Dubai Property Recovery 2 Years Away

Dubai’s sagging property market is still at least two years away from recovery, analysts predicted this week during Cityscape Global, the region’s largest property convention.

“All sectors of the Dubai market remain in the downturn phase of the cycle, with the likelihood of continued falls in average prices and rentals over the rest of 2010,” Jones Lang LaSalle said.

Another 9,000 residential units are expected to come on line in Dubai in the next year, according to the consultancy.

“Even if these are not completed and handed over in time, Dubai's residential market continues to be oversupplied and prices are not expected to recover before the second half of 2011, at the earliest," JLL said.

In addition to an abundance of space, “weak demand from foreign investors” will likely conspire to keep prices low, JLL said.

Chris Waight, associate director of Cluttons in Dubai, was more upbeat, but still predicted a two year gap before recovery.

“As long as the property supply doesn’t surpass the demand too much, we should see a stabilization of Dubai’s residential property prices within the next two to three years,” Waight told Emirates 24/7.

HSBC Report Property Price Rise in UAE

Those with property investment interests in the UAE may welcome research from HSBC which shows that property prices are rising in the emirates.
The new Property Ladder study shows that there has been a marked growth in the UAE property sector, in part spurred by a relaxation of maximum loan-to-value (LTV) rates that have allowed more people to get on the housing ladder.

“Anecdotal evidence also suggests that foreign investors seem to be back in the market and there are bulk buyers of property for investment purposes,” the report claimed.

Cash has continued to be the dominant force in UAE property sales, although mortgages are gaining ground and are becoming an important part of the market, the study goes on to state.

In March, HSBC announced that it would be relaxing its lending criteria for those looking to buy Dubai properties and elsewhere in the UAE, with the company now offering an LTV rate of up to 75 per cent on villas, 70 per cent on completed apartments and 50 per cent on off-plan property.Your browser may not support display of this image.

The recent opening of prestigious estate agency and property management firm Hamptons International in Abu Dhabi confirms the evidence of increased foreign investment interests. Recent ‘roadshows’ held by Hamptons in Abu Dhabi and Dubai attracted a number of UAE property development agencies, seeking to boost the healthiness of the region’s property market.

Speaking at the Cityscape Connect business breakfast, UAE real estate specialists including the chief executive of Dubai-based property agency Asteco, Elaine Jones and Steven Henderson, partner in legal firm Clifford Chance, concurred that the prospects for strong growth were becoming evident.

“Industry sentiment has moved into positive territory and it is equally important that Cityscape through the Connect series of events continues to provide a platform for open debate,” said Rohan Marwaha, managing director of the company.
From NUBRICKS

UAE property prices rise for the first time in months

Property prices in the United Arab Emirates increased in April and May, according to international bank HSBC.

Prices in Dubai and Abu Dhabi rose 4% in April compared with March and 5% in May, says the bank's latest transaction survey. But it warned that it is too early to call it a trend.

'Market data from April and May show a range of positive indicators. Agreed property sale prices are rising, volumes are holding up well, and banks have loosened their lending criteria,' said David Lepper, head of equity research for the region.

'However, we will not be able to discern a sustainable trend until later in 2009 and while we note these positive developments, the market as a whole is coming off a very low base, given the sharp declines since the market peak. Credit growth remains subdued, and the UAE economy still has challenges to deal with,' he added.

A survey of brokers by the bank also confirmed that prices have started to stabilise on the back of renewed interest and sellers pulling their properties off the market or putting them up for lease.

'Foreign investors also seem to be back in the market and the majority of transactions are being conducted in cash,' says a report from a team of analysts.

However compared with the peak in the market last September property prices are still considerably lower. Agreed prices are down 23% while asking prices were 65% lower.

Investment Property For Sale

Qatar’s property market remains strong as the economy continues to grow

DAMAC Properties believe that with today’s current Qatari economy conditions the government will continue to carry out all projects such as the New Doha International Airport at the cost of $5.5 billion, the $5 billion Lusail real estate project, the $5 billion tourist project in al-Khor and the $2.5 billion Energy City which will contribute to the economy growth in many sectors including Real Estate.

“All indicators in the Qatari market indicate that the economy is expected to perform at least as strongly as 2008 driven by energy production and related industries also in investments aimed at economic diversification,” said DAMAC Properties Chairman, Mr Hussain Sajwani.

DAMAC Properties sees one of the key factors for the market stability is the Qatari authority’s impressive macroeconomic performance in recent years, which has strengthened the economy’s resilience to the current global financial crisis and economic downturn.

“There is no doubt that the domestic investment program that was launched by the government has created diversity in the economic base. The banking sector would be one of the major beneficiaries of these projects and also regional diversification programs have also helped to boost the banks’ capacity to finance development projects,” said Mr. Sajwani.

DAMAC Properties first project in Qatari was “The Pizza” , launched in 2006. Last November DAMAC properties unveiled mega promotion for its residential development in Lusail Qatar by handing over the keys of a brand new 2009 Jaguar X Type with 1 year free insurance for purchase of any residential units during the promotion period.

The move came as part of the company’s commitment to the Qataris real estate market despite the recent changes in the investment climate in the real estate sector.

“Today Qatar’s real estate sector is showing signs of correction, this doesn’t mean the market is falling apart or the demand will stop. Although investors were showing a “cautious” approach to property investment in the region, but by looking at the given facts and figures, the medium term outlook for Qatar is still in good shape”.

“Even with the economic climate getting more and more challenged, there’s no doubt that out of these difficult times comes as a real opportunity, especially for long term investors “.added Mr. Sajwani.

Smart Heights Reaches Half Way Point

Smart Heights development reaches the half way point of construction.
Smart Heights, which will feature some of the latest gadgetry and office technology, has now reached the 15th floor and is on schedule to reach its final 21 storey height and be completed by the end of 2009. The main contractor for the building is ECC.

The development is one of two projects that DAMAC Properties has at TECOM – with its Executive Heights building already completed last year.

Smart Heights will offer 288,000sq ft of office space and already most of the 21 floors have been purchased or leased. Among the ‘smart’ facilities available will be security card access control, energy efficient lighting systems, automated boardrooms and business lounges and touch pad request screens for elevators with LCD response panels.

Currently mechanical, electrical and plumbing works are underway at Smart Heights so that all cabling, pipes and wiring is integrated and contracts for internal fixtures and fittings including signage, lighting and sanitary ware are in the process of being awarded.

Chairman of DAMAC Properties, Hussain Sajwani said that offering the latest technology was now becoming a necessity for developers and that office locations in Dubai had to differentiate themselves in this way.

‘A lot of thought and consideration went into the design for Smart Heights. Today company’s expectations are that they will have an office environment that will be designed to meet their every need and make their lives easier. The use of automation, electronics and also IT facilities should be designed with the customer in mind and we believe that Smart Heights will offer great options for these facilities,’ said Mr Sajwani.

‘TECOM will eventually become a vibrant business community and it will be a great location for companies with excellent access to both the Sheik Zayed and Al Khail Roads – in addition to the TECOM metro station which will be just a few minutes walk away.

‘We already know that Smart Heights will stand out because of its futuristic design – but it will also become synonymous with modern technology.’

In addition to 21 office floors, the building will have a health club and outdoor swimming pool on site for those who want to relax after the working day, with a day care centre, green landscaped surroundings and views over The Greens development.

Mr Sajwani added:‘ Our progress at Smart Heights is there for all to see as the building starts to become a permanent and prominent fixture on the landscape at TECOM.’

Freehold Property in Dubai

In 2002 the government of Dubai created freehold property zones in the city. For the first time foreign individuals could own property in the freehold areas of Dubai. This has resulted in an unprecedented boost in the real estate market leading to massive construction projects that are among the best in the world. The new law was established in order to enhance the confidence of property buyers in the legal system. The legislation was intended to attract foreign investment through international developers that always prefer to work in countries where the laws are straightforward and keeps things simple. Before the law was passed foreign nationals could only get a 99-year lease at a maximum but it was only since 2002 that they could actually own property in the freehold areas of Dubai. Another good thing about the legislation is that it helps to support 80% of Dubai’s population, made of non citizens, to rent out the property and lead better lives. Freehold property owners in Dubai can rent out their property on 99-year leases of their own.

According to the new laws people looking for buying property in Dubai will now have outright ownership of the construction as well as the land below it. There will no going back between freehold and leasehold. The new Dubai property law means that you can register the property under your own name with the Dubai Land Department. The best part of all this is that the Dubai Land Department uses the latest technology to manage everything so there is no need to worry about endless paper work and fussy rules and regulations. Everything is designed to work smoothly for everyone. Before 2002 the buyers kept a contract of the sale from the developer that allowed them to transfer the ownership only through the developer. The contract included an agreement that the freehold property would be granted as the freehold title as soon as it was ready. The new law says that the title deeds can be handed over the owners a lot sooner.

A huge impact of all this can be seen in the mortgage market because of the high rate of construction and property trading going on in Dubai. The resale market is boiling hot and international banks, especially Standard Chartered Bank, are vying to enter the market to offer financial loan options. Hitherto the same institutions were unwilling to enter the market because of legal uncertainties. It is now fully expected that many banks are going to aggressively enter the market and lower the mortgage cost and offer highly competitive prices and several new services. Introductory discounts are going to make a huge difference to the mortgage market. It has generally been noted that the lower the cost of the money the higher the price of property. One of the reasons for high rates of property in the world is the low cost of money.

Funds Made Available to Support Dubai Builders

Dubai companies should begin receiving funds “in a matter of a week or two” from the US$10 billion (Dh36.73bn) the Dubai Government recently borrowed from the Central Bank to help ease a cash pinch in the emirate, Nasser al Shaikh, the head of Dubai’s finance department, said at a conference today.

The funds are part of a $20bn bond programme launched last month to help Dubai meet its short-term funding requirements. The move has calmed investors, who feared that companies may face difficulties repaying debts this year, given the reluctance of banks to refinance loans because of a global credit shortage.

The emirate will decide how to administer the funds on a case-by-case basis, he said, adding the money could be lent to the companies directly or used to guarantee loans provided through local banks.

While Mr al Shaikh said companies in Dubai’s property sector would receive special priority, companies outside of the property sector would also be eligible. Shady Shaher, an economist at Standard Chartered, said he still expected the majority of the money to go into property companies, especially those partially owned by the Dubai Government. “Since the majority of real estate companies have government ownership, they would naturally get more support,” he said.

A crucial decision will be what amount of money is allocated to paying down the companies’ debts and how much is needed to simply boost the cash they need to continue paying workers and contractors
The National Abu Dhabi