Dubai Real Estate News
UAE Property Market Trends and Reviews

"; Sheikh Mohammed bin Rashid Al Maktoum, the Ruler of Dubai, has established Safa Foundation, to own and manage properties and funds assigned to it by the government.

Being a part of its business model, the foundation will take up ownership and manage all funds and properties, including fixed and liquid assets, which could be further invested at the discretion of the foundation.

Dubai is the second largest sheikhdom in the seven member federation of the UAE.

Labels: Dubai Real Estate

"; There has not been any major upturn in the Dubai real estate market, as it continued to remain sluggish during the final quarter of 2009 with lease rates continuing to fall, said the CB Richard Ellis Report.

The Dubai Land Department statistics indicate that the total number of transactions fell 17.7 percent, touching 520 during the fourth quarter of 2009, compared to the same period the previous year.

The lease rates for Dubai residential units recorded a marginal decline in 2010, as considerable volume of new homes reached their final stages of construction, reported CB Richard Ellis.

As for the commercial office space market, the lease rates had already bottomed out, with rents reflecting levels during 2005, the brokerage firm said, while adding that rates in the central business district area will remain the same, as there may not be any major supply in the short-term.

However, new commercial office areas are already seeing high vacancy rates and are likely to see a dip further, as landlords continue to give greater incentive packages when they compete to woo tenants, CB Richard Ellis said.

Even the apartment rates will drop this year, they said.

Labels: Dubai Real Estate, Market Trends

"; The Minister of Economy, Sultan Al Mansouri, today confirmed that the Dubai World debt problems will not affect the projected three percent growth rate for UAE in 201.

Al Mansouri said that it does not really have a huge reflection on the whole economy of the UAE. Taking into account the debt of several other nations across the world, the issue of Dubai World is much smaller in terms of its impact on the UAE economy.

Dubai World debts are small when compared to debts of few other companies, as they are heavier than those of the Dubai Group. The UAE economy is one body and inseparable, Al Mansouri said.

Al Mansouri said that federal government will deal with future Dubai debt issues on a case-by-case basis. He expressed optimism about improvement in the local and world economy in 2010.

The Minister gave his comments when the Dubai World officials held discussions in Dubai with lenders, aiming to restructure $22bn debt. Last week, the Dubai-Government-owned company, helped its real estate subsidiary Nakheel in repaying Dh.15.1bn on a Sukuk or Islamic bond after receiving $10bn from a bond sale to the Government of Abu Dhabi.

Labels: Dubai Real Estate, Economy

"; With the state asking for a standstill on Dubai World's development and its struggling real estate unit Nakheel, the Dubai's already fragile real estate sector is likely to suffer another collapse in prices.

Marina Akopian, Partner, HEXAM Capital, said "Should they effectively default, it can become one of the biggest sovereign defaults, after the Argentinean crisis."

There is no-doubt that it will bear a negative impact on Dubai property market and global property markets on the whole, Akopian said.

The decision by Dubai to seek a six-month reprieve on Dubai World debts which has liabilities of nearly $60bn, spooked markets in Europe and Asia, amidst concern that major international banks are heavily exposed.

However, the restructuring of Dubai World and its subsidiaries could undermine confidence in the nascent property recovery in the emirate.

The real estate prices in the emirate have already fallen by 50 percent since its peak. But, the prices had shown signs of modest recovery in the recent months.

Leading property consultancy, Colliers International, had reported it's first-ever increase in residential prices ever-since the market plummeted last year.

Prices for residential properties that were kept open for foreign investments saw an increase of 7 percent during the third quarter, the report said.

Nakheel had borrowed billions to build major projects such as the Palm Islands. The $3.5bn Islamic bond due in December was a focal point in determining if Dubai can re-pay its debts.

"The Dubai World announcement could play into investor psyche. It sends strong signals to people that Dubai is yet to recover from the crisis," said Saud Masud, Senior Real Estate Analyst at UBS. The move also seems to have affected the sentiment of foreign property buyers who helped fuel the boom.

Early this month, UBS reported that property prices in Dubai could decline by 30 percent over the next 18 months and it may take another 10 years to get back to its peak levels.

Masud agreed that although the bank is unlikely to change its estimate for the drop in prices, further fall could happen sooner than anticipated. This kind of crisis brings fundamental weaknesses to the surface faster, and this could leave its impact in the sector within next six months or so.

According to UBS, one of the major concerns for Dubai real estate is the "funding gap" to complete properties that already began and on which the investors are defaulting.

Bank estimates indicate that $11bn is required to complete an expected 40,000 residential units by the end of 2010. The Head of Asset Management at Dubai-based Rasmala Investments, Eric Swats said that liquidity had begun returning to the property market, but, the market will now be under pressure as the UAE-based banks will try to limit their exposure to Dubai World.

Further, the standstill is also likely to affect other major developers such as Emaar Properties, Union Properties and Deyaar, as Nakheel may not be a standalone entity in the long run, Masud said.

Labels: Dubai Real Estate, Nakheel

"; Dubai Investment Park (DIP), the largest mixed-use development in UAE, and a subsidiary of Dubai Investments PJSC, has announced the launch of state-of-the-art medical center to offer comprehensive healthcare services to its residents and employees at the Park.

The facility, worth Dh.55mn, will include several medical clinics, including general clinics, ophthalmology clinics and dental clinics, apart from round-the-clock emergency service. The medical center will be a four-storey building, with two basement floors and a rooftop gym, spreading across a total built-up area of 20,853 sq mts.

The General Manager of Dubai Investments Park, Omar Al Mesmar, said that the entity is committed to the welfare of its residents and tenants. DIP is continually seeking to find ways to support the growth of companies and improve the daily life of people living and working at the Park.

With this new medical center, residents and employees at the Park will have easy access to quality healthcare services, including 24-hour emergency service. Well-qualified physicians and medical professionals will be employed in the clinics, equipped with latest medical technologies, Al Mesmar said.

The Al Arif Contracting Company, based in Dubai, will be awarded the contract for construction of the medical center, which will be ready by end of next year.

The Dubai Investments Park is the largest business and residential community in the Middle East, with more than 1200 companies. The Park, by itself, is a self-sustaining city within a city, spreading across 32mn square meters, comprising three zones, commercial, residential industrial and educational.

Labels: Dubai Real Estate

"; The prices of housing in Dubai is slowly returning to pre-2007 levels and indicates a vintage year for real estate investments in 2010, claims a leading industry report.

The worst part of the economic meltdown is generally believed to be over, and investors are full of cheer and looking forward to 2010.

Most of the investors in 2010 will be those who ensure that their assets are realistically priced, professionally managed, and will offer long-term stable liquidity, said a recent report by Jones LangLa Salle.

The MENA region was the last to feel the pinch of global economic meltdown, with property prices falling up to 50 percent in few areas in the past year, but, its real estate market was the fastest to cope with the economic crunch.

With the financial pressures beginning to ease, the sale activity is likely to pick-up marginally in 2010 and this will a psychological boost for investors, thereby increasing market confidence. The investors with sufficient cash too invest will benefit immensely, with the low sale prices, almost equivalent to the 2006 levels, said Matthew Green, Head of Research and Consultancy, CB Richard Ellis.

The report mentions that investors are now happier with the state-of-the-market during recent months. This sunny optimism is primarily driven by the overall economic strength derived by hydrocarbon-based economies.

Qatar, Saudi Arabia and Abu Dhabi property markets will be among the first to recover in the region, with stronger economic fundamentals and government initiatives. These markets will see greater increase in performance and pricing during the coming year.

Dubai, in particular, is likely to grow at a steady pace of four to six percent per year until 2015. Investors are considering Dubai to be the regional leader in terms of city competitiveness and real estate infrastructure, says Brendan Coakley, Managing Director at Chesterton International.

The success of Dubai in the past comes largely from its name being built as a city with good infrastructure. However, concerns still remain about the availability of capital for real estate purposes and supply-demand dynamics. The lack of liquidity and resentment on the part of few financial institutions to resume lending is proving to be a barrier for the Dubai Market.

However, taking into account the huge volume of new stock either completed or in pipeline, and combined with minimal levels of demand, the supply-demand imbalance is the main issue for the future recovery of the market, Green said.

Therefore, in future, there is increased need transparency and honesty on the part of developers, brokers and investors themselves.

Labels: Dubai Real Estate, Market Trends, UAE

"; The dropping rental prices in Dubai offers much respite for expatriates, seeking to escape from the high prices in Abu Dhabi, and helps in luring back residents who had fled to the northern emirates in search of cheaper accommodation last year, reveal experts.

The economic strength of Abu Dhabi has come to Dubai's aid, not only at the federal level, but at residential level, too. Abu Dhabi's infrastructural development, high prices, coupled with shortage of supply, have all led to more people moving in to New Dubai, much to the commercial benefit of Dubai, says Mohammed Nimer, CEO, MAG Group Property Development.
Initially, the growing rental prices in Dubai had forced expats to move out to places like Ajman, Sharjah, and Ras Al Khaimah, but now, with the sharp fall in prices, they are tempted to come back, Nimer said.

Single bedroom apartments in the Jumeirah Lake Towers or Dubai Marina, are now renting out for Dh.60,000 to Dh.70,000, which is a distinct Dh.30,000 less than last year. Therefore, it is not surprising that these localities have become more appealing to mid-income budget groups.

Meanwhile, the Leasing sales still continue to tick in Dubai. The Director-Commercial Division at Better Homes, David Macadam, revealed that the company has seen 400 leases in Dubai in May, compared to 200 to 300 per month in 2008. One-third of these are new entries from Europe, UK and the US, who were mostly mid-level managers, while another one-third were from outside emirates and a third were residents who were shifting internally with drop in prices.

Most important, the real estate sector in Dubai is showing strong signs about residential sales gaining momentum, and is drawing more genuine buyers, rather than speculators of previous years.

However, in the opinion of Nimer, the general picture will be lot clear after Ramadan. At present, Dubai and Abu Dhabi has gained momentum, although there are few projects that stuttered in recent months, although the ripple effect will be felt mostly in the outlying Emirates.

Even in the northern emirates, it is clear that several projects are being radically modified owing to investor worries surrounding power supplies. The projects are met with uncertainty, and these cannot fall back on leases with real confidence, while there are negotiable rents in several areas of Dubai, Nimer concluded.

Established in 1978, the MAG Group has grown into a multinational organization with 18 offices in eight countries including Middle East, Asia and Europe.

Labels: Dubai Real Estate, New-Dubai

"; Dubai is now the first city in the Gulf region to launch the world-famous Lock Box System, aimed to introduce advancement to the real estate brokerage business in the UAE.

The system, one of the most popular products in the US and in the rest of the world, was introduced by Centurion Lock Box Systems in Dubai last week.

The product, GE Supra Real Estate Lock Box System, enables real estate agents to access several properties and streamline the process of showing properties for clients without hassle.

The system solves several challenges that real estate agents face when showing properties. Agents would no longer lose sales, as they can access any property easily and conveniently, said Usman Ghani, Managing Director, Centurion Lock Box Systems.

It also enables agents to show more properties as they won't have to hunt for keys or wait for someone to grant them access, Ghani said.

Centurion, the authorized GE Dealer for this system in the country, will offer training to brokers as the product is being introduced for the first time.

Despite the slowdown in real estate sector owing to global economic crisis, Ghani expressed confidence that his company will achieve the preliminary target set for the sale of the newly introduced system in the country.

Few leading brokers in Dubai have already placed orders for 1000 systems and the firm is confident about selling about 5000 systems per year.

On achieving good sales in UAE, the company plans to introduce the system to other Gulf States too.

The GE Supra lock box system has been of much use by several real estate brokers and agents in the US and in the rest of the world for several years now.

The ease and rugged reliability that the system offers, has made it the most used lock box system in the world. Currently there are about three million Supra Lock Boxes in use. With about 50,000 new property units likely to arrive in the market within next two years, this system is hoped to facilitate the brokers in dispose of these units quickly, agrees Ali H. Zaidi, CEO, Centurion Real Estate Brokers.

The salient features of the product are email notifications, Display Key, Supra iBox, USB cradle/charger connected to the Internet.

Labels: Dubai Real Estate

"; According to a JP Morgan report, a surplus of 31,000 residential units could be recorded in Dubai, mainly due to the decline in expatriate population, while the shortage of units in Abu Dhabi is hoped to rise to 28,000 by the year-end.

In the short-term, the non-residential sector in the UAE will continue to be under pressure, owing to global financial crisis. However, historical shortage of both retail and commercial space in Abu Dhabi has kept tab against fall in leasing rates well below Dubai, reveals an investment bank report on MENA (Middle East North Africa) real estate.

Ever-since its peak during mid-2008, the average transaction volumes are down by 60 percent during the first half of 2009, compared to that during same period in 2008. Despite the slight pickup in transaction volumes recently, the supply overhand in Dubai property sector will touch 28,500 by end of the year, because of the modest economic forecast and negative population growth estimates, JP Morgan said.

Furthermore, after 2009, the JP Morgan says that the forecast of 3.5 percent population growth for Dubai is unlikely to absorb the surplus residential units, which according to Colliers International, will total to 25,000 per annum in the next three years.

However, given Dubai's large infrastructure investment, the city's positioning which makes it accessible to neighbouring economies out of which few are facing economic challenges, and Dubai being a liberal tax-free business-friendly destination, a surprise demand recovery from regional investors, exposed to less stable geo-political environments, cannot be ruled out, the Bank concludes.

Contrastingly, the short-term supply of homes in Abu Dhabi is fairly limited. The high occupancy levels are unlikely to ease from near 100 percent any time soon, the Bank said.

Labels: Dubai Real Estate, Latest News

"; Residential prices in Dubai fell by 24 percent during the second quarter, from the previous quarter, although at a comparatively slower rate, inline with improving global property markets, the Landmark Advisory said in its latest report.

In Abu Dhabi, however, the prices fell less during the same period, as the emirate continues to tackle the global downturn better than its neighbour.

The average selling price for villas in Dubai dropped 24 percent, while that of apartments fell 17 percent in the second quarter. During the first quarter, however, the prices of villas and apartments fell by 32 and 23 percent respectively compared to the fourth quarter of previus year.

Dubai property sector has been hit hard by the global economic crunch, but the improvement seen in more mature markets such as the US and Britain, comes as a happy sign to investors.

Residential prices in Dubai is hoped to stabilize by the fourth quarter of this year, after falling 9 percent from the previous quarter, Colliers International, mentioned in its report.

Rents of villas in Dubai fell by 19 percent, touching Dh.220,350 during the second quarter, while that of apartments dropped 23 percent touching Dh.129,900. The volume of transactions of villas and apartments increased 25 percent and 20 percent respectively, as several people relocated from Dubai to Abu Dhabi and Sharjah.

In Abu Dhabi, although the selling prices of apartments fell by 11 percent, and there was an 8 percent decline in villa prices, during the second quarter, compared to previous quarter, the prices are unlikely to fall further, the report confirms.

The rate of decline slowed considerably, as prices for both categories fell 20 percent and 30 percent respectively during the first quarter from the fourth quarter, Landmark said in May.

Rents in apartments and villas fell by nearly 10 percent during the second quarter. With more supplies likely to enter the market, rents for villas and apartments are likely to fall considerably, says Landmark Advisory, part of real estate brokerage and consultancy Landmark Properties.

Labels: Dubai Real Estate, Property Prices

"; The already suffering property sector of Dubai is at risk of further price decline with the onset of seasonal summer and Ramadan slowdown, and with more expatriates leaving the emirate, coupled with oversupply, said Moody’s Investors Service on Tuesday.

According to Assistant Vice President and Lead Analyst for Emaar Properties, Martin Kohlhase, the oversupply in the market is unlikely to be resolved in the next one year, given the dynamic supply-demand developments, which would result in prices remaining sluggish or falling further, than over the past nine months.

The booming property market of Dubai had come to a stand-still with the onset of global economic crisis and drop in oil prices, putting an end of the economic boom in the gulf region.

Further, a Reuters poll showed that house prices are likely to drop another 20 percent in 2009.

Several thousands of jobs have been slashed and the redundant expatriates are likely to leave in the near-term, provided they find fresh jobs, Moody's pointed out.

Several expatriates, who were already made redundant, were permitted to stay back until the end of school term in June, without their visas being revoked within the usual 30-day period.

Furthermore, the large-scale lending is yet to resume and property developers have had to face several buyer delinquencies.

Moody's had placed the long-term issuer rating of Emaar and Dubai Holding Commercial Operations Group on review for a possible downgrade on 30th June, following announcement of merger of the two groups.

The merged entity will create a new giant in Dubai real estate market, with unrivalled access to a sizeable land bank. Several other factors such as the opening of Dubai Metro, inauguration of Burj Dubai, and the beginning of summer period would shape Dubai's residential property market in the near future, and this could lead to greater differentiation within Dubai's residential areas, from which DHCOG's and Emaar real estate divisions could benefit, Moody's said.

Labels: Dubai Real Estate, Market Trends

"; With rents and prices stabilizing, few areas in Dubai are seeing early signs of recovery.

Among the main areas seeing the road to recovery are Dubai Marina, Burj Dubai and Emirates Living. This is largely due to their higher quality and the fact that they are located in a completed community project that seems attractive to people commuting to Abu Dhabi.

Those working in Abu Dhabi are increasingly exploring residential units in New Dubai, due to its proximity to Abu Dhabi. Also tenants are seeking units in community developments.

There is much demand for single and double bedroom apartments and for triple and four bedroom townhouses, said Andrew Chambers, Managing Director, Asteco.

Other established communities such as Downtown Burj Dubai, Jumeirah Beach Residences, and The Springs have received inquiries from tenants, and therefore have been less affected by the rent decline.

The house prices and rent rates in Dubai have considerably reduced during the last quarter reveal the latest industry reports. The apartments and villa prices across Dubai reduced by 15 percent and 13 percent, respectively, on an average.

With the relaxation in finance restrictions and stability in property prices, the Palm Jumeirah has recorded a surge in sales prices for its apartments and villas by 7 percent and 20 percent respectively, during the second quarter, says an Asteco report.

According to the Head of Research and Consultancy at CB Richard Ellis, Matthew Green, the current situation of oversupply, together with weakening demand, both in local and international market, implies that landlords will have to strive extra hard to secure tenancies, contributing to further reduction in rents.

A four bedroom garden homes on The Palm is now being sold for Dh.6.5million, down from the earlier Dh.14million sold during September 2008, the agents said, during the first quarter.

During the second quarter of 2009, the average rent for studios eased from Dh.61,500 to Dh.45,000, rents for single bedrooms fell from Dh.93,000 to Dh.78,000, while that for double bedrooms fell from Dh.132,000 to Dh.107,000. The triple bedroom apartments rents dropped from Dh.185,000 to Dh.149,500.

The average rent for villas were Dh.119,000 for double bedrooms, Dh.176,500 for triple bedrooms, Dh.233,750 for four bedrooms and Dh.277,00 for five bedrooms.

Labels: Dubai Real Estate, Market Trends, Property Prices

"; Several distressed funds are waiting to jump into Dubai's real estate market and invest in few of the attractively valued assets, industry experts revealed on Tuesday.

Although no distressed funds are yet active, the few that are in pipeline will increase confidence in the market and rescue defaulted assets.

The Chief Executive Officer of Investment Boutique, Heather Wipperman, said although there are direct investments, it is taking much longer, as people hesitant and cautious. Several distressed funds are ready to enter the market.

When the fund is raised, it goes in and buys assets under default. The fund then holds these assets until the market recovers and then releases back, said Marwan Shehadeh, Managing Director, Al Futtaim Capital.

Shehadeh continued that funds are a hot subject now. People are finding it difficult to get into investments at this time and now with the onset of summer and Ramadan, the major bonds are coming due, so people are waiting to see what happens there.

Traditionally, distressed funds get effective when the market has bottomed out. Experts in Dubai feel that property market is yet to hit the bottom or is very close to it.

Property prices in Dubai have dropped to levels never seen before, and although there have been cases of distressed sales and property auctions; the general sentiment in Dubai is more buoyant than in previous month.

The terms distressed asset is applicable to properties whose value is much lower than it should be. The sales come from the default rate. The real distress happen when developers stop easy payment plans and those who cannot pay becomes the opportunity for the fund, explained Markus Giebel, Deyaar Chief Executive.

Although the distressed sale numbers are dwindling in Dubai, real estate activity requires a serious kick-start. It will do good to the market, to get to a point where the funds can acquire a complete portfolio or half portfolio, buying in bulk, as they will be able to get considerable discounts. With several initiatives, there are no considerable distressed funds that are active today, Wipperman said.

Labels: Dubai Real Estate

"; The prices of properties located close to metro stations in Dubai are already beginning to rise, marking the first signs of a Metro effect on the property market, reported analysts in Dubai.

The Jumeirah Lakes Towers (JLT) on Sheikh Zayed Road, located directly opposite the Dubai Marina station are being sold for 6.5 percent more than units in buildings located further away. The difference in prices could equate to tens of thousands of dirhams, pointed out a Dubai-based real estate agency.

Several other agencies have also reported to have been receiving enquiries about properties located in proximity to the metro stations. The trend implies that with just three months left for the opening of Metro's Red Line, home buyers are already beginning to take into consideration the ease of transport when choosing their home.

In the rental market, few mentioned that there was a clear difference in values, which would probably emerge only after the lines open on September 9th. Several residents feared that landlords would take advantage of the locations in proximity to the Metro and raise rents.

The Sales Director at Landmark Properties, Michael, mentioned that units at Indigo Tower, a JLT building near the station, was going for around Dh.800 per square foot, compared to Dh.750 across similar-quality buildings in JLT.

The Head of Property Management at the Dubai-based property portal Gowealthy. com, Andrew Delport, mentioned that units in proximity to the Metro will be the first to recover, once the system was up and running.

Delport considers Dubai Marina to have a similar trend, with the Metro on the Marina side of the freeway. The tenancies are more vibrant here than in other places, offering good value for money.

Dubai Marina is the most popular area for leasing, accounting for 30 percent of new annual lease contracts in Dubai, according to the second quarter 2009 report by Landmark Advisory.

A sales consultant for powerhousedubai.com, Ian Hainey, mentioned that estate agents have been keen to highlight any available access to the Metro. However, so far there has been no drastic difference in rents between properties near the Metro and others. The uncertainty would last until it is known which stations would exactly open on September 9th, and that would have an impact on decision-marking of prospective tenants.

Labels: Dubai Real Estate, Latest News, Property Prices

"; Dubai World yesterday announced that all operational management, pertaining to real estate activities of few of its companies, are being consolidated for better accommodation of market conditions and to maximize resources and expertise.

The real estate development and property transactions of Dubai Maritime City, Dubai Multi-Commodities Center and Leisurecorp will be managed by Nakheel. The changes, however, will have no impact on the daily business of the companies.

The consolidation planning is on currently, with assistance from Consultants, Alix Partners, and the process will be completed during summer.

Dubai World, the major player in real estate businesses in Dubai and across the world, has invigorated the industry, re-defining whatever possible through its companies' efforts and dedication.

Dubai World, in its statement, mentioned that it is extremely proud of its achievements, and aims to continue to be a leader in real estate business and hopes that the current decisions will help in meeting the requirements of customers in a better manner.

Dubai World is Dubai government's investment flag bearer, with a portfolio comprising the world's most renowned companies such as DP World, Drydocks World & Dubai Maritime City, Nakheel, Leisurecorp, Economic Zones World and Istithmar World.

Labels: Dubai Real Estate

"; There are indications of rent stabilization in Dubai, with few landlords still experiencing good demand for higher quality rented homes in prime locations, a leading property consultancy reveals.

Landmark Advisory Group, one of the leading real estate consultancy companies in the region, yesterday released its sales and leasing price maps for the Dubai market.

The Dubai price maps, continues to show evidence of 180 degree turnaround from the earlier supply-driven property market to a demand-driven property market, although, on an average, the consultancy hopes to see further decrease in Dubai rents for the third quarter of the year.

The latest price maps from the consultancy, indicate the distressed sale opportunities have largely been exhausted, as sellers are reluctant to lower existing prices, and buyers sometimes are even paying increased rates for their sought-after residential developments, as only limited homes are available.

According to Director of Research, Jesse Downs, at Landmark Advisory, the Dubai property market shows distinct signs of market stabilizations, and return of confidence from end-users. In a few cases, even the sales prices have increased. This is mainly due to the dynamics of each development.

Small villa developments with limited supply have tapped into sufficient value recognition among end-users with regard to location, layout, and amenities and build quality. These are among those residential developments experiencing increases in prices, such as the Green Community and the Jumeirah Islands. A similar trend is also seen in leasing rates for few villa communities.

However, the price lists indicate a steep decline in apartment prices. The economic downturn, together with large quantity of high-rise apartments that were completed last year, has resulted in over-supply in this sector.

A noteworthy element in the price maps by Landmark Advisory is the constant refinement of price differentiation, which was earlier based on factors such as location, view and quality of finish.

Off-late consumer decision making is based on factors such as environment. Those in proximity to high voltage power lines are going for lower rates, than similar units located away from power sources.

Labels: Dubai Real Estate, Rentals

"; Dubai Real Estate Regulatory Authority (RERA) has frozen the accounts of several major property developers, until such time that they prove that construction is in progress, and that the land has been properly registered.

This move by RERA to freeze escrow accounts of developers is being done in the interest of property market, as it is grappling with fall in prices and shortage of lending.

All money made from the sale of off-plan properties must go into an escrow account, and be used solely for property construction.

The Chief Executive of RERA, Marwan bin Ghalita, said that the developers will have to provide technical reports detailing the progress of construction prior to withdrawing money from the accounts. Payments will be linked to progress made in construction.

The developers will also have to prove to RERA that they have registered investors' rights with the Land Department.

RERA is yet to reveal the number of accounts frozen.

Labels: Dubai Real Estate, Off-plan

"; Dubai plans to establish a standard property contract, which would form the norm for all real estate transactions. This is being done with the sole aim of avoiding small print misleads.

A senior official at Dubai Land Department mentioned that having a basic contract would be the norm, and that it would be difficult for buyers and developers to wriggle out of contracts or add fine print to current contracts.

A senior legal advisor at Dubai Land Department, Emmad Eldin Farouq, said that it would provide a clear, transparent guide to the rights of both developer and buyer.

The contract is ready, and we are awaiting directions, Farouq revealed. These will be standard contracts, to be given for all properties.

The contracts will remain unaltered, whether completed or incomplete. Any contractual agreement will have to be simple, clear and transparent. There are too many small prints in contracts now, Farouq said.

There are chances that developer can make additions to any contract, as different developments have different regulations. But the basic contract will remain the same, said Assistant Director-General of Land Department, Mohammad Sultan Thani.

According to the Lawyers, the main points of contract will remain the same, but more clauses may be included. The Partner at Hadef and Partners, Michael Lunjevich, said the standard contract would be for completed properties, signed between the buyer and seller. But, an element of freedom is necessary in a contract. Therefore, it will have standard terms as per the market norms, and thereafter, any alterations will go to a separate section, to avoid any confusion.

A single basic contract will seem easier for buyers and developers, reducing the number of disputes.

Dubai's RERA, together with the Land Department are trying hard to make the real estate sector more secure, but, are insisting that there ought to be a large onus on the buyer to read contracts in full.

During the peak times, several investors entered Dubai market with the sole intention of purchasing property and concentrated less on the contracts, than they would otherwise do so in more mature markets.

"The contract should be clear, and people should read them carefully," Thani pointed out.

Labels: Dubai Real Estate, Property Law

"; The Head of RERA (Real Estate Regulatory Agency) in Dubai, Marwan bin Ghalita yesterday revealed that Dubai is considering cancelling 27 projects.

The decision about this issue would be taken by the end of the month. The projects likely to be scrapped off include third party projects handled by sub-developers that are scattered across Dubai.

Ghalita revealed that 25 percent of projects will be cancelled in Dubai, owing to global economic turmoil. Last week the RERA and Dubai Land Department had established a committee to cancel projects in the emirate that are not feasible.

Prices of properties dropped 41 percent during the first three months of the year, as per the report by Colliers. The drop in property prices has already led to project cancellations in the region, worth billions of dollars.

More than half of the construction projects in the UAE are worth $582bn and more. These have been put on hold currently, either following a request from developers to cancel projects or, due to complaints from project investors.

Labels: Dubai Real Estate

"; The Dubai RERA (Real Estate Regulatory Agency), together with ARRA (Ajman Real Estate Regulatory Authority) has entered into a joint-agreement to develop a unified strategy to develop the property sector.

The agreement underscores the need to build a unified strategy to develop, organise and modernize the activities pertaining to real estate, including developers, brokers and property management companies, and the workforce of such companies. The agreement also emphasizes the importance of strengthening the co-operation ties between the two organizations.

The agreement was signed by Marwan bin Ghalita, the CEO of RERA and the Director-General Omar Al Barguthi of ARRA, in the presence of Sultan bin Butti, the General Manager of the Land Department.

The agreement signifies a major step ahead in the real estate sector. It focuses on developing a unified vision in developing, updating and streamlining all real estate activities, companies and individuals working in brokerage offices and real estate management.

The Bin Ghalita said that apart from the said, the agreement will regulate the work of brokers and real estate advertising between the emirates, in addition to establishing a unified database in Dubai and Ajman with all necessary information pertaining to the brokerage business, real estate development and management.

This agreement re-iterates the strong relationship between ARRA and RERA, said Al Barguthi.

Labels: Ajman, Dubai Real Estate, Property Law

"; The property watchdogs in Ajman and Dubai have got together to identify the blacklisted developers and agents, and hence have agreed to co-ordinate data in both emirates.

An MOU to this effect was signed between ARRA (Ajman Real Estate Regulatory Agency) and Dubai's RERA (Real Estate Regulatory Agency).

The Chief of Dubai RERA, Marwan bin Ghalita, said that "We will share the same database of agents and developers. If any developer is blacklisted in Dubai, it will also be reflected on their database, and they will be aware of it."

This move follows receipt of complaints that estate agents were working in both emirates, but have been registered with only one.

"We will regulate this kind of activities between the agents too. The establishment of common database will give developers and regulators and investors a clear picture of the market" Ghalita said.

The database will be made available online for people to view. The database is almost ready and will be released soon, said Omar al Barguthi, Head of ARRA.

Labels: Ajman, Dubai Real Estate, Latest News

"; The Dubai House Price Index for first quarter of 2009 released by the leading global real estate consultancy, Colliers International, has indicated a drop of 41 percent during the first three months of this year.

The index has been compiled using mortgage transaction data from financial institutions accounting to 60 percent of the mortgage market in Dubai. It demonstrates a 34 percent decline year-on-year between first quarter of 2008 and first quarter of 2009.

The property prices in the emirate had returned to the levels equivalent to that during Q2 2007, the report pointed out. When compared to other markets in the Gulf, the global crisis has had a huge impact on Dubai, mainly due to high level of integration with global economy as a regional hub, and the wide speculation in property assets before the market's peak during third quarter of 2008.

Speaking about the Q1 2009 report, the Chief Executive Officer of Colliers International, John Davis, said that the negative sentiment is a major factor contributing to decline in the index and availability of finance too has a major impact on the market. The end-users are more concerned about job security, and hence are hesitant to enter the market, despite the finances being open for them.

Looking at the brighter side of things, the index remains unaltered as in March 2009. But, it is too early to predict whether the halt in decline of the index can be sustained during the quieter summer months, Davis said.

The House Price Index takes into account the price trends achieved for completed properties, as against the properties that are still under construction. The results obtained by including the Burj Dubai development in the results, the index indicates that completed properties fell 31 percent, while the properties under construction fell 56 percent. Keeping aside the Burj Dubai, the completed projects fell 32 percent, while those under construction fell 51 percent.
Mortgage lending is beginning to revive in the emirate, with several financial institutions re-entering the market, Davis pointed out.

Labels: Dubai Real Estate, Market Trends, Mortgages

"; The correction in the property prices in Dubai will open up several productive investment opportunities in the sector within the next 24 months, revealed a report by Jones LangLa Salle, the real estate advisory firm.

The recent Investor Sentiment Survey carried out by the company reveal that with considerable adjustments already made in the capital and rental values already in place, during the next two years, Dubai will surely be one of the most attractive real estate investment markets in the region.

The property and construction sector in Dubai is undergoing a correction, with several large scale projects either on hold or scrapped altogether, and the prices are easing. However, developers in Dubai are considering this period as an opportunity to re-assess developments and re-focus on end-user elements, such as increased flexibility in payment plans.

The price adjustment will help Dubai immensely, as investors are attracted towards fairer values and better yields. Early signs of activity are already visible, the Survey indicates.

The government too has offered financial assistance by issuing $10bn bond. This is believed to help real estate firms immensely, and this will help in driving up investor sentiments, in a major segment of Dubai's economy. Further, the government has also pledged to continue with infrastructure spending to complete all major projects.

From a regional perspective, the Jones Lang LaSalle report points towards optimism among investors, over the prospects of Middle East Real Estate Sector, a major driver of the market.

Labels: Dubai Real Estate, Market Trends

"; The first-ever mass auction of Dubai properties happened last week.

Earlier several Dubai properties were being purchased by investors in the UK. However, with the Pound value plunging to record-lows, mortgages slowed down, and several of the developments in the city were put on hold, traditional methods to showcase developments to Britons are no more successful.

The Managing Director of Properties Dubai, Asif Choudhary, agreed that they have stopped receiving any inquiries for properties, and hence planned a way out. Auctions are a great way for generating big business in the UK.

The Sales and Marketing Director at Hircon International, Manish Bhatia, said that for any property market to grow stronger it needs to be changed hands from someone who is financially weak to the one who is financially strong.

The off-plan properties were hardly generating sales, except for that of RAK Properties. With several developments in Dubai, being put on hold, British investors were questioning if certain projects, would ever get completed.

Although the bargaining element when buying at an auction is justified, keeping the current scenario in mind, those who listed Dubai Properties were not prepared to given them away.

According to Choudhary, there are two types of sellers in the market currently - those operating at a loss but remain financially stable, and also the overleveraged who would sell for less. But the latter is more than the former in the market.

Bhatia points out that making sales at this point does not indicate a market recovery, and emphasized that for this to happen, lending too, may have to ease.

For a recovery to happen, certain other developments will have to be considered. People may purchase at cheaper prices, but that may not be a sign of recovery. One may have to wait until the lending eases up, he said. Bhatia emphasized that the auction format is an effective strategy, and it would be good to carry out such a format in Dubai.

Choudhary agreed that the market for selling Dubai Properties to people in the UK is yet to recover, but auctions may help in maintaining interest at the movement.

Labels: Dubai Real Estate, Latest News

"; Landmark Advisory has compiled and published an unofficial list of average rents across Dubai, which will be an alternative to official rental index.

This unofficial index gives an updated scenario of the market and will be published every two months. It will also serve as a guide for landlords and tenants, apart by the official index published by the RERA (Real Estate Regulatory Authority).

RERA had confirmed that it would release an updated version of its latest rental guide in April. According to RERA, the new index, due to be released this month, will show a 10 to 15 percent decline in rental prices.

However, the index published by Landmark Advisory, shows a decline of up to 15 percent in rentals.

So far, residents who felt they were highly charged in terms of rent, used to file cases directly to the Rent Committee in Dubai Municipality. But, now the rental index may help in resolving such disputes.

But, Neil, CEO of Landmark Advisory has clarified that the index by Landmark Advisory cannot be used for settling disputes, as people would still require an official index to settle legal cases.

But, this particular index by Landmark, may act as a guide for tenants seeking for rent in various locations of Dubai, he said.

Labels: Dubai Real Estate, Rentals

"; It is still uncertain, if Dubai's RERA would update its rental index in April this year, as was previously announced, or would just expand its current version of rental index, by including the areas left our in the original survey, reports AME Info.

During a press conference in Dubai, during the end of February this year, RERA had indicated that its rental price index would be updated and re-released early this April.

The announcement was made following the disputes that occurred after the release of the first version of Dubai rental index, which was compiled when the rents were at their peak in 2008, much before the slowdown hit the emirate. This version of the index was released in January this year, following which, there were arguments about the rates in the index not being in accordance with the post-slump market.

It has now been learnt that instead of completely updating the current index figures in April, RERA may just fill in the averages for the areas and bands, not covered in the original chart.

An official at RERA is told to have mentioned that there will be no changes to the existing figures, and RERA is only updating the areas that were not mentioned in the last index, and a new survey would be conducted this summer.

This implies that rental contracts would be measured against average figures that bear little resemblance to prevailing market rates.

The Managing Director of Better Homes, Ryan Mahoney, who spoke to AME Info, agreed about the huge drop in rentals in Dubai, and urged RERA to regularly update the index, and maintain it inline with the fast-changing market, else, people may stop referring the index.

Labels: Dubai Real Estate, Rentals

"; Dubai has formed professional groups and mediation center to resolve the numerous disputes arising among investors and developers, as the property sector suffered under the impact of global economic turmoil.

The initiative, which is a joint-effort by the Dubai Land Department and Dubai's RERA, has been aimed at integrating the main parties in the property sector into a regulatory framework, under the leadership of RERA.

A mediation center was formed to resolve the disputes in a quicker and efficient manner, away from the Property Court. At present about 500 or more such cases are said to be awaiting the court orders. The center has resolved 95 cases over the past month.

This idea has been welcomed by the industry so far. Next month, property investors, developers, evaluators and brokers will form groups within RERA. These committees will meet on a regular basis to review and develop a regulatory strategy to create plans and manage conflicts in the property sector.

Off-late, groups of investors have been filing petitions to developers regarding cancelled projects. Even last week, hundreds of investors appealed to Nakheel's Dubai sales center, urging the developer to reschedule its payment plans for villas on Palm Jebel Ali, due to delays.

Emaar has revealed its plans to put on hold three of its projects, following a petition from the Emaar Investors Group. Both individuals and homeowners' associations form a part of the new investors' community within RERA.

This is the latest among the measures taken by the Government to increase market confidence. Last month RERA had announced that the agency would begin publishing monthly progress reports on each of the 695 projects with Escrow Accounts. The progress on the developments would be published online with photographs about progress in construction.

Labels: Dubai Real Estate

"; A leading property portal in the UAE, propertyfinder .ae, today released its findings, which reveals the top locations in Dubai for rent and purchase during the current year.

According to the findings, both buyers and renters are moving out of traditional residential hubs to areas such as the Jumeirah Lake Towers, The Springs and Discovery Gardens, with new communities high on priority list for both buyers and renters.

The findings were based on approximately 500,000 unique page visits to the website during the month of Feb'09. This highlights the current activity in the Dubai real estate market, despite the slowdown.

The Head of Marketing at propertyfinder.ae, Marcello Sambartolo, when speaking about the survey results, mentioned that the survey brought out some interesting statistics, wherein a real transition in rental interest towards new residential areas such as Jumeirah Lake Towers and Discovery Gardens have been observed, where the rents are more competitive. The data also reveals that end-users are still looking to invest in Dubai properties, which is now offering opportunities to capitalize on the recent drop in housing prices.

This is the right opportunity to locate good property investments. The research would help in locating the best deals and being aware about the new communities coming on stream, Sambartolo said.

The survey is generated out of user-generated figures on the property portal from 1st to the 28th February 2009. The figures are based on 644,148 page views and 492,838 unique page views on the website. The figures have been verified by Market Intelligence, Nielsen Site Census and Google Analytics.

The hot zones as revealed by the website are as follows:

Labels: Dubai Real Estate, Latest News, Market Trends

"; According to experts, mortgages in Dubai would be easier to reach, with the property prices likely to drop to mid-income levels. Applications from potential buyers seeking mortgages have dropped considerably in recent months.

Property prices are plummeting throughout Dubai, thereby bringing about a ray of hope for those that were earlier considered out-priced. But the huge mortgage requirements and large deposits are keeping them away from easy reach.

The Managing Director of Almas Capital, Barmak Besharaty, when speaking during a Cityscape networking forum, yesterday, mentioned that Dubai would surely be a better place to live in, once the families can afford to buy or rent. This is likely to happen when the real estate assets align with the mid-income margin in the country.

Until a few months back, property in Dubai was meant only for the wealthy. Several developers were offering luxury lifestyle, which were out of reach for majority of the common population. Developers were pushing up prices of their properties, to keep up with the speculators and market forces, aiming to make money.

However, at present, one can get a decent mortgage in Dubai, if they are free of car loans and personal loans, and have atleast Dh.300,000 in a bank account, as a handy deposit, and ideally, draw a huge salary, said Shohail Zubairi, Chief Executive of Dar Al Sharia, the Legal and Financial Consultancy.

However, the average mid-income person already has atleast one loan, and does not have several thousands of dirhams as balance in their bank account. Moreover the current mortgage rates are not too attractive either, he points out.

However, in the current situation, even the developers need not bother about building new affordably housing developments aimed at mid-income bracket, as several developments in Dubai that had earlier been branded as luxury developments, now fall within the mid-income bracket.

Labels: Dubai Real Estate, Mortgages, Property Prices

"; The companies in Dubai can expect funds within two weeks time, out of the US$10bn (Dh.36.73bn) which the Dubai Government borrowed from the Central Bank, to help ease the cash squeeze situation in the emirate.

This was revealed by Nasser al Shaikh, the Head of Dubai Finance Department, when speaking during a conference today. The funds, which form a part of the $20bn bond programme introduced last month to help Dubai in meeting the short-term requirements for funding, helped calm down investors, who were worried that the companies may face hurdles repaying debts this year, as the banks were reluctant to refinance loans due to the global credit crunch.

The emirate is yet to decide on how to administer the funds on a case-by-case basis, although Al Shaikh confirmed that the property sector companies would be given special priority. The Economist at Standard Chartered, Shady Shaher, said that although firms outside property sector too, would be eligible for funds, he expects majority of the money to flow into property companies, particularly, those that are partially-owned by Dubai Government.

Several large Dubai-based groups have already applied for funds. Al Shaikh said that the cash flow to the companies, affected by global crunch, would be given based on their requirements.
The Dubai Government is believed to set up a special fund through the Department of Economic Development, to lend a portion of the $10bn to small and medium-sized companies that require cash.

Speaking about the real estate market in Dubai, Al Shaikh said that the finance department would keep bringing out measures to stimulate the sector. The focus in the present situation should be on settling the disputes between buyers and sellers, he pointed out.

As for the current talks between Tamweel and Amlak, the two largest mortgage companies of UAE, Al Shaikh, who is also the Chairman of Amlak, said that the management of both companies were holding discussions about the same with the Ministerial Committee. Although it was thought that the companies were planning a merger, the statement from government officials earlier this week, ruled out the possibility and suggested other options.

However, al Shaikh said that more companies are also planning consolidation, amidst slowdown, although a potential consolidation should make sense to shareholders and to the economy at large.

Al Shaikh also did not deny the likelihood for consolidation between companies in Dubai and Abu Dhabi, either.

Labels: Dubai Real Estate, Latest News

"; Dubai property market will see the advent of about 90,000 new housing units over the next two years, despite the global economic turmoil.

Nearly 32,000 new housing units were completed in 2008, touching the total number of residential stock in Dubai to 253,000.

The Jones Lang LaSalle Report, however, mentions that construction delays and project cancellations will reduce the total announced residential supply by more than 50 percent. About more than half of the announced residential and commercial projects due for completion, during the two years, have been halted or cancelled, due to lack of available funding and ease of demand.

Even top developers, including Nakheel and Meraas have either rescheduled or cancelled few of their major projects. Since the last quarter of 2008, there has been a drop in prices and rentals, by up to 50 percent, depending on the area.

Prices are expected to plummet further, for residential properties, throughout the year, hitting the bottom at 2010, said Craig Plumb. In the meanwhile, the Managing Director of Memon Investments, Ahmad Shaikhani, had mentioned that he expects the UAE property sector to spring back to normalcy within next 8 to 12 months, due to the fall in construction costs.

The report agrees for the need for increased financing options, and the need for implementation of few 'radical measures' by the government, such as removing the link between residency status and employment, clarification of law regarding residency for expatriate buyers of housing units. Such measure may be required to help the market emerge stronger.

Several people are opting to rent out, rather than to buy, as the people are hesitant to buy in a declining market. "It is like catching a falling knife. Nobody knows when the market will stabilize, so it is hard to predict the bottom," Plumb concludes.

Labels: Dubai Real Estate, Residential

"; About 20% of residential units may not enter the market in 2009, due to the current market conditions, say Dubai Land Department officials.

In 2008, Dubai market witnessed entry of 29,319 units this year, and another 31,003 units are likely to hit the market this year. But, in order to balance the supply situation amidst the current financial situation, this number is likely to drop by 20%.

Approximately 70% of housing supply in Dubai is under the control of three government-supported developers - Nakheel, Dubai Properties and Emaar.

There is also a 40 percent decrease in the 43,880 units projected to hit the market in 2010. There is also a 45% drop in transactional value, says Assistant Director General of Dubai Land Department, Mohammad Sultan Thani.

Currently a total of 875 projects are registered with RERA, out of which, 685 projects have escrow accounts, while the rest 180 units are either more than 60% complete or have total bank guarantees. The numbers of developers too have reduced to 427 from 800.

Among the projects announced, RERA predicts that 25% of the projects may have a delayed start, or will be put on hold due to tight market conditions. Another 25 percent of the projects may see a merger of companies, while about a quarter of the projects may be rescheduled. The rest 25 percent of the projects will see a timely completion by 2009 or 2010.

According to bin Galita, controlling the supply may be a good sign, as it is easier to manage, and will render the market only the number of units required.

So far, only two projects have been cancelled. Another 27 projects may have to be cancelled, says Bin Galitta.

Beginning next week, RERA will begin a monthly progress report of various construction projects in Dubai on their website. This monthly report will be for every project with escrow account, under progress in Dubai.

This initiative is hoped to generate confidence in investors about the comfort and knowledge they require about their investments, and help in further preventing investor-developer disputes.

Labels: Dubai Real Estate, Residential

"; Dubai's RERA (Real Estate Regulatory Authority) will announce its new rental index in April, aiming to bring out a more realistic market.

This decision by RERA follows the huge protests over rental values that were included in the original index published by the Authority last month.

The index is more like a guide, intended to help landlords and tenants in Dubai, with approximate rent levels based on various areas in Dubai. The index is actually scheduled to be republished every six months.

The Chief Executive of RERA, Marwan Bin Galita, said that the rents in the emirate have already begun to plunge, and depending on the location, rents could drop from 10 or 20 percent to nearly 50 percent this year, based on the location.

However, owing to the global economic slump, nearly 20 percent of the 31,000 or more residential units may not come on stream this year. A 40 percent decrease in the total number of units projected for 2010, is also likely.

The first rental index by RERA was released in January this year, which caused resentment among tenants, who felt that the rates quoted were based on last year's rents, when rentals were at their peak, before the onset of financial crisis.

Labels: Dubai Real Estate, Property Law

"; Property projects in the GCC (Gulf Co-operation Council), particularly in Dubai, are still being actively pursued, despite the global economic crunch, reports the leading property portal REIDIN.com, which tracks real estate transactions in the GCC.

The portal said that Dubai is still the leading player in the regional property market, with Dh.5bn worth of investments flowing into the emirate in 2008.

About 5.8 percent of worldwide land sales transactions were accounted for by Dubai. Dubai was also ranked the fourth highest in global land sales rankings in 2008. Majority of the GCC investment into the emirate came from Saudi Arabia (Dh.2bn), followed by Dh.1bn from Kuwait, Dh.818mn from Oman, Dh.615mn from Bahrain, and Dh.117mn from Qatar.

The portal mentioned that there is a strong interest in Dubai property sector, despite the projected slump in UAE economy for this year.

The CEO of REIDIN.com, Ahmet Kayhan, said that the property sector is facing a challenging time confronted with issues such as liquidity, threatening investor confidence. However, the trends reveal that the Dubai property sector will still be the busiest with investments and transactions remaining comparatively higher.

According to Kahyan, despite the dim outlook on UAE economy, Dubai property sector will continue to witness constant transactions, and the government will continue its efforts to soften the impact of financial crisis by offering liquidity.

Labels: Dubai Real Estate

"; According to property agents in Dubai, there has been considerable buyer interest for completed properties during recent weeks. Increased transactions are being witnessed with banks regaining confidence, and beginning to approve mortgages.

Past two months, although there hasn't been any viewing, during the past ten days, viewings have picked up considerably, and there is more consumer interest returning to the market, says Ronald Hinchey, Resident Partner, Cluttons.

Another Independent Property Consultants, Sherwoods, says that those planning to buy property now live in the property. With prices to the decline, people are considering affordable homes, says Iseeb Rehman, the Managing Director.

In the meanwhile, Owners are looking out to sell their properties, amidst growing concern over fall in prices, the agents report. Rehman mentioned that Sherwoods made five sales during the past week, in major sought-after areas such as Discovery Gardens, Dubai Marina and Jumeirah Village.

Rehman also mentioned that a growing interest is seen in office space, with more property coming on to the rental market, as owners seek stable revenue stream.

Property Advisor at Choueri Real Estate, Rima Moukarim, mentioned that owners' who have been holding on to property, anticipating a price recovery, can now look for a quick sale. He confirmed that the market is witnessing more sales and transactions.

The Assistant Director General of the Department, Mohammed Thani, mentioned that about Dh.2bn worth of mortgages have been registered with the Dubai Land Department this year. Moukarim said that banks seem more confident about lending. Also, with the banks resuming property lending, it is hoped that they would adopt a less stringent approval process.

In the meanwhile, the property experts have expressed their opinion that the market should offer incentives to lure back buyers and instill confidence by offering permanent residence visas to freehold home-owners.

When people purchase freehold property, it is the duty of the Government to offer permanent residence for the rest of their lives, as long as they own that property, says Hinchey.

Labels: Dubai Real Estate, Market Trends

"; Majority of the villas in Dubai are occupied by Indian nationals, while Britons form majority of apartment owners in Dubai. This is as per the statistics revealed by the Dubai Land Department (DLD).

Out of the total 13,774 apartments registered with the Land Department between the period 1963 to 2008, Britons own 2755 units, which constitute 20% of the units. This is followed by Indians and Pakistanis sharing the second position with 14% ownership. The third in line are the Iranians with 11% ownership.

Indians are the top-most in the list of villa buyers, with 21% ownership, which constitute 932 villas out of 4436 villas registered by DLD. This is followed by Britons with 17% ownership, and 12% ownership by Pakistanis.

UAE nationals hold ownership of only 4% of apartments and 6% villas in the emirate, reveal statistics.

However, when considering the total number of landowners in Dubai, 73% are UAE nationals, while Indians and Britons own only 3% and 2% of the land in the emirate.

Labels: Apartments, Dubai Real Estate, Real Estate News

"; The new rental index is likely to be updated in three months time, in accordance with the current market conditions, revealed a top official in Dubai's RERA (Real Estate Regulatory Authority).

The index, which is more of a guide to landlords and tenants in Dubai, was scheduled to be re-published every six months.

The Chief Executive of RERA, Marwan bin Ghalita, who spoke to the media on Thursday, mentioned that the new index is likely to be published in two to three months time. This initiative comes, when rents in the city have begun to fall dramatically from its peak during mid-2008. The Dubai rental index which has been released now is based on the figures during that period.

Ghalita said that despite the drop in rents, Dubai still offers good rental yields of up to 10% of the value of property, in comparison to 2-3 percent in other countries.

Labels: Dubai Real Estate, Property Law, Rentals

"; Omniyat Properties, the leading Dubai-based property developer, announced that it is focus this year would be on completing the projects launched, rather than considering an expansion outside the emirate.

The Chief Executive of the Company, Peter Walichnowski, said that although it is the long-term strategy of the company to go international, with the current happenings in the world, this is probably the wrong time to do it.

"At present we intend to focus on the nine projects that we have in Dubai, and in launching our asset management division," he said.

The parent company of the private developer, Omniyat Holdings, has launched the Omniyat Asset Management team this week, to diversify its income and distinguish itself from its competitors during the times of economic turmoil.

Omniyat has nine projects in Dubai, worth Dh.13.5bn, and is progressing as scheduled, towards completion of these projects, during the second quarter of this year. Additional six projects are in the design phase, "for some time to come", said Mehdi Amjad, the Executive Chairman of the firm.

According to the new plan by Omniyat, residents will be given the option to choose between the Omniyat Asset Management or another company for maintenance of the building. Walichnowski assured that Omniyat would be transparent about expenses and make decisions together with Home Owners' Associations.

Dubai has seen the advent of several strata and property management companies, including joint venture with National Bonds Corporation called BCS - Strata Management Services and Horizon Property Management.

Omniyat has a portfolio worth Dh.28bn. The company shed 69 jobs in its sales and marketing division during November last year.

Labels: Dubai Real Estate, Omniyat

"; To prevent further cancellations of property projects and to motivate developers to extend payment plans, so as to keep the economy floating, the Dubai Government has stepped in, says legal officials at the Land Department.

A Senior Legal Adviser at the Dubai Land Department, Emad Eldin Farouq, said that the Government is trying to stop the panic.

The RERA (Real Estate Regulatory Authority) and the Land Department will have to give their final approval before the developer could cancel any contracts for all properties purchased after 31st August 2008, it has been confirmed.

31st August 2008 was the date, when the regulation giving authorities opportunity for increased involvement in property sector, was introduced. The authorities, therefore, have better control over the cancellations process and are able to broker agreements between buyers and developers.

As for purchases prior to 31st August, the parties concerned must abide by the contract and authorities will not have much power to mediate in a contract dispute.

The Land Department had also passed a regulation in November, wherein the numbers of cancellations were reduced, based on emergency reinterpretation of Article 11 of Law 13, which stipulates how much an investor would stand to lose on termination or cancellation of their contract.

As per the interpretation, the developer would keep 30 percent of the property value and 30 percent on any payments made after that. According to Land Department officials, such a change was required to avoid a property crash.

The authorities are also in the process of preparing regulations that change the manner in which property is being developed in Dubai, to prevent the sector from overheating in future. The regulations expected to be announced in coming weeks would require developers to enter into payment plans for buyers apart from construction milestones.

In the other regulation, expected to follow the first one, developers should have completed 20 percent of their building prior to announcement of sales. This will help prevent developers from focusing on sales, before making major equity investment in the project, the situation prevalent in the market for past two years.

Labels: Dubai Real Estate, Property Law

"; According to analysts in Dubai, property prices will hit the lowest during the second half of this year, while the distress sale subsides and layoffs in property and financial sectors will continue.
During the last four months, property prices in Dubai have been pushed down by homeowners and speculators, who are struggling to make their payment instalments, further pressurizing the price index.

The brokers and analysts however, did not comment or predict how far the prices would drop. A Dubai-based property analyst said that it would all depend on the number of subsequent layoffs and fire sales, and the manner in which developers would restrict supply to spur demand.

A Property Analyst with Shuaa Capital, Roy Cherry, said that the market is largely being driven by panic, mainly due to lack of transparency and information, which is preventing people from making a good assess of the market situation, and is stopping them from facing economic recession with confidence.

The government, from its end, however, is continuing to take measures to revitalize the mortgage market.

The Director, Investment Bank, Arqaam Capital, Ali Khan, said that prices are likely to hit the bottom during the second half of this year. However, a gradual return of liquidity in the market is required, and layoffs need to subside, for the investor confidence to return in the market, apart from resurrection of visa guarantee.

Fire sales are already happening in the market and prices have dropped more than 50 percent in few areas such as Downtown Dubai and Palm Jumeirah, compared to their peak between June and September last year.

"Dubai has already been three to four months into fall, and we should expect stability to return by second half of the year, although, this does not imply that prices will recover this year," Khan said.

Dubai has been witnessing job redundancies and cancellation of projects, due to factors such as liquidity pressures and lack of funding. The investors have therefore begun to redeem whatever best they can from their investments to cut losses.

Although the Central Bank has deposited capital into the financial system, and has introduced a swap facility to raise funds and cut down interest rates, hoping to ease lending conditions. The market remains tight, indicated a note from Standard Chartered Bank.

Government officials are trying to control the number of units arriving at the market, to boost demand. According to Khan, the fall in prices would be drastic for properties that have been already delivered to investors, and will be slightly less for those under construction or for those that have been delayed.

Labels: Dubai Real Estate, Market Trends, Property Prices

"; According to a new report by HSBC, property prices in Dubai have dropped 23% last month. For the first time, the survey measured the actual prices at which properties were purchased and sold.

The HSBC report for the last quarter of 2008 showed a 23% decline in property prices in Dubai, with villas showing considerable decrease in prices than apartments.

The once-booming property sector of the emirate has slowed down, owing to global economic turmoil, with the plunging prices and developers scaling back on their projects, and rising job layoffs.

Average prices for villas fell by 30 percent from their peak in September, but went up 33% year-on-year, while prices for apartments dropped 20% from last September, but grew 16% year-on-year.

The figures for December 2008 also indicate a drop of 23% from the peak in September 2008.

Transaction volumes fell from November 2008, but maintained healthy levels. The advertised rentals however, continued to increase 9% month-on-month, but HSBC expects rents to soften further with more units being converted from sale to lease.

The prices of properties in Dubai could drop by as much as 60% this year, from their peaks last year, Shuaa Capital predicts.

The latest report by Asteco, however, confirms that rental rates for villas and apartments have been levelling off throughout 2008 with an average growth rate of 4% for apartments and 8% for villas.

Labels: Dubai Real Estate, Latest News, Property Prices

"; The population in Dubai is likely to decline by 8 percent this year, due to recession in property sector, according to a new report.

The report, released by the UBS Investment Bank indicates a drop in population by 8 percent this year, which in turn would result in an oversupplied market, leading to 30 percent fall in house prices within next two years.

The researchers at UBS Investment Bank, in their report, mentioned that a slowdown in housing market, apart from the challenging macroeconomic conditions, may result in decrease in the number of foreign workers moving into the region for job purposes, and fewer investors being involved in local investments, including real estate.

With reduction in sales, property companies in Dubai, and in other emirates have been laying off staff, reducing marketing budgets and delaying projects. This in turn, has affected all major businesses, including construction companies, advertising firms and contractors.

According to the report, in case the property-related labour force dropped by 20 percent this year, and by 10 percent next year, this would result in a housing surplus of 87,000 units, which constitutes 27 percent of total stock in Dubai, towards end of the next year.

Such a situation would result in 30 percent decline or may be more than 50 percent decline, in prices, the report stated.

Dubai is getting more vulnerable to the recession in property sector, than in other emirates, mainly because of the major construction works happening here, and due to the fact that more than 50 percent of its economy is involved in property sector, the report said. On the other hand, its neighboring emirate Abu Dhabi is already witnessing an undersupply of housing, and the economy there is dependent on petrochemicals, and hence, may be less severely affected than Dubai, the report said.

The UBS researchers have recommended that the Dubai Government pass should pass regulations that make life easier for laid-off expatriates to continue their stay here, while looking out for new jobs, as maintaining expat population is critical for long-term property market and economic sustainability of Dubai, the report concluded.

Labels: Dubai Real Estate

"; The introduction of a new system of licensing rules for Realty brokers and online Registration of rental contracts in Dubai in 2009 is expected to make the sector more transparent and also the real estate investors in Dubai will feel safer investing in the emirate's property sector.

Real estate licensing procedures to control the operations of freelance real estate brokers are now set to be operated under one, uniform system, according to an agreement signed by the Department of Economic Development (DED) and Dubai's Real Estate Regulatory Authority (Rera). Earlier anyone who was a national of the United Arab Emirates or GCC could operate as an estate agent. According to the new rules, anyone opening a real estate brokerage will need to apply for a license and meet new criteria to operate.

Marwan Bin Galita, chief executive of Rera, told that those who apply for license should to be over 18, they need a good conduct certificate by CID and They must also under going training and attend courses run by RERA.

The DED will use its own license and business registration system according to RERA regulations for issuing licenses related to real estate activities. RERA will train a number of DED staff on how to use these new licensing procedures. The aim is to make the Real estate agents are qualified to complete real estate deals, and to have ethical standards for real estate agents, brokers and companies.

All tenancy agreements in Dubai must be registered on RERA's new online registration website, Ejari starting in January, so that the final rental index may be prepared by RERA. The rental index will map out rent structures in Dubai and is all set to launch the property rental index at the start of next year.

Marwan Bin Galita, chief executive of RERA said that Registration of all contracts is compulsory, under Law 26. This will assist in finding a rent data base which will make the whole system more efficient and transparent. The online registration, when complete makes it easier for RERA to monitor the rental market and track any landlords or tenants deviating from their tenancy contract.

Along with the recent amendment of law 26 relating to tenancy contracts, the Dubai's rental market is getting a good look. Nearly more than 100 companies have already registered their tenancy contracts on RERA's website.

Labels: Dubai Real Estate, Estate Agents, Property Law

"; Buyers and property analysts in the UAE are of the opinion that UAE property developers should offer investors with an "affordable exit route" in order to keep away from distress sales.

According to the analysts, given the current situation of global financial crisis and thereby the sudden slump in property sector, it is imperative for developers and authorities in-charge to arrive upon a series of measures to restore investor confidence.

A leading banker in the UAE has suggested that probably an initiative from the government's end, such as reconsidering provision of residence visa facility for buyers of free-hold residential units, would help restore the confidence and boost the property sector.

He pointed out that when the property boom in Dubai began, several developers had given an impression that buying a free-hold property would entitle buyers with residential visa status. This resulted in a major boom in the sector and brought about considerable growth. But, just a couple of months ago, when the authorities clarified that buying a free-hold property does not grant a residential visa status, several international investors backed out of the market.

Despite several legislations such as the Escrow Account, interim real estate register rule by RERA, all helped in building investor trust, the sector needs more proactive measures for revitalization, he added.

The Founder-Chairman of Overseas Indians Economic Forum, Dr. Ram Buxani, said that those who bought several units to take advantage of lucrative earning opportunities, should be granted with an affordable exit route, so that they do not end up with distress sales, which would further delay recovery of property market. Also, the projects that are yet to tak-off or get started should be put on hold and incapable investors should be allowed a convenient exit.

Dr. Buxani explained that about 30 percent of property buyers in the market are individual investors, who play a major role in boosting property sector. Another area that needs to be considered is the penalty clause, which should be maintained at a reasonable level of below 5 percent for those intending to exit. In cases where cash refunds are impossible, even issuing bonds which could be redeemed in 3-4 years are a better option.

Labels: Dubai Real Estate, Market Trends, Real Estate News

"; Dubai's RERA (Real Estate Regulatory Authority) has cautioned investors to stay away from 'illegal groups' relaying misleading and baseless information about property regulations.

The Authorities have urged investors to stay alert and get in touch with RERA, before signing deals.

Circulation of such information is 'highly misleading' and 'deceptive' to investors. This will result in investors losing money directly, if the contracts are not thoroughly read and cross-verified, and if proper legal advice is not sought, officials at RERA announced.

The officials have requested investors to consult them for any official information on Dubai property market and pertaining to investments.

Labels: Dubai Real Estate

"; The Dubai-based property broker, Smith & Ken has signed three deals this month, under a new concept of 'Swap Shop', wherein property buyers are free to exchange their properties.

The Chief Executive of Smith & Ken, Benjamin J Smith, who spoke to the media, said that when a person is unable to sell his property, he is offered the choice of swapping the property for another one, with a value lower than his current property, thereby offering the person a chance to own another property, while also holding back some extra cash.

Explaining the concept, he went on to say that a client of Smith & Ken, who owned a three bedroom shoreline sea-facing apartment worth Dh.4.5mn, with 2,184 square feet area, was actually in search of a garden home. The agency helped the client in locating a property at Palm Jumeirah, worth Dh.9mn four bedroom villa, with an area of 6500sq. ft., whose owner was looking to sell it.

The agency helped both owners to meet up and signed a deal between them. The advantage of such a deal, in this particular case, was that the person who was swapping his garden home property for the shoreline apartment, got an get hold of extra cash.

The agency charges the buyer and seller one percent of property value as commission. Speaking about the Dubai property market, Smith urged banks and lending institutions to raise the loan-to-value ratios once again, to the earlier 80 to 85 percent level, to reinvigorate sales.

Smith feels that even if prices are dropping in Dubai, it is still an attractive destination considering the investor's return and rental yield.

The value of residential properties in Dubai has climbed 5% during third quarter, when compared to second quarter of this year, while the average price for homes has risen by 7%.

Labels: Dubai Real Estate, Market Trends

"; The investments in Dubai property sector have crossed Dh.158bn so far this year, revealed experts, after considering the number of sales registrations, leasing and mortgage transactions.

Speaking during the recently held Urban Waterfront Conference, the experts revealed that the global market value of waterfront developments was set to exceed $500bn within next five years.

Housing three Palm projects, The World, and Waterfront, in pipeline, Dubai is set to be one of the major active locations in terms of waterfront developments, the experts revealed.

Although temporarily these projects are on hold, investments in Dubai are continuing to grow. So far, despite the global financial crisis, Dubai has been the most attractive destination for investors around the world till date, with an investment of more than Dh.158bn being invested during the year. This is in comparison to Dh.151bn investments last year, said Ahmet Kayhan, Chief Executive of Reidin.com.

As per the figures, the top investor countries in Dubai are India, Saudi Arabia, Russia, UK, Iran, Oman, Canada, Bahrain and Kuwait, apart from few other countries such as Pakistan, Singapore and Afghanistan having invested during the first three quarter of this year.

Labels: Dubai Real Estate, Investment Property

"; With property slowdown hitting the emirate, a committee has been established by the Dubai Government to monitor future real estate projects.

The Panel constitutes master and private developers with the intention of securing future supply. No projects would be called off and the committee will decide on anything to be launched only in the future, he said.

Fears of property sector slowing down have been worsened by the global financial crisis, and this has made financing harder to come by and led to project delays.

The biggest developer of the Arab world, Emaar Properties, when speaking to the media, mentioned that it would provide more time to customers to repay their mortgages, given the lending conditions among local banks.

However, a 9 to 13 percent slow down is likely due to the current global recession, said Emaar Chairman, Mohammed Alabbar.

Labels: Dubai Real Estate, Latest News

"; The real estate developers and agents in Dubai have been so far enjoying the benefits of the booming property market in the City, with investors ready to invest on any project that made it past the drawing board stage.

However, the turmoil during the last couple of months has brought about radical changes in their businesses. Leading developer Damac, which is currently working on 51 projects in Dubai alone currently, has already begun overhauling its organization. The developer is said to have axed a few employees.

The CEO of Damac Properties, Peter Riddoch, who spoke to AME Info, says that the ongoing global meltdown will eventually make companies reconsider their staffing levels and recruitments.

"Damac Properties too will consider its own position based on the market situation, and ensure that it maintains the right staffing levels," Riddoch said.

Another leading real estate agency, Better Homes, is also said to be feeling the impact of the global slowdown in sale of properties, with cutbacks affecting up to 50 percent of few of its departments.

When addressing a conference at Dubai International Financial Center, Sultan bin Sulayem, Chairman, Dubai World, ruled out any possibility of a drop in prices of the housing.

"The imbalances in demand-supply situation continue, and any downward trend in prices is unlikely, despite the fact that few investors may try to sell lower. There is an appetite in the market, but the will is lacking," Sulayem commented.

However, despite such assurances, the imbalance in demand-supply situation has not been found, and majority of new districts in the city, such as the Palm Jumeirah or the Business Bay, are still only partially occupied.

Changes within the property market in the city are already evident. For instance, a developer has already priced one of its projects for one-third the price than were originally mooted, a move which otherwise would have been never happened, even a couple of months ago.

The Ukraine-based VIP Waterfront, the developer of the Royal Bay project at Madinat Al Arab has launched the sale of the project, offering a price-cut, to tempt investors. It is said that the properties are going up to one-third less than what the group had previously planned.

This and several more such scenarios are an indication of the tightened access to credit, which led to several previous off-plan sales. This also points out to the fact that the future breed of property investors in Dubai would be the middle class, which has so far missed the opportunity.

Labels: Dubai Real Estate, Market Trends

"; Property prices in the UAE saw an increase in September, with Dubai registering 17 percent increase, and Abu Dhabi registering 11 percent increased, compared to an average increase of just 2 to 3 percent during the summer months.

According to a recent report released by HSBC Bank about the UAE real estate market, the price growth is gathering pace after a brief moderation during the summer months. Although the prices are following an upward trend, rental rates in Dubai seems to be stabilizing.

The report by the bank indicates that market is likely to remain tight until 2010.

According to estimates, about 90 percent of upcoming supply in Dubai will be controlled by Emaar, Nakheel and Dubai Holdings. The demand is affected by several factors. For instance, increase in prices is decreasing affordability, which gets further augmented by the mounting pressure on mortgage rates and dropping loan to values. Recent stock market declines too have not helped improve this situation, which indicates that the region is not immune to global trends, be it property, debt or equity.

According to HSBC, in such a scenario, the off-plan market will be the first to get affected, due to high level of speculation. On the other hands, ready units will be supported by demand and any weakness would seem less pronounced.

Although the prices in UAE are getting less affordable, Dubai offers a bigger range of units targeting most income levels, unlike the Capital city.

Softening in the property market is not just healthy, but is necessary, for the sustainability of the economic story, says the bank report.

Labels: Dubai Real Estate, Property Prices

"; The six year property boom that Dubai witnessed has almost ended, with the sales collapsing amidst fears of global economic downturn, reveal agents.

"Last month was the worst, a real disaster," said Mehdi Zoghbi, a property agent at the Middle East Real Estate Consultants, who spoke to Zawya.com.

The sellers are desperate and are now offering their off-plan properties on the secondary market for zero premium, despite the loss on investment, just to offload quickly, it is said.

Dubai, being the first emirate to permit foreigners to purchase homes, will also be the first to see a drop in property prices, with the global credit crunch and region's prospects undermining investor confidence.

According to a property agent at Al Jabal Real Estate, the commissions have dropped by 70 percent currently. Dubai needs to apply caution to curb the practice of "flipping" property and payment of "key money" to reserve real estate, the agent said.

However, the biggest developers in the city, such as Nakheel and Emaar are confident that sales will remain robust. The Chairman of Emaar, Mohammed Alabbar, in his statement, expressed confidence about the fundamentals and future growth of the company.

Despite this, Emaar's stock has fallen 62 percent since the beginning of the year, which is more than 48 percent fall in Dubai Financial market's main index during the same period. Colliers International reported that property price growth in Dubai dropped to 16 percent during second half of the year from 42 percent during the first quarter of the year.

Even Morgan Stanley had warned a drop in prices by 10 percent in Dubai towards 2010.

A drop in property prices of Dubai, would also burden the Dubai economy further, considering the fact that it does not profit from the vast oil income otherwise enjoyed by its neighboring emirate Abu Dhabi. At present property and construction contribute to about 30 percent of the economy in the emirate.

The strong economic condition in the region which had supported the property boom in Dubai, too, has now been badly hit.

Considering all such factors, whether buyers would still continue to respond amidst the current depressing economic stance is yet to be ascertained.

Labels: Dubai Real Estate, Latest News, Market Trends, Property Prices

"; Since the recent dramatic events in the financial world around the globe, the organisers of this weeks' Worldwide Property Show being held in Dubai have just announced the results of a recent survey on investor confidence conducted in association with YouGovSiraj.

The survey shows an optimistic view, with one fourth of respondents feeling that the global crisis will only have a minor impact on the local UAE Property Market. 56% surveyed felt that there may be a slowdown but will not have the same impact as in Europe and US.

The survey further revealed that Dubai residents are more confident than those living in Abu Dhabi and Sharjah however 40% of all respondents felt that now is still a good time to invest as they can pick up a bargain. 16% of respondents were not sure and were sitting on the fence.

When deciding on the developer -value for money, ability to adhere to promises and transparency of information are the attributes that people look at. The least important attribute is public information available either on a website or in the media. This indicates that consumers are anxious about cost of ownership and the inherent investment value of the property.

Respondents were also asked what were their top destinations for real estate investment around the world - 55% favoured Asia, 40% for Middle East, 32% for Europe & UK and 27% for North America.

George Betz ,International Sales Director at Dubai Shows Limited organisers of the Worldwide Property Show said: "Considering our survey has literally been completed in the last few days since the global meltdown, it is very encouraging to see that people still understand the merit in investing in real estate and that now is still a good time to buy as prices are low."

Betz continued: "The Worldwide Property Show which started in 1995 has received a record number of developers and estate agents wishing to participate in this season's show and will feature 85 exhibitors from 32 countries including USA, Egypt, Morocco and UK, as well as emerging Asian markets such as Philippines and Thailand and a very wide variety of UAE developers and agents."

Mike Bridge, Business Development Director at Dubai Shows Limited said: "With developers feeling the pinch, it is definitely a buyers market with great opportunities to select prime property in some of the best locations in the world. You cannot take away the benefits, even in a crisis, of a fabulous city or beautiful coastline."

Bridge added: "It is also good news that the banks have recently received Governments' support and are more likely to be in a position to fund property investment again".

The Worldwide Property Show and UAE Developer, the UAE's longest running consumer property exhibition opens 23rd to 25th October 2008 at the Grand Hyatt Dubai.

Labels: Dubai Real Estate, Latest News, Property-show