 percent in 2013, and rises of between 35 to 40 percent are forecasted for 2014, according to Dubai’s Land Department General Director Sultan Bin Mejren.
“Transactions on off-plan properties are a little dangerous… we are now studying them and looking at ways to ensure that they don’t hurt the market,” Mejren said in a Bloomberg interview.
The real estate authority is expected to review the transactions through the first quarter of this year, and introduce new regulations to control the issue in the second or third quarter, Bloomberg reported.
Flipping was seen as a major factor behind Dubai’s previous property bubble, which burst in 2008 causing prices to crash by about 60 percent.
“The move is aimed to stop quick transactions (flipping) which are unhealthy for the market and result in sudden price increases,” Mejren told the Emirates 24/7 website.