Dubai Real Estate News
UAE Property Market Trends and Reviews

"; The rents in the northern emirates have dropped considerably since 2009, given, the fresh supply and low demand. Even the lease rates have dropped 29 percent during the first half of 2009, says a CB Richard Ellis market report.

The trend is likely to continue into first half of 2010, due to weakening demand and huge supply from within the northern emirates and the border areas of Dubai, such as Muhaisanah, Al Nahda and Al Ghusais.

The demand is low or almost non-existent in the market, although the rental market is witnessing some movement, particularly from tenants seeking better quality property, said Mohanad Al Wadiya, Managing Director, Harbour Real Estate.

The maximum decline in rentals was noticed in the case of single bedroom apartments, which dropped 34 percent, while double and triple bedroom apartments dropped 29 percent and 25 percent respectively. This drop may be largely due to people opting for larger flats with lower rent on the offer in comparison to previous months.

Ajman and Ras Al Khaimah also witnessed drop in values by 50 percent or more for off-plan properties. The gaps between rental rates, however, remained the same among various northern emirates. Sharjah continued to demand highest rates, followed by Ras Al Khaimah, Ajman, Fujairah and finally Umm Al Quwain, the most affordable northern emirate.

Among these emirates, Ras Al Khaimah is witnessing maximum progress, while Sharjah and Ajman are on hold or are progressing very slowly.

Al Hamra Village is the only project with 90 percent completion rates, and 80 percent occupancy, with only one residential tower remaining to be completed in front of the resort. The rate at the Ras Al Khaimah's Al Hamra village is 30 to 35 percent higher, in comparison to other developments in the region.

Also, the Bab Al Bahr project on Al Marjan Island, a sister development of Al Hamra Village, by Rakeen Properties, is also progressing on schedule. The first and second phases of the project are complete, while the third and fourth phases are nearing completion.

Even La Hoya Bay project by Khoie Properties, now undertaken by Rakeen, is being developed for delivery by 2011.

The Mina Al Arab development, the Pacific, all located at the Al Marjan Island is also due for delivery in 2011.

With more residents opting to move to border areas of Dubai, where there is better quality stock and competitive lease rates, the leasing rates across the northern emirates continue to decline in 2010, Al Wadiya said.

To add to this, high percent of residential accommodation is offered by the northern emirates, and this has stemmed from their fast-growing southern neighbour (Dubai), and this helped excessive expectations for new units, said Mat Green, Associate Director, CBRE - Middle East.

To prevent this exodus, landlords in the northern emirates are now offering rent-free periods of up to one or two months, free chiller, free parking spaces, and more such incentives, it is said.

Labels: Ajman, Leasing, Ras Al Khaima, Rentals

"; Dubai developers are considering renting out their new units on furnished basis to generate immediate revenue, real estate analysts said.

Few developers will want to convert their new developments into furnished apartments on short to medium or long-term basis, given the current market conditions, said Mohammed Nimer, CEO, MAG Property Development.

This will help in immediate revenue generation for them, rather than leaving their buildings without tenants. The furnished apartments have high rental value due to higher investment value.

The Executive Director of ETA, Abid Junaid, said that his company would be converting a project due for delivery during the third quarter of 2010, into a furnished model, and has hired Star Hospitality, to manage and offer services to the project.

The project, namely Grandeur Residences, located along the Palm Jumeirah, will comprise single, double and triple bedroom apartments and beach front villas. The highest floors of each block will house four exclusive penthouse suites, with private access to each via the spiral staircase to the terrace.

According to Junaid, the expected rate of return for such project is around 8 percent per annum, as a developer, but, as of now, it is about 6 percent, depending on occupancy and room rates.

According to real estate agents, the rentals for furnished apartments are 10 to 20 percent higher on an average than unfurnished apartments. Given, the current situation in Dubai real estate market, several investors have been prompted to look at acquiring furnished apartments for short-term leasing.

According to Gibran Bukhari, Sales Manager at Coldwell Banker, this year several individual units will be converted into furnished apartments.

The Sales Director of Elysian Real Estate, Robert Macnair, agreed that furnished property generated 15 to 20 percent premium over a typical unfurnished property.

For instance, a single bedroom Shoreline apartment on the Palm Jumeirah will fetch Dh.150,000 per annum by way of rent, while a similar unfurnished apartment will generate about Dh.120,000 per annum.

Better Homes, a prominent real estate agency, said that rents for furnished apartments fall in the range Dh.5,500 and Dh.8,500 per month.

Labels: Real Estate News, Rentals

"; The Vice President and Prime Minister of UAE, and Ruler of Dubai, H.H. Sheikh Mohammad Bin Rashid Al Maktoum, issued a legislation on property rent cap in 2010 to ensure the stability of property market in the emirate.

The decree aims to regulate the relationship between tenants and landlords and chart a legal framework for this matter.

Rent increase caps for 2010 will be set at the same rates as for 2009, as per the decree issued on rental cap in 2009. The decree endorsed the Real Estate Regulatory Authority (RERA) rent index as the main reference to determine the average rent on which the rental increases in 2010 will be decided.

Rental increases are permissible only if the property is more than 25 percent below the average index price. If the rent charged was 26 percent to 35 percent less than the average rent for similar property, the maximum increase shall be equivalent to 5 percent of rent value for the year 2009.

If the rent charged was 36 percent to 45 percent less than average rent for similar property, the maximum increase will be equivalent to 10 percent of rental value for the year 2009.

Similarly if the rent was 46 to 55 percent less than average rent for similar property, the maximum increase shall be equivalent to 15 percent of rent value for the year 2009.

If the rent was 56 percent to 55 percent less than the average rent for similar property, the maximum increase shall be equivalent to 20 percent of rent value for the year 2009.

The decree will get effective from the date of issuance, and will be published in the official gazette.

Labels: Property Law, Rentals

"; Asteco, the largest property services company in the UAE, has reported that apartment sales for completed projects in the prime Downtown Burj Dubai area have seen maximum increase of 8 percent on quarter-to-quarter basis.

In its third quarter report on Dubai property market, Asteco said that sales prices for apartments in Downtown have grown from Dh.1200 per sq ft during the second quarter, to Dh.1300 per sq ft in third quarter.

Across the whole of Dubai, sale prices for completed apartments and villas have increased only slightly with an average of 1 percent and 3 percent, compared to the 2nd quarter report. Rental charges have seen minimal change during the same period, the report said.

Asteco CEO, Elaine Jones said that both Downtown Burj Dubai and Jumeirah Beach Residence are fully established communities that are highly desirable, which is exactly what the market is seeking. A completed tower is no longer sufficient, if it does not form a part of integrated community with sufficient convenient access to hospitals, schools, transport, leisure and entertainment amenities. As for villa communities, The Springs and Arabian Ranches are doing well.

The property market analysis by Asteco has revealed that demand is high mainly for smaller units such as studios, single bedroom apartments, double bedroom villas or townhouses. Overall, however, apartment and villa rental rates have seen minimal changes.

At present, average rental rates for studio apartments are Dh.45,000, while that for single, double and triple bedrooms are Dh.76,000, Dh.103,000 and Dh.139,000 respectively. Villas and townhouses are available for an average of Dh.117,500 for double bedroom, Dh.180,500 for triple bedroom and Dh.227,500 for four bedrooms and Dh.278,500 for five bedroom units.

According to Asteco, majority of inquiries are for Jumeirah and Umm Suqeim where tenants are seeking 3 bedroom units in the range Dh.150,000 and Dh.180,000.

Labels: Apartments, Rentals

"; The rentals for office space in Dubai have dropped by 63 percent during the past nine months, but prices are likely to fall further for the reminder of the year and in 2010, as a dearth in demand has been noticed, along with abundance of new supply, which will keep the office space leasing market sluggish, particularly the free zone areas, reports CB Richard Eliis (CBRE)-Middle East, the leading property consulting company.

Average rentals at the Jumeirah Lake Tower area have dropped to Dh.70 to Dh.120 per square feet from Dh.240 to Dh.280 during the third quarter last year.

Office space from private developers in Dubai Silicon Oasis now averages between Dh.50 per square feet and Dh.85 to Dh.130 in Dubai Internet City, Jebel Ali Freezone, Media City, and Airport Free zone. No comparative figures have been provided.

The global economic crunch has badly hit the real estate market in Dubai, with the prices having halved from their peak values in September 2008, hitting both residential and office space sectors.

The large expatriate population in Dubai that fuelled the five-year property boom, dwindled this year, with thousands losing their jobs and being sent back home as the companies cut down operations.

The office space leasing market will have to witness more tough times, as the current stock will face stiff competition from new supplies coming on stream. The office space available in third quarter this year has more than doubled, touching 5.2mn square feet from the 2.5mn square feet space during third quarter last year, said Faheem, Research Analyst at CBRE Middle East.

During the rest of the year and in 2010, the leasing market in these areas will continue to remain sluggish, largely due to additional pipeline stock expected to enter from free zone developments and non-free zone areas such as Business Bay development.

Labels: Office Space, Rentals

"; Although the demand for residential properties in Abu Dhabi is still strong, due to insufficient supply, the impact of lower rent rates in Dubai, could lead to a supply-driven market condition, with more residents opting for Dubai over Abu Dhabi, points out the latest report by EFG-Hermes about UAE property sector.

The difference in rent rates between Dubai and other emirates, particularly Abu Dhabi, has led to considerable cross-emirate migration. At present, several residents and businesses are taking advantage of the low-cost environment in Dubai and moving into the emirate from the Capital, mainly for convenience or lifestyle reasons. If this trend continues, it is likely to exert a downward pressure on prices and rents in Abu Dhabi, narrowing the differential and changing the overall outlook, the report points out.

However EFG-Hermes report emphasizes that the end-user demand is likely to pick-up in Abu Dhabi. This is owing to greater availability of mortgage financing, and a short-to-medium term supply-demand mismatch, coupled with structured pace of development and a shift towards better economic liberalization.

The Managing Director at Jones Lang LaSalle (JLL), Blair Hagkull, who spoke about the EFG Hermes report, said that the fundamentals in Abu Dhabi property market will remain positive in the long run. However, at present there is a marked difference in the cost of residential and office accommodation in Dubai and Abu Dhabi. While the prices in Dubai appear moderate, the value proposition for residential users in Abu Dhabi continues to remain challenging.

However, the rental rates to be charged in future, could be lower than what was anticipated, the report concludes.

Labels: Rentals

"; The prices of properties adjacent to Dubai Metro stations can command an increase in rent of up to 10 percent, as the mass transit system draws more people off the roads.

People seeking homes, will no-doubt take into consideration the proximity and convenience to public transport, as the city moves away from its dependency on private vehicles.

Rents across Dubai have already seen a marginal rise, but the possible impact of Metro is still speculative, say industry analysts.

Any increase in rental could be further tempered by the RERA (Real Estate Regulatory Agency) watchdog, which at present does not factor Metro stations in its rental price index.

The Director of Research and Advisory Services at Landmark, said that the impact on prices has been marginal, so far, due to the uncertainty in the market and anticipated Metro usage patterns at the outset and about how usage patterns evolve over time.

On an average a 5 to 10 percent increase in premium can be expected during the first two years of operation, depending on the residential location and specifics of the development or individual buildings, the Director said.

As for the Metro commuters, the office location will be a critical factor. Few popular localities are getting highly congested with limited parking space. The Metro will be advantageous to residents living or working in such localities.

The actual Metro use and its impact on property prices will also depend on unknown factors such as Salik. For instance, if Salik fares increase, this could trigger more widespread use of Metro and then prices would be adjusted accordingly.

The Metro is likely to have an impact on commercial prices and rentals too. With increase in use of the Metro, offices with easy access to stations will gain a premium.

For instance, most offices in Sheikh Zayed Road have only limited parking spaces, with several companies or employees having to pay for additional parking spaces. When the companies can see how proximity to a Metro station can help save them their employees both money and hassle, preferences will emerge, resulting in premium.

However, RERA keepts tab on rents, and irrespective of the location of the property, the rents have to fall within the range. Properties located close to the Metro may be priced towards the higher end of the range, but will not go beyond a limit.

The landlords in particular, need to be very cautious before increasing rentals, as they would be violating the law set forth by the government. All these factors need to be considered by landlords and industry specialists before any hike in prices before the Metro gets fully functional, the analysts point out.

Labels: Market Trends, Rentals

"; The distortion in supply has led to temporary rent stabilization in few areas of Dubai, while rents in other parts of Dubai are continuing to rise owing to lack of supply, states a report by the leading real estate consultancy firm, Landmark Advisory in its report.

The increasing rents could be due to lack of supply. Several landlords have removed inventory from the market to avoid renting out at current market rates, while others could be out of town during summer and therefore consequently unavailable, said Charles Neil, CEO, Landmark Advisory.

The leasing supply may also be affected by the month of Ramadan, with several landlords waiting until end of the year to reassess the market, he pointed out.

The consultancy firm, in its August 2009 lease guide for the Dubai market, states that the demand for property was particularly strong during June and July with considerable amount of leasing contracts ending around this period. However, the marginal rent increase triggered due to this is considered unsustainable by Landmark Advisory.

Rents in several areas of Dubai have dropped significantly during the past 5 months, but, there are few exceptions to this trend as few units in some preferred developments seem to be doing well.

The price map indicates a continued upgrading trend with major factors for relocation being the demand for location, quality and size.

Landmark Advisory predicts that several residential areas in Dubai are due for further fluctuation, particularly, with the new supply coming into the market during the next 12 to 24 months.

If the rents do decline for these areas, then additional relocation demand can be expected, as long as landlords adapt pricing strategies. This relocation demand will further help in mitigating rental declines, Neil explained.

Labels: Market Trends, Rentals

"; Office rents in Dubai Silicon Oasis, Deira and Bur Dubai may have bottomed out, as these areas have not witnessed any major rent reduction during the past month, reveal property analysts.

According to Porush Jhunjhunwala, Manager - Commercial Leasing at Better Homes, a real estate firm, there has been only a marginal reduction of one to two percent during July-August, and this indicates that office rents in these areas have possibly bottomed-out.

However, areas such as Jumeirah Lake Towers, Al Quoz, Ghusais and Tecom are likely to see another 5 to 10 percent correction before rents begin to stabilize there, he said.

David Macadom, Director-Sales and Leasing Commercial at Better Homes, said that the current office vacancy for leasing availability is nearly 15.5 percent. Commercial lease rates have dropped from 40 to 60 percent, based on the area and size of office premises, grade of building, accessibility to the locality, parking facilities and location of the building.

According to Macadam, the office leasing transactions are now leveling off in the range Dh.80 to Dh.150 per square foot per year. There are no declines below these rates.

According to the latest data from Better Homes, the Dubai Silicon Oasis has seen the maximum reduction in office rents (nearly 65 percent), compared to January this year.

The current office rental rates are in the area of Barsha and Dubai International Airport are in the range of Dh.50 to Dh.70 per square feet, with a decline of more than 55 percent in office space.

Office rent rates at Barsha are in the range Dh.80 to Dh.120 per square feet, while in the Dubai International Airport locality, rents range from Dh.90 to Dh.120 per square feet.

The areas that have seen a 55 percent decline since the beginning of the year are Deira (Dh75-110/sq ft), Garhoud (Dh80-110/sq ft), Sheikh Zayed Road (Dh110-170/sq ft) and Umm Hurair (Dh90-120/sq ft), while Karama (Dh90-120/sq ft) and Qusais (Dh80-110/sq ft) have seen a dip of more than 50 percent.

Areas such as Bur Dubai (Dh90-115/sq ft) are down by 50 per cent, Dubai Investment Park (Dh70-85/sq ft) and Jumeirah Lake Towers (Dh55-120/sq ft) are down by 47 to 48 percent from their January levels. This is followed by Downtown Burj Dubai (Dh170-200/sq ft), with 46 per cent reduction and Al Quoz (Dh75-90/sq ft) with 41 per cent drop.

The least affected locality is the Dubai Health care City (Dh.115-145/sq ft), down by more than 35 percent.

In the meanwhile, banks and lending agencies in the UAE are recording healthy growth in residential real estate mortgages, which indicate that prices may be reaching levels that are once again of interest by the end-users seeking to purchase properties.

The HSBC-UAE has witnessed a 25 percent growth in mortgage lending value during the second quarter this year, compared to that during the first quarter.

"As price expectations between buyers and sellers are converging, more transactions are happening both for property sales and mortgages," said Venkatesh Srikantan, Regional Head - Assets and Liabilities, HSBC Middle East.

There is an increase in demand from end-users who had missed the earlier property booms and are happy to purchase property at those price levels, Srikantan said.

Labels: Mortgages, Property Prices, Rentals

"; According to leading property consulting firm, CB Richard Ellis, weakening sales, lessening demand and fresh supply entering the market, will lead to immense declines in property prices and rentals in Dubai during the second half of this year, but the drop will not be as severe as experienced during the previous half of the year.

The once-booming property sector in Dubai, is yet to recover, although the price declines are reducing, and will hopefully bottom out by the end of the year, said CBRE in its latest report on the property market here.

The property market in Abu Dhabi enjoys a better edge over Dubai, but will remain subdued although price drops will level off, as more investors plan to hold on to their assets due to lowering prices.

The Associate Director at CBRE Middle East, Matthew Green said that the company has already registered double-digit falls during the first half, but the declines will be limited to single-digit level during the rest two quarters.

Green said that he does not expect recovery in Dubai until next year, as the residential and retail prices will be further pressurized due to high volume of supply.

According to CBRE, the pressure on lease and occupancy rates during the second half will be most prominent in new residential developments such as International Media Production Zone, Dubai Silicon Oasis and Motor City.

In the commercial office market sector, supply will substantially increase during the next six months, and the majority will be from new business areas such as Al Barsha, Jumeirah Lake Towers, Business Bay, TECOM and Dubai Silicon Oasis.

With the supply continuing to surpass demand, the competition between landlords will tighten, resulting in greater incentives for tenants, Green said.

Labels: Property Prices, Rentals

"; 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

"; The Dubai International Finance Centre (DIFC) has seen 40 percent drop in commercial rents during the past six months, reports CB Richard Ellis (CBRE), a leading property consultancy.

The rents have dropped from Dh.750 per square foot to Dh.450 per square foot, and few private landlords are offering further deduction in rents, the report said.

DIFC, being the prime business centre located in the heart of Dubai, commercial rents are far better here, compared to several other areas in the emirate, says Matthew Green, Associate Director-Research, CBRE.

DIFC offers excellent business amenities with high quality office space, generating considerable demand. There was a lengthy wait-list for space in 2008 and the consistency in demand has been continuing since 2004. This is because the firms are seeking quality offices, located in proximity to Sheikh Zayed Road.

The Managing Director of CBRE, Nicholas Maclean, says that the drive in the market is mainly from the financial sector during the past one yea, as the firms want to be located close to DIFC.

Apart from DIFC, the Emaar Square, a business district at Downtown Burj Dubai has also been generating considerable demand, although the Business Bay is the most popular, when it comes to office buildings. Both these projects are on the Sheikh Zayed Road. These properties will soon face stiff competition from the new World Trade Center, he said.

The CBRE report this month said that the prime office rents in Dubai dropped by 18 percent during the first quarter this year, in comparison to the final quarter of last year, dropping from Dh.550 per square foot to Dh.450 per square foot.

The areas most affected by the decline in occupancy and lease rates are Jumeirah Lake Towers and Site C, the areas developed by TECOM, located close to The Greens.

The report states that landlords with properties in localities away from business districts are offering incentives such as relaxed payment terms, to attract tenants.

Labels: Commercial Property, DIFC, Rentals

"; The rental calculator on Dubai's RERA (Real Estate Regulatory Authority) website is the new rental index, the RERA officials have confirmed.

During recent weeks, there has been lot of confusion about the rental index. The original rental index was released during end of 2008, but the rates were on the basis of mid-2008 rates, and hence were unrealistic.

A revised index was due during April-end, but the rental calculator was installed unannounced on RERA's website. However, the rental calculator is actually the new rental index.

Bin Galita said the new index is good and more trustable. Beginning January, all disputes coming in to the Rent Committee will be judged on the basis of the current index. Contracts signed from January to March and also previous contracts have all been taken into consideration. The calculator index has been compiled using data from the Ejari website, and after discussions with management companies, agents, and checking listings and site surveys.

The next index is expected to be released in September, after summer. RERA will also share its extensive database with Ajman's ARRA (Ajman Real Estate Regulatory Agency). The federal laws too will be unified, when the same database is shared. Agents in Ajman wishing to market in Dubai will be registered with both ARRA and RERA, Bin Galita said.

Previously agents in Dubai could market in Ajman without being registered there and vice versa. This practice may no-longer be permitted, as agents will have to register in both emirates if they want to market in both Dubai and Ajman.

Labels: Latest News, Rentals

"; With the drop in demand owing to global economic crisis, rents for office spaces in Dubai Free Zones have also dropped considerably, noted an industry analyst.

The Research Analyst at CB Richard Ellis, Mohammed Faheem, said that the average rates of privately managed buildings in the free zones have dropped from the Dh.240-380 per sq ft range, to Dh.92-180 per sq ft during the first quarter of this year, thereby indicating a 52 to 61 percent drop.

This is a clear indication of decrease in demand. The free zones included in the survey were the Media City, Internet City, Dubai Silicon Oasis, Knowledge Village and Jumeirah Lake Free Zone.

Rents within the various zones vary from one another with few zones implementing rate restrictions to stimulate demand from occupiers. The buildings managed by free zone authorities have rents in the range of Dh.170-190 per sq ft.

The Dubai International Finance Center (DIFC), the special economic zone located in the central business district of the city, has fared much better, standing out above the rest of the prime locations in Dubai, with average rents ranging from $115-123 per sq ft. This is mainly because DIFC is a popular location among companies seeking to move in to Dubai.

Although, the lower rent rates in few of the free zones in Dubai, makes it more attractive, it really depends on the motive of the free zone managers. The rents are affected within the free zones mainly because the authorities have a different agenda than the commercial landlords, says Nicholas Maclean, Managing Director, C B Richard Ellis.

Labels: Freezones, Office Space, Rentals

"; Dubai Real Estate Regulatory Authority (RERA)'s website now includes a new Rent Increase Calculator, which halts any uncertainties prevailing in the real estate market.

The calculator has helped reduce the maximum rental increase in few localities, and the rents have now decreased by nearly 50 percent. In order to control spiralling rent rates, RERA had introduced a rental index last year. This year's index is yet to be released.

The calculator limits the maximum rents for all locations in Dubai. A triple bedroom villa in Barsha has a ceiling of Dh.140,000 down by 50 percent from Dh.270,000, compared to rental index of 2008. Similarly, a triple bedroom villa at The Springs now has a ceiling of Dh.160,000 in place, compared to Dh.280,000 fixed last year.

Even Al Karama witnessed a drop of 25 percent (from Dh.280,000 to Dh.135,000) for a triple bedroom apartment. In Garhoud, rents dropped to Dh.105,000 from Dh.240,000, marking a 56 percent drop.

Rents in the Mirdif area are down by 42.5 percent from Dh.20,000 to Dh.115,000 for three bedroom villas. The Managing Director for MENA (Middle East and North Africa) region for Jones Lang LaSalle, Blair Hagkull, said that housing affordability is utmost important for continued growth and competitiveness in Dubai.

The downward pressure on rental rates for mid and long-term is a positive indication, although it has implications for future projections of landlords, he said.

Meanwhile, the global real estate consultancy, Colliers International, in their study said that Dubai has seen a rental drop in residential units by 20 to 40 percent, since the last quarter of 2008.

Labels: Latest News, Rentals

"; Rental in Abu Dhabi continues to remain strong are likely to remain so, despite the decline in rents in the other GCC nations owing to the global financial crisis.

The leading property management company, Asteco, has reported that residential and commercial rents have dropped very little during the first quarter of this year, inline with capital values. The scarcity in supply of residential and commercial units has led to high demand for quality office and apartments.

Companies are also reducing the accommodation allowance of staff, which has made its impact felt on the ability of tenants to rent at current levels.

Residential apartments in the Corniche and Khalidiya are the most popular, and rentals are high in these areas. The average annual rent for a single bedroom apartment in these areas are Dh.252,500 and Dh.170,000 respectively.

Just as in Dubai, even here, the local investors do not agree to lower their prices on vacant units. However, expatriate owners have reduced their apartment rents by almost 20 percent.

Villas in Bateen and Khalidiya are expensive with Dh.365,000 being charged per year for a three bedroom apartment, while Dh.410,000 and Dh.475,000 are being charged for four bedroom and five bedrooms.

On the whole, the rents in Abu Dhabi seem to be more expensive than in Dubai, in contrast to the usual norm.

The Managing Director of Asteco, Andrew Chambers, has warned that due to shortage of supply, Abu Dhabi is just being perceived differently. About 5000 to 6000 new apartments would come on the market during early 2010.

This extra stock would give tenants a better range of properties to choose from, and offer better flexibility in negotiating with landlords. There is an increase in residential apartments in the Passport Road, Hamdan Street, Corniche and Muroor areas. More villas would enter the market this year, particularly in the Golf Gardens, Al Reef and Khalifa City A and Al Raha Gardens.

As for the commercial rents, there is still strong demand noticed for Grade A office units, while substandard properties have seen a decrease in rents. Office spaces have dropped 27 percent on Defence Street and Muroor, and by 25 percent on Passport Road.

Labels: Abu Dhabi, Rentals

"; The Springs has been voted as the best hotspot for purchase or rent of property in Dubai during the month of February, reveal the latest findings by the property portal propertyfinder. ae.

The Springs accounted for more than 22 percent rental inquiries during the month, and 13 percent of the total inquiries in February.

The findings reveal that both buyers and renters are looking to move further out of traditional residential hubs in Dubai, to locations such as the Jumeirah Lake Towers, The Springs, and the Discovery Gardens.

The Head of Marketing at propertyfinder, Marcello Sambartolo, said that this survey has revealed interesting statistics, as a total shift in rental interest is noticed towards new residential areas such as Jumeirah Lake Towers and Discovery Gardens, where the rents are more competitive.

According to the data, there is an interest from end-users seeking to invest in Dubai real estate, as it is offering opportunities to capitalize on the drop in housing prices.

The hot spots for Feb'09 are:

To buy (Feb 2009):
1. The Springs - 13.52%
2. Jumeirah Lake Towers - 11.21%
3. Dubai Sports City - 8.03%
4. International City - 8.69%
5. Dubai Marina - 7.85%

To rent (Feb 2009)
1. The Springs 22.69%
2. Discovery Gardens 19.28%
3. The Lake 8.75%
4. Dubai Marina 7.72%
5. Arabian Ranches 6.66%

Labels: Latest News, Market Trends, Rentals

"; 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

"; Beginning 1st June '09, the rents for tenants in The Gardens will be revised inline with the guidelines issued by RERA (Real Estate Regulatory Authority), announced master-developer Nakheel.

In its circular to the tenants, Nakheel confirmed a rental revision, affecting all contracts from 1st June, as per the rules and regulations announced by concerned authorities in Dubai.

The circular also stated that each tenant would be advised individual about the new rents shortly. A Nakheel spokesperson, who spoke to the media, said that The Gardens is one of the most sought-after rental communities in Dubai.

RERA's residential rental index, compiled during the second half of last year, indicated a rent of Dh.130,000-140,000 for a triple bedroom, Dh.100,000-115,000 for doubled bedroom and Dh.90,000-95,000 for single bedroom apartments in The Gardens.

The new decree by RERA, being applicable to both residential and non-residential properties, curbs rental increases this year for tenants who intend to renew rental contracts signed last year, provided, the rental value in 2008, was equivalent to or less than 25 percent maximum than the average rents in the RERA index. Also, a landlord can increase rent upto 20 percent, the decree stipulates.

RERA is currently working on a rental index which has more realistic values, considering the decline rentals in the emirate. The revised index will be released in April.

As for the The Gardens, Nakheel does not offer the option for freehold ownership for properties in the community. The Gardens signifies the commitment by Nakheel to an affordable family living, combined with quality lifestyle and amenities.

Located in proximity to the Ibn Battuta Mall, The Gardens development comprises 129 low-rise buildings with single, double and triple bedroom apartments and accommodated 10,000 residents and is 100 percent let.

The property prices and rentals in Dubai are likely to decline across most sectors this year, before attaining stability by 2010. Dubai may be handicapped by considerable levels of new supplies and the market is unlikely to experience any sustained growth in prices and rentals until 2011, reported a leading property consulting firm.

Labels: Nakheel, Rentals

"; 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

"; The Real Estate Regulatory Authority (RERA) in Dubai has announced its rental index for residential properties, classified on the basis of various categories. Last week, the agency released the commercial property index.

The posting on RERA's website lists the residential index, which focuses on the apartment and villa rents in three main areas - Deira, Bur Dubai and freehold. This is further segregated into individual localities and home sizes.

According to analysts, the rental index lists values that are far higher than the prevailing market values. The index was compiled based on the market situation of 2008, when the rental rates were at their peak in Dubai. The agency may therefore have to re-look the index values soon, keeping in mind the current situation, following the impact of global economic recession on the GCC economies, one analyst pointed out.

However, RERA has highlighted the fact that the index should be used only for reference and is not any sort of legal obligation.

But, the analysts feel that landlords would utilize the index in their favour, as a justification to increase rents, irrespective of market conditions.

The decree issued by Dubai's Ruler on Monday, has further clarified that new rental contracts (both residential and commercial) signed last year, should not be increased, based on certain conditions. The decree states that rental contracts could be increased in steps up to a maximum of 20 percent.

Rental Values of Residential Apartments (Dhs '000)

Rental Values of Residential Villas (Dhs '000)

Rental Values of Freehold Property (Dhs '000)

[Source : RERA]

Labels: Latest News, Rentals

"; It is essential for the landlords to understand the requirements of tenants, for the real estate sector in Dubai to bounce back, industry analysts reveal.

Markets are more flexible back in UK, and they bounce back much faster from economic turmoil than in mechanical markets, says Nicholas Maclean, MD of CB Richard Ellis. This is because in transparent markets such as the UK, landlords are quick to act and reduce rentals to meet market demands. Such a decision is vital for the recovery process.

In the UAE, if the landlords understand the requirement of tenants, the market would recover faster than in any other markets around the world, opinioned Maclean.

The fundaments in real estate market of Dubai are still positive, and there is 100 percent occupancy, particularly in the commercial sector, unlike in Europe or other parts of the world, he pointed out.

In the meanwhile, the fourth-quarter report by CB Richard Ellis indicates that rentals in Dubai are leveling off in residential, commercial and retail sectors.

Rents are likely to soften to decline, but, in the rental index released last week by RERA, this will help in bringing about transparency in Dubai’s real estate sector.

Rentals in three commercial sectors, including retail, industrial buildings and offices remained stable in the fourth quarter of last year, the report said.

Labels: Market Trends, Rentals

"; According to Marwan bin Galita, the Chief Executive of Dubai's RERA, a rent cap is not necessary year.

The companies are cutting down on allowances, and the cutbacks are hitting the rental market in Dubai. According to property agents, the rentals of luxury properties, dropped by 25 percent last month.

Residents in Dubai are still confused about the necessity of a rent cap in 2009, while the cap for 2008 was set at five percent. However, in the opinion of Bin Galita, a rent cap is not required in 2009, as the current year, being a tough one may not interfere much with rents. But, the rental rates should be fair to both tenants and landlords.

Rents in Dubai would begin to decline in third quarter of the year. But, with the market witnessing correction, commercial properties seem more affected than residential.

With increase in job lay-offs, it is likely that more families would leave the country, thereby the availability of apartments and villas would increase. To add to this, about 32,000 new housing units are likely to be released this year, which would further increase the number of units available in the market.

However, as of now, the Gulf News has reported that in the absence of a new announcement, the current five percent rent cap would remain valid.

The Rent Committee feels that the landlords still cannot increase rents beyond five percent, and tenants are free to file complaints against landlords if there is a violation to existing law.

Labels: Property Law, Rentals

"; Rental demand will remain robust this year, but will increase at a slower pace in 2009, predict industry experts. The officials also expect a drop in residential rents in Dubai and Abu Dhabi.

The Chairman of Chamber of Commerce and Industry, Salah al Shamsi, said that rents are likely to drop between 10 and 15 percent in Abu Dhabi during second half of this year, and may fall even further during 2010, with several new units likely to appear in the market.

A study conducted by Truth Economic Consultants, revealed that 72,285 units would hit Abu Dhabi market by 2008-09, out of which 37,851 units would be available in 2009.

Al Shamsi said that rents and value of property have not yet been affected by the global crisis, and the prices have not fallen as much as in other emirates, probably due to high demand for residential units in Abu Dhabi.

However, experts say that rental demand in Dubai would grow at a much slower pace than before. The Chief Financial Officer of Landmark Properties, Charles Neil, when speaking to the media said that although rental prices are likely to remain stable in 2009, they will initially soften during the first and second quarter.

The Managing Director of Asteco Property Management, Andrew Chambers, when speaking to the media, said that there still exists strong demand for rental properties across all emirates including Abu Dhabi and Dubai, as the two emirates are already witnessing scarcity of readily available units.

The real estate agents in Dubai state that in 2008 the villa market in UAE has seen maximum increase in rental prices due to limited availability of villas.

Several real estate experts including Asteco's Chambers, Landmark's Neil, and Cluttons' Macfarlane, CEO of Wasl HEsham Al Qassim, and Dubai Real Estate Corporation have all said that rental yields in UAE have remained attractive in comparison to international markets.

However, the market is now more demand-driven, and keeping up to customers expectations would be the key for growth in future, they said. The experts advised that investor should carry on research and invest in buildings with design elements, finishing and layouts preferred by customers, apart from areas only preferred by end-users.

Labels: Market Trends, Rentals

"; Dubai's Real Estate Regulatory Agency (RERA) has completed the much-awaited rental index and is awaiting the approval of the Rulers Court. A senior official of RERA has revealed that the index would be rolled out soon after obtaining approval.

The Director of RERA, Mohammed Khalifa bin Hammad, said that the rental index for commercial and residential units would soon be launched. The regulation for its execution has been already finalized and is awaiting approval of Rulers Court. Once approved, the index will be published in newspapers.

RERA revealed that it is not mandatory for landlords to abide by the rental index, although, a range would be set for residential and commercial units which the people can use to refer for comparing rents in various areas of Dubai. This would serve as a reference point during a dispute between tenant and landlord.

During a dispute, Dubai Municipality or any such concerned authority will have to consult the index before taking any decision. The index would form a benchmark in solving rental disputes, Hammad explained.

RERA has been involved in the index compilation work for the past six months. It has now completed updation until the fourth quarter of 2008.

The current rent cap for Dubai is five percent as of 2008, and the government has not amended the cap ever-since.

The Rental Index would also be a base to calculate rents for the authorities and people concerned, said Andrew Chambers, Managing Director, Asteco.

In mature markets usually a broad range would be available and so introduction of index is a good step for maturity, Chambers said.

View RERA Rental Index 2009

Labels: Property Law, Rentals

"; A shortage of about 28000 housing units in Abu Dhabi is likely this year, with the rents forging up, adding to inflation in the UAE capital.

The current projects that are nearing completion will form only 20 percent of the required housing.

As per the report from Chamber of Commerce, the shortage in housing units will lead to increase in rents, which constitute the largest portion of consumer spending and is estimated to be not more than 40 percent, leading inflation to reach its maximum heights, the report said.
The report said that the housing crisis is gaining momentum, with the total demand for units bound to rise by 70,000 towards 2010.

According to a senior official, Abu Dhabi is considering a possible lowering of annual cap on rent increases (from 5 percent to 3 percent) for properties.

Inflation in Abu Dhabi touched 12.9 percent during the second quarter, from 11.5 percent during the first quarter. This is as per the preliminary data by the Abu Dhabi Planning Department last month.

The body then retracted the data, saying that it was working on new consumer price index. Dubai has introduced an annual rent cap of 5 percent this year.

Labels: Abu Dhabi, Rentals

"; Boasting 365 days of sunshine, population growth and reliable economic growth, apart from a booming tourism hub, the UAE is also witnessing massive demand for rental properties. This comes as a tempting package for prospective buyers, states a report in Gulf News.

The new property law which regulates the mortgage process, protecting the rights of borrowers and lenders, making considerable advancements in the home financing market of UAE, offers more choice to consumers than before.

The UAE market is rapidly developing, when compared to markets in places such as the US and the UK, with the central bank data revealing that the mortgage lending in the UAE jumped 55 percent in the year till March.

Another factor worth noting when talking about home ownership in the UAE is the huge demand for rentals in the residential sector. Even the business men who have relocated to the emirates are getting disposed towards purchasing homes in the UAE.

Mortgage lenders are agreeing to offer finance to both end-user and investment purchases, and this makes the prospect of buying-to-rent and second-home purchases even more attractive.
Some confident owner-occupiers who comprise 70 percent of the market are willing to take out finance against existing property to raise cash for secondary purchases which indicates the fair manner in which UAE market is being perceived.

Home financiers, led by Islamic organizations are enjoying a 60 percent slice of the market, and are facing tough competitions from foreign banks keen on getting a slice of the action.

International and local mortgage lenders are striving to make it easier than ever to borrow money for property purchase in the UAE and most mortgage providers can offer customers a list of lenders to choose from.

Flexible and varied home loans are available from various sources, and it is getting all the more easier, to finance commercial, off-plan and under-construction properties, given that the planned property is registered with Dubai Land Department as per the terms of new mortgage law.

Also, it is worth pointing out at this instance that UAE market is standing firm, when the markets elsewhere is witnessing the impact of global slowdown, with the dirham still being pegged to the dollar. This implies that although supply is surpassing demand, rates are sizeable, and the UAE central bank can be forced to track number of US interest rate cuts and home loan rates are lower than during the same period three years ago.

Recent reports state that property prices in Dubai have grown over 70 percent beginning 2007, and more than 20 percent since the beginning of this year. So currently, buyers in the UAE are not looking at two to three percent profit gain in a year, but, the margins expected have grown considerably high. With such profits, interest rates are a secondary consideration.

Labels: Market Trends, Mortgages, Rentals, UAE

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Labels: Abu Dhabi, Office Space, Rentals

"; Although the slowdown in residential rates continues in Dubai, there is light at the end of the gloomy rental tunnel, reports Gulf News.

Dubai, with its large population, has witnessed the negative effects of rental increases that stretch beyond the wallets of common man. Hence, such news comes as solace for Dubai population.

However, there will be no considerable residential rental increase compared to that during the past three months. On an annual basis, the average residential rates in Dubai, increased by 22 percent, says Asteco's quarterly report.

The Research Manager at Cluttons UAE, Mathew Green, says that although the current rental growth is lower than what was seen two years ago, the figures continue to remain strong and unmanageable for the majority.

He revealed that, however, no significant declines in growth rates are likely during the next few years, with supply failing to meet the high demand. The rental growth for apartments is being overshadowed by villa market with acute shortage fuelling huge increases.

According to Asteco, the increase in rents of villas is the direct result of continuous undersupply, marking a 20 percent increase compared to the previous quarter.

"The continued undersupply of townhouses and villas, compared to growing demand from UAE nationals and well-earning expatriates have led to huge leap in villa rents," said Asteco report.

However, the supply of mega-projects such as the Dubai Waterfront, Dubailand and the Jumeirah Golf Estates will help in soothing the undersupply during next two years.

Better Homes, agrees that the residential rates are unlikely to drop and in contrast, it is likely to increase during the first and second quarters of 2008. However, there is stability, due to rent caps imposed for tenants residing in existing properties. However when considering leasable properties in these areas, rents are still on the rise, due to undersupply of rentable properties.

According to analysts, the rates will begin to stabilize when more developments are delivered. It has been noted that Sheikh Zayed Road in Dubai is one of the most popular locations, recording highest annual rental growth of 51 percent. This is followed by Bur Dubai with an annual rent increase of 42 percent. With the availability of rentable accommodations coming only from new apartments, landlords are taking advantage and demanding high rents from desperate home-seekers, it is said.

Labels: Market Trends, Rentals

"; Rents in Abu Dhabi, although have reached their maximum best, are likely to increase further, during the next few years, in view of the worsening shortage in supply, reveal recent reports.

According to the Abu Dhabi Chamber of Commerce and Industry The low and middle income expatriates will be the worst affected with the increase in rents, which have more than doubled during the past three years, while the salaries have remained the same.

After years of stability during 1990s and 2000, the property market in Abu Dhabi witnessed a jerk in 2006, due to the strong domestic demand, caused by an economic upsurge that shot up rents to sky-high levels, despite the introduction of rent caps by the government.

The Chamber reports that although the real estate market in the capital was more or less stabilized in 2005, with the 287,000 housing units being able to cover the domestic demand, a surge in demand during 2006, did not meet a similar supply growth. This resulted in a shortage of 3000 units. During the year 2007, the demand-supply gap was more than doubled and touched nearly 8000 and is further expected to touch 20,000 by this year.

The Chamber, in its report, states "Most housing units which will enter the market this year will cater to the hig-income sector, while the low and middle-income category will be the victims of shortage and rent increases."

"We expect a record supply shortage in housing units, which exceeds 20,000. This will aggravate the property situation in the emirate, pushing it from bad to worse, which in turn will affect the economic activities in the emirate and push inflation to new record levels," the report said.

According to property dealers, rents in the capital have increased by more than 25 percent in 2007, and by 15 percent during first quarter of this year. The increase has been attributed to the huge increase in demand and rapid growth in population, an intensifying influx of expatriate workers due to surge in projects in the Capital, failure by landlords to abide by the rent caps, and the concentration of property developers on costlier properties that caters to high-income sector.

"Buildings that are under construction in Abu Dhabi will cater to only 20 percent of the demand. This will only widen the supply shortage, and when coupled with the population growth, it will push rents to record high levels. As rents account for more than 40 percent of consumer spending, this increase will further aggravate inflation in the emirate," states the Chamber report.

Abu Dhabi has one of the highest per-capita incomes in the world, projected to touch Dh.225,000 in 2008. As per figures by the Abu Dhabi Department of Planning and Economy, population in Abu Dhabi has grown by 12.6 percent, and is likely to grow by 7.5 percent his year, which is one of the highest in the world.

Labels: Abu Dhabi, Real Estate News, Rentals

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Labels: Dubai Real Estate, Office Space, Rentals

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Labels: Dubai Real Estate, Latest News, Rentals

"; The price of homes in Abu Dhabi is likely to shoot-up by at least 20 percent in the current year, states a report from Sorouh Real Estate.

The report indicated that demand surpasses supply, and negative real interest rates are contributing to more investments. The Europeans are investing in the UAE, with an intention to make better use of their Euros, while the dollar is declining, taking the UAE dirham with it.

The five-fold increases in oil prices during the past six years have boost Abu Dhabi's economy and the low interest rates have led to more investments in real estate.

The Chief Property Development Officer of Sorouh, Gurjit Singh, said "We easily notice a growth of 20 percent this year. We are seeing the growth phase and it is still very early on the clock."

He said that the average prices for residential sectors range between Dh.1300 and Dh.1700 per square foot. The numbers of Europeans investing in Abu Dhabi residential sector falls between 8 and 12 percent, and the numbers are on the rise due to the strength of Euro and the Pound.

Sorouh is also developing realty projects worth Dh.40bn, Singh revealed.

Labels: Abu Dhabi, Latest News, Rentals

"; As per reports, Dubai continued to witness huge demand for office space last year, with the emirate reflecting one of the highest global rental yields for commercial premises, ranging 17 to 18 percent.

Asteco, in its quarterly market research, reported that there was a huge increase in capital values, particularly, in locations where the new buildings were nearing completion.

The rents for office space grew by five percent on an average in comparison to the last quarter. The highest rent rates were noticed in Oud Metha and Sheikh Zayed Road, with 6 and 12 percent respectively, as per the fourth quarter report of Asteco.

When compared to the rates during the corresponding period in 2006, the office rents in Dubai last year saw a considerable increase of 44 percent, and the occupancy rates continued to touch 97 to 99 percent, the report revealed.

The Director at the Research Valuation and Consultancy at Asteco, John Allen, says "The increase in prices indicate the fact that the commercial sector of Dubai does not have a liquid secondary market at present. The limited delivery of new office premises over the last couple of years has brought about an undersupply in the market, resulting in strong surge in office rents and sales prices."

Asteco anticipates that the commercial units would witness another surge in prices, as the buildings near completion next year. However, according to Asteco, a shortfall in supply of of nearly 18million square feet of office space would be experienced next year due to delay in construction.

"We expect that landlords would get more competitive with increase in supply. More high quality finishes that are being offered, will be tailor-made to suit the requirement of tenants, and most important, the rents will stabilize reflecting true market values," Allen said.

A new factor that will have a major impact in the commercial property market during this year, will be, the implementation of the new 'green rules', which would become effective this year.

Labels: Commercial Property, Latest News, Rentals

"; The Annual rent cap in Abu Dhabi has been reduced from 7 percent to 5 percent yesterday. This was done to regulate the high rentals and housing crisis in the emirate. The decision is to take effect immediately.

The decision has been issued by the Abu Dhabi Executive Council, based on Law No.20 for 2006, that speaks about landlord-tenant relationship, and aims at curbing the negative impact of high rentals on the emirate's competitiveness, sustainable economic growth and social stability.

Such a move has been initiated in response to recent reports which pointed out an unprecedented increase in rents. The new contract will remain subjected to inflationary pressures, based on factors such as the cost of construction, and shortage of supply.

The Chairman of the Construction Committee, Khalfan Al Ka'abi, said "This is a step in the right direction, and this will have a real effect on residents. However, some more time may be required to solve the housing crisis completely."

Certain units will be delivered this year, but, the majority of the units will be delivered to the market only in 2009, and this supply would ease the market to a great extent, he added.

Labels: Abu Dhabi, Property Law, Rentals

"; The Dubai Government is shortly expected to announce a tenancy law, that will re-define the landlord-tenant relationship, while also managing the rent disputes, and a comprehensive legal framework would be introduced, for the booming residential rental market in Dubai, said a top government official yesterday.

At the moment, it is the responsibility of Rents Committee to settle disputes through an informal arbitration system. This is likely to be replaced by a new tenancy law, which has been already approved by H.H. Shaikh Mohammad Bin Rashid Al Maktoum, the Vice President, Prime Minister of UAE and Ruler of Dubai.

The Assistant Director General of Dubai Land Department, Mohammad Sultant Thani said that all issues pertaining to rents, tenancy, bachelor accommodation, subletting, landlord-tenant disputes and all other social aspects, will be tackled by the new law. However, whether the rent cap too, will be regulated through the new law, is yet to be known.

Increasing rents have been a big cause of worry for nearly 85 percent of Dubai's expatriates, who form 1.44million of population, a majority of whom live in rental units. During the past few years, rents have hiked rampantly.

In the meanwhile, Thani revealed that so far, the Dubai Land Department, has registered 72,000 units ever-since the department was established in 1960s, while last year, we have registered 11,000 units.

Thani mentioned that the new law will further strengthen the Dubai property market, as there has been a steady growth in the property market ever-since expatriates were allowed to own property. Once the law takes effect, all existing freehold apartments, residential units and villas for rent, will come under the law.

Labels: Dubai Real Estate, Latest News, Property Law, Rentals

"; A new property index will soon be released in Dubai, which would be of help in establishing appropriate rents for properties in the emirate, so as to control the shooting rental prices.

The Real Estate Regulatory Authority (RERA), has said that the new index would come into effect from 15th of this month, setting up the minimum and maximum chargeable rents for properties in particular developments.

With the introduction of property index, the landlords are left with no choice but to set rents within the stipulated limits. The tenants and those in the look out for rentals, will also be benefitted as it will serve as a guide to ensure that they are not being overcharged. Any complaints thereafter could be then reported to the rental dispute committee.

Dubai has issued an annual rent cap of 5% for 2008, which is lesser in comparison to the 7% capping of 2007.

Labels: Dubai Real Estate, Property Law, Rentals

"; The Vice President and Prime Minister of UAE and Ruler of Dubai, H.H. Shekh Mohammad bin Rashid Al Maktoum, has issued a decree on 27th December 2007, lowering the annual rent cap in Dubai by 5% from the existing 7%, beginning 1st January, 2008. This rent cap would be implemented by the RERA (Real Estate Regulatory Authority) and the Dubai Land Department (DLD) in 2008.

This new rent cap would be applicable to new tenants, whose rents were not increased last year. However, for those tenants, who have had a rental increase in 2007, there will be no new increase.

At present, Ras Al Khaimah and Fujairah have both had a rent cap of 15%, while Abu Dhabi maintained 7% rent cap.

This move by the Dubai government has been much appreciated by the residents, realty developers and brokers, as strong demand and lack of adequate supply, had increased rents tremendously during recent past, which is a cause of concern among residents in Dubai.

The RERA Chief Executive, Marwan bin Ghalita, has warned that any increase beyond the proposed cap, is in violation of the rule, and in such a case, tenants should not agree to sign the contract.

Labels: Dubai Real Estate, Latest News, Property Law, Rentals

"; The office rents in Dubai, and Doha are likely to go up by 20% next year, as the demand surpasses supply, and due to the expansion of international business in the Gulf region, revealed the property services company, CB Richard Ellis.

"The top-quality offices in Dubai, cost as much as Dh.500 per square foot, and this in-turn could increase prices to Dh.600 per square feet next year, which would continue for 18 months, and thereafter the prices may probably halve to about Dh.300 per square foot in another five or six years with an increase in market supply" says Nicholas Maclean, the Managing Director, CB Richard Ellis.

However, at present, there are not enough supplies reaching the market, which would do no good to the businesses or for the government.

As far as Doha property is concerned, the demand is increasing, with an expansion in oil and gas companies, and the government is seeking new space. Although, the prices in Doha are lower than that in Dubai, the trends are the same.

On the other hand cities in India, Egypt, and Philippines are gaining advantage from the rising prices, as businesses turn to them for back-office operations, said Maclean.

The office space in Dubai is likely to more than triple touching 100 million square feet, as against the present 30million, during the next five to six years, Maclean concluded.

Labels: Dubai Real Estate, Market Trends, Office Space, Rentals

"; In a city, such as Abu Dhabi, which is so full of new real estate projects and in peak of construction boom, it is a startling fact to note that thousands are left struggling to find suitable properties to rent, reports Gulf News.

According to Property Consultant and Director of Global Hills, Diana Stebbins, a solution to this property hunt would finally be found during 2009, when people could buy and move into their own accommodation. However, for now, the villas are divided into four or six partitions for accommodation of bachelors and dual occupancy units.

The landlords and developers are taking full advantage of the current demand for housing, and have found this as a suitable opportunity to increase rent rates and prices.

A resident, who has been residing in Abu Dhabi for the past thirteen years, says that during the past two years, it has been shocking to note that some places have even doubled in rent rates. On the other hand, the landlords do not have much property to rent, as during the past. Even in case the property is available, it is sold out or rented within 24 or 48 hours.

The Abu Dhabi Chamber of Commerce and Industry has made it clear that the housing situation in only going to get worse, as by 2008, atleast 13,000 units would be required to keep pace with the demand.

Although, the endless campaign ads by development companies, gives a ray of hope initially that the demand may level out supply, a closer look would reveal that such properties are mostly businesses, hotels or housings meant for 'only' the upper-class who could afford to pay atleast Dh.15,000 to 20,000 a month for a "modern" single bedroom apartment.

This way, an average foreigner, moving into Abu Dhabi, hoping to live in a decent apartment and saving the extra money, is left in the lurch, as for those with an average income of Dh.12,000 a month, it is nearly impossible to save. With such a scenario, saving is the last thing that a single-income family could think of, as the money earned is being spent instantly.

Labels: Abu Dhabi, Property Prices, Rentals

"; According to reports by Asteco, a leading property consultancy, the rental rates in Dubai has almost tripled and has increased to an astounding Dh.270 to Dh.280 per square feet from Dh.90 to Dh.100 per square feet during the year 2005.

The commercial property sector in Dubai has witnessed major boost in office rents during the past few years, due to the high-demand generated by continuous influx of multinationals setting up their base in Dubai and the growth in existing businesses.

The Director -Research Valuation & Consultancy at Asteco has stated that this increase in commercial rents will continue until 2008, due to the delay in construction. But towards the year 2009, majority of new supplies will hit the market, thereby easing rental hikes.

The Asteco report reveals that rent on Shaikh Zayed Road has risen to Dh.350-Dh.375 per square foot, as against Dh.220-Dh.240 during 2006. Few other areas witnessing increased rentals are the Karama, and Bur Dhbai at Dh.265 and Dh.280 per square foot respectively. This reveals a corresponding increase of 51 and 24 percent respectively, over the rates of third quarter 2006.

The rents in Dubai apartments have increased by 25 percent from 2005 to 2006 and by 18 percent from 2006 to 2007.

Labels: Dubai City, Dubai Real Estate, Real Estate News, Rentals

"; Analysts are of the opinion that imposing a 'voluntary' rent cap, could turn the current situation in favour of Landlords, leading to a rampant increase in rent rates.

This statement came, following a leading government official's statement that Dubai's rent cap may become voluntary, permitting landlords to adjust rents on par with current market rates.

The CEO of RERA (Real Estate Regulatory Authority), Marwan bin Ghalita, said that the cap on price increases for renewed rents, when being renewed during the following year, should be done at a lower level than the current seven percent.

However, he emphasized that in case the commercial or residential property Landlords are of the opinion that the cap is responsible for keeping rents below the market prices, they can argue for an adjustment, based on benchmark rate, recommended by RERA.

According to Bin Ghalita, this system could be successful in reducing situations where the Landlords tend to evict tenants under silly pretexts for the sole reason of getting better rents.

"We will have a rent cap, but will permit the Landlord to adjust the rent based on market value. Both parties should be happy. If you are a tenant staying in an under-priced property, then there should be a way to resolve this. Currently, landlords feel that they have the option of kicking the tenant out of the property and re-renting it. We want to stop this," Bin Ghalita quoted.

He added that despite this, landlords will not be in a position to increase rents during the second year of a contract. In case the Landlords feel that the rent cap is responsible for keeping prices below market rates, they could seek help of Rent Committee to argue their case.

RERA has been assigned the task of registering all rental contracts in Dubai, allowing it to build up annual produced rental price index for every community in the emirate - a benchmark for rental rates.

Currently most residents feel that Landlords with an intention to avoid rent cap for renewal of contracts, are re-leasing the properties to new tenants at a higher rate.

Labels: Latest News, Property Law, Rentals

"; A senior official in the Abu Dhabi Rental Disputes Resolution Committee has clarified that Landlords cannot evict tenants for the sole purpose of change of business, from residential buildings to hotel apartments.

The Chairman of the Resolution Committee, Mohammad Rashid Al Hameli, said "Changing business from residential building to hotel apartments is not a legal ground to evict tenants".

Al Hameli mentioned that legally landlords do not own the right to evict tenants, unless in specific cases, such as approved demolishing for personal use, or for tenants failure to pay the rent, or subletting the property without the approval from landlord or for violating public norms.

In case of demolishing the building, the tenant should be informed about it six months in advance, and in case it is found that the landlord has not been living in the property after evicting the tenants under the pretext of personal use, or if the property has been re-rented to another party, the tenant can place a complaint before the committee, said Al Hameli.

Al Hameli also clarified that tenants should not obey any eviction orders by the landlords or other authorities, unless the eviction order has been approved by the Rental Disputes Resolution Committee. Speaking on eviction notices, Al Hameli advised that tenants have the right to receive notices but should sign clearly that although they are in receipt of the notice, the eviction order was rejected. At the end of tenancy contract, the tenants can then submit a complaint to the committee and deposit the rent or any installment pertaining to the building, as per the terms of contract in cash, so that it could be renewed.

It has been found that off-late, there is an increasing tendency for landlords to give away the building to hotel operators on a yearly lump sum rental basis so as to convert the building to hotel apartments.

Tenants have requested the Rental Dispute Resolution Committee to issue clear guidelines for tenants to understand their rights, particularly the circumstances under which they could be evicted from the building.

Labels: Property Law, Real Estate News, Rentals

"; Shaikh Sultan bin Mohammed Al Qasimi, the Crown Prince and Deputy Ruler of Sharjah, and Chairman of Sharjah Executive Council has passed the new rental by-law for the emirate, which states that the landlord cannot increase the rent until three years after signing the lease agreement, and every two years thereafter. The bylaws were issued to help the rent dispute committee jurisdiction to handle complicated procedures in a simple manner.

Numerous factors such as the quality of the property, the location, the number of storeys, the finishing of the building and the disputed property, the age of the building, the level of service, the space of property and the like, needs to be taken into consideration while deciding a rent hike.

Subletting the property is not allowed, except with the written approval by the property owner. In such cases, the tenant can transfer the lease to the new tenant with the landlord's approval, after which, a new contract should be signed and attested between the owner and the new tenant. According to the bylaws, it is the responsibility of the tenant to ensure the safety of the property and prevent damages, while the landlord is responsible maintenance of the property.

The Landlord cannot evict a tenant before three years after the signing of a contract, unless there is a violation from the tenants end, such as a failure to pay the rent within 15 days after the elapse of due date (in case of residential property) and within 30 days after due date (in case of commercial property).

However, the landlord can evict the tenant in case the property is required for any of his adult children to live in, if they have no other alternative, or in case the building needs extensive maintenance or needs to be demolished. But, landlords should never try to compel a tenant to vacate the premises, by adopting silly measures such as disconnecting the air-conditioning or water or power supply or on the pretext of cleaning and maintenance.

Labels: Latest News, Property Law, Rentals, Sharjah

"; Jamal Al Habtoor, one of the leading real estate agents in the UAE, has announced the launch of its new Rahat service, to cater to the growing hospitality sector with a fresh supply of its fully-furnished serviced apartments in the heart of Dubai Marina. The Rahat Service, which offers single, double and triple bedroom apartments, takes off at the right time, when Dubai is anticipating a growth in visitors due to the upcoming global networking events and winter attractions.

The Chairman of Jamal Al Habtoor Real Estate, Jamal Al Habtoor said "The Rahat service will offer visitors with spacious, cost-efficient and luxurious alternative to a regular hotel room. The apartment facilities consist of all the amenities and hotel-style room services at reasonable prices. The ideal location of being situated just minutes away from all major destinations in Dubai, is another added benefit."

There are about 15 sea view apartments, comprising the latest technological facilities such as a broadband internet, telephone, and cable TV which will be available for short-term occupancy. The apartments also offer round the clock housekeeping services and security.

The apartments are located in Dubai Marina, with easy access to the shopping centers, beach, and Sheikh Zayed Road. They are also just five minutes drive from the Ibn Batutta Mall, ten minutes from the Mall of Emirates, and just a short walk away from the new Marina Mall. There are also abundant food shops, fine-dining restaurants and cafes, offering a wide range of cookery in the vicinity.

Labels: Apartments, Dubai City, Luxury Homes, Rentals

"; Schon Properties, the developers of Dh.3billion Dubai Lagoon Development, has announced their special promotion offer during the holy month of Ramadan. Customers who purchase an apartment at Dubai Lagoon during the holy month, can rest assured that their existing rent will be paid for one year.


Considering the increasing rent rates faced by residents in Dubai, Schon Properties launched a campaign, in line with their campaign "we are listening," with an intention to gift something to all its new customers who buy an apartment during Ramadan.

On purchase of the apartment during the Ramadan period, 15% down-payment is required and then the rent rebate will start to occur on quarterly basis, after three months from the date of purchase.

The Vice President of Schon Properties, Danial Husaid said "Ramadan is a very special period for people in the region, and after our extensive market research, we understand that sky-rocketing rent prices is the biggest issue faced by the public in Dubai today. Hence, we have decided to offer any customer who purchases his home during Ramadan, any existing rent for full year. As, for most residents in Dubai, not having to pay rents will make a huge difference in their savings towards new home!"

The special offer from Schon Properties is valid only for the month of Ramadan, and until the stocks last. There are more than 100 apartments available for this promotion, and the stock includes mostly single and double bedroom apartments, with limited studio apartments too.

Labels: Lagoon, Rentals, Schon-Properties

"; The premium for secondary market sales of villas in The Palm Jumeirah have surged by 195 percent and The Meadows by 207 percent, during the second quarter of 2007, says a property management firm.



The Asteco's Director Consultation, Research and Valuation, Allen, stated "The demand for villas is high due to the average household size being high for both expatriate and nationals. Also, the villas are considered a luxury, and of better quality when compared to the apartments."

The average premium for villas was 79 percent during the same period last year, while the apartments premium was an average of 26 percent only.

Even rentals are on the increase with 12 percent rise in old and new Dubai areas, while the villas in Umm Suqueim and Al Garhoud areas witnessed 14 and 15 percent increase in rents. The villas in Jumeirah Islands and Hattan saw the maximum increase with 28 percent and 17 percent respectively.

Although the demand for rented and freehold villas is high, they are limited in supply. But, the rents are expected to drop in 2008 with the delivery of a bulk of new units, said Allen.

Labels: Dubai Real Estate, Rentals, Villa Projects

"; Renting out flats or rooms with preference attached to caste, religion or nationality has not been uncommon in Dubai until the recent past.

This trend however, seems to be changing with time, as now, certain property firms also prefer to rent out entire buildings to people belonging to the same nationality. Although, this could be considered as discrimination, the officials do not necessarily think so.

The officials are of the opinion that, as more and more individuals from various nationalities are being drawn to Dubai, when people of the same nationality live together, there is likely to be more harmony and peace.

For instance, the new building in Rigga Al Buteena Area, has eighteen flats comprising studio, and one to four bedrooms halls which has been set aside only for the Filipino nationals.

Talking on this issue, Nizam Hasan, a bachelor, is said to have mentioned that a building in such a prime location would attract huge bachelor crowds, particularly, with the rule imposed by the civic body that bachelors could live anywhere, except villas. He said "I though the company just preferred the Filipinos more than other nationalities, but on enquiry got to know that it was set aside only for Filipino community. This is not a good idea, as bachelors are already facing accommodation problems. This is discrimination, and the authorities should look into the matter."

However, Mohsen Kafri, the Manager of Pearl Island Real Estate, who manages the building, mentioned "We respect individuals of all nationalities. However, having been in this business for the past couple of years, we have seen that people of same nationalities live more harmoniously as they share same culture and communicate easily with one another."

Khafri also mentioned that they plan to acquire more residential properties which they wish to rent out to other nationalities in the same manner, and in future they intend to rent out flats exclusive for 'women' and 'men' separately.

The Head of Buildings Inspection Section of Dubai Municipality, Omar Mohammed Abdul Rahman, mentioned that although they have not come across a situation like this as yet, the real estate companies have the right to rent out the flats to anybody of their choice, and that, any such grievances could be brought to the notice of the rent committee.

Labels: Latest News, Market Trends, Rentals