Dubai Property Prices shows an Interesting Trend

Dubizzle, the leading property classifieds website in MENA, reports the latest UAE and Dubai real estate property trends in its Q2 2015 report. The report includes insight on how real estate property prices are changing in Dubai Marina, Old Dubai, and other highly preferred areas.

The report reveals that Dubai Marina, being in a very desirable location, is still the most sought-after Dubai real estate location, with over 4.9 million searches between April and June this year. For two consecutive quarters, Dubai Marina holds the top spot among other communities in Dubai, with over 20 million searches made in Q2 2015. Properties in Dubai Marina went down by 18% and 14% for studio units and three-bedroom apartments, respectively.

Palm Jumeirah, another primed real estate location Dubai, saw a change in property prices for both studio units and two-bedroom apartments, increasing from 1.45 million to 1.54 million and 3.2 million to 3.35 million respectively.
Meanwhile, Deira also had price increases due to high Dubai real estate demand and no new supply. This became a factor in making prices in old Dubai align with newer communities across the city. The rental price tag of a studio unit in Deira increased by 18%, while those in Bur Dubai rose from 60K to 65K, and three bedroom apartments changed from 150K to 158K.

When asked about the matter, Dubizzle’s Product Marketing Manager Ms. Ann Boothello said: “The Dubai property market is softening as per the price changes experienced in Q2 this year. Some areas have experienced while older areas in Dubai showed price increases in reflection to a maintained level of demand for these older units and the alignment of their prices with those in newer areas in Dubai. An example of this is that now a studio in Bur Dubai is rented out for AED 65,000 annually and in Dubai Marina at AED 70,000.”

“Prices of properties for sale decreased across Dubai, with the exception of studios and 2 BR apartments on the Palm Jumeirah increasing up to 6%. Abu Dhabi on the other hand, experienced price increases in for sale and rent properties; however Al Reem Island saw a drop in prices for 1, 2, and 3 bedroom apartments.”

RP Global inks Management Agreement with Jumeirah Group for new Dubai real estate Luxury Property

Jumeirah Group was chosen has recently been appointed by RP Global to operate a mixed-use development found in RP Global’s latest real estate in Dubai: a US$1 billion iconic tower, which will be the 2^nd tallest structure in Dubai.

The deal was signed by Dr. Ravi Pillai, Chairman of RP Global’s parent company RP Group of Companies, and Mr. Gerald Lawless, President and Group CEO of the Jumeirah Group. The signing ceremony was held at Jumeirah Group’s flagship property, the Burj Al Arab.

When asked about what he can say about the new management agreement, Mr. Gerald Lawless said: “RP Global is a company committed to excellence, and we look forward to working together and operating this outstanding property. Jumeirah has a reputation for luxury and exceptional hospitality, and our partnership reflects the strong synergies between Jumeirah Group and RP Global. As Dubai moves towards its tourism vision of receiving 20 million visitors a year by 2020, we are proud to be strengthening our Jumeirah portfolio in Dubai.”

 “We are investing close to US$1 billion of our own resources into Dubai’s real estate sector to develop a world-class tower that will be operated by the esteemed luxury hospitality brand, Jumeirah Group. RP Global is committed to superior quality and timely delivery and like the Jumeirah Group, we strive to create well designed, innovative lifestyle concepts for our buyers. Dubai’s resident population is growing rapidly and we are looking forward to adding an iconic tower to Dubai’s skyline in partnership with Jumeirah”, said Dr. Ravi Pillai about the management agreement.

The super-tall tower, once finished, will have a total area of over 3 million square feet, and promises to offer breathtaking views of Downtown Dubai and Burj Khalifa. Designed to be a luxury urban resort destination, the tower will have an smorgasbord of food and beverage outlets, conference and banquet facilities, an award-winning Talise Spa and Health Club, and a lively open-air roof top Sky bar. This Dubai real estate property will be situated in the heart of Business Bay, just behind the Dubai Metro station and parallel to Sheikh Zayed Road.

The tower will boast exciting features, especially its thrilling sky attractions, giving a dynamic interactive experience with views for its visitors high above buildings around Business Bay. The tower is designed by Atkins Global, the same world-renowned designing and engineering firm responsible for the world-famous Burj Al Arab Jumeirah. The tower is expected to be completed just before the opening of Expo 2020.

The Jumeirah Group currently operates 23 hotels all over Europe, the Middle East, and Asia. 25 other property plans are in the pipeline both for the company’s Jumeirah and Venu property brands.

RP Global is the real estate development company of RP Group of Companies. Established by Dr. Ravi Pillai, RP Group of Companies have operations in 20 cities across 9 countries. They have undertaken projects worth over USD$25 billion globally, and has a wide range of investments in hospitality, construction & industrial development, healthcare & wellness, education & trading, and operates in Middle East, Africa, Australia, and Asia.

Dubai Real Estate is Growing Up

Since 2008, the Dubai real estate has gone a long way from crashing due to the global recession that mightily affected the region. Now, the real estate in Dubai is flourishing and it’s brighter than ever.

The sudden growth has led developers to churn out many projects left and right. In effect, there have been increases in regulations made by the government in order to increase the amount of stability in the market. These regulations coupled with a number of economic factors have slowed down the real estate sector, although for a minimal mark. Is this a sign of a maturing market?

Typically there are many definitions of what may defined as a mature market, but a few key identifiers could be described as follows, according to Andrew Chambers, CEO of GGICO Properties and long time real estate veteran.

INCREASED REGULATIONS
-    Increased regulations aimed to reduce unscrupulous transactions.

MORE NEGOTIATIONS
-    Due to the high prices of units being sold, more buyers are asking for a bargain from sellers.

STABILIZING MARKET PRICES
-    With a steady, measured, and considered growth, a planned release of products will help stabilize the market. The market remains a little oversupplied at the luxury end and the impact of lower oil prices and stronger dollar will undoubtedly dampen the demand from overseas investors.

BROKERAGE MARKET
-    Less rogue agents and slowing down the amount of players in the market will be good for market confidence and stability.

AFFORDABILITY
-    This is now starting to be addressed by some developers in areas such as SO and DSC, where more mid level property, with good payment plans allowing people to buy to occupy.

CLEARANCE FROM BANKS BOOKS OF TOXIC/PROBLEM STOCK
-    The past 5 years has seen banks stuck with many non-performing or incomplete properties in default. This is not good for a stable property market. This seems to be resolved now, with many projects restarted with adequate finance and good business plan to see the construction to completion.

SUMMARY
Whilst there is some way to go for Dubai to be recognized as what the world sees as a Mature Market, Dubai has well survived turbulent times and a number of the issues raised here either resolved or in the process of being resolved. Nevertheless, it is still important to keep Dubai as being seen as a robust and very positive market position in the World’s eyes.

Dubai Real Estate Market Q2 2015 Look Back by Roots Land

UAE is set to continue expanding its economy for a sixth consecutive year this 2015, with a forecast of gross domestic product (GDP) growth at 4.5%.

The real estate sector was a major player in the economy last year, accounting for 13.3% of GDP—good for third. While the connected Travel and Tourism sector contributed 8.4% of the UAE’s GDP, a figure that is expected to grow by 5.1% this year. The sector generated 307,000 jobs, and jobs growth in travel and tourism of 5.4% is forecast for 2015.

The Government of Dubai strongly contributes to the expansion of the travel and tourism industry, backing major developments including the new Al Maktoum International Airport and the extension of Dubai International Airport.

Dubai’s population continues to expand, growing by 5% to 3.8 million UAE nationals and expatriates by the middle of this year. These figures underline the healthiness of the labour market. The annual inflation rate currently stands at 4.3%, which is lower than the 4.6% rate forecast for this year. Here is the Dubai real estate look back for the second quarter of 2015.

Apartments

The Dubai property market softened during the second quarter of 2015, with average apartment sales prices across the city falling to the same level as in the first quarter of 2014—although not enough to ruffle some feathers. It’s just the way it goes for a market that’s maturing.

The correction comes as less of a surprise when analyzing the volume of transactions, which did not keep pace with sales price growth but instead rose at a slower rate from the first quarter of 2013. Demand declined slightly in the first quarter of 2014 and rather more steeply in the second quarter of that year.

Prime area apartments

Average sales prices in Business Bay, a prime area, have risen gradually over the past few years even though demand has remained constant. In terms of supply, the district currently has more than 40 developments currently under construction by various developers, the majority of which are expected to be finished and handed over in 2016 and 2017. Additional developments are currently on the pipeline.

In Downtown Dubai, prices were 19% lower than at the 2014 peak. During the second quarter of this year, demand has been steady and at a healthy level.

Sales prices in Dubai Marina and Jumeirah Beach Residence (JBR) are declining with buyers’ interest picking up.

Palm Jumeirah sales prices are 12.5% lower than at 2014 peak. There are 20 projects currently are under development on the island with more at planning stage.

Villas

Sales prices of villas have been falling for the third quarter in a row. Since the beginning of 2015, buyers’ sentiment has strengthened, prices have continued to fall and, as a result, the number of transactions recorded in the villa segment has started to rise again.

Following the general trend across the emirate, the volume of transactions of prime villas in high-end developments within the Jumeirah Park, Jumeirah Islands, Emirates Hills and Arabian Ranches communities has kept increasing since late 2014. Prices in the first three areas declined in the second quarter, while sales prices at Arabian Ranches’ rose by 5%.

Among these prime communities, Arabian Ranches supply is the highest with more than 4,000 villas. The community is also the fastest growing. By 2018 Emaar, the developer will deliver nearly 2,500 new homes including the Mira Oasis, Lila, Azalea and Samara Rosa, and Rasha Villas sites.

SOURCE: Roots Land Real Estate

The Latest 2015 Abu Dhabi Real Estate Market Report

The second quarter of 2015 has gone past the window. We’re already more than halfway, and in just a little more than three months, we’ll be waving goodbye to yet another year. If you’re following the trend in the real estate market in Abu Dhabi, you might be waving goodbye with yet a smile on your face. So far, during the past two years, the real estate market in Abu Dhabi has experienced a noticeable upwards trend. Last year, sales growth in real estate has seen a double digit rate increase. Villa sales prices rose by 16% and apartments up 15%. Rent rates increased by 10%, and 9% for apartments, villas respectively. So how does this year stack up?

In the latest real estate performance reports, the second quarter of 2015 continues the trend that started more than 30 months ago. However, the growth of the real estate market seems to be stabilizing, with demand slowing down, mainly because of the government’s budgeting regulations due to the sluggish performance oil sector, UAE’s primary source of national income. In the short term, supply and demand will continue to remain above the line, but national spending and sentiment has to pick up the pace in order to sustain growth in this sector.

For the Residential Sales market, while prices have remained stable over 2015, there has been a step-down in the number of transactions. However, it’s not enough to deter developers in launching new products since they are still generally successful with them. Meanwhile, residential rentals have remained stable this quarter.

Office space demand remains stagnant, again due to the slowdown in the oil sector and government infrastructure investment. In spite of this, Grade A office rentals have remained stable due to minimal vacancies in quality projects. However, office completions in tow throughout the year are expected to increase the market-wide vacancy rate.

Retail rentals remains stable this quarter and this is expected to continue in the short-term. A number of Super Regional malls are set to enter the market on 2018, which will partly be supported by new population and tourism growth.

The Hospitality market witnessed solid growth in hotel guests above 2014 levels driven by wide ranging initiatives to grow the tourism sector. ADRs have also registered an increase of 4% in YT May compared to the same period in 2014. Hotel occupancies registered 77% in YT May reaching the same levels as 2014.

SOURCE: Roots Land Real Estate

Mortgage Facts in UAE

The UAE is fast regaining its frontier market status as Expo 2020 is approaching.

This forces the banks to follow suit. And they’re doing their work by introducing non-resident and under construction finance, new products that will boost their value in this emerging market. Now you might be thinking, is it time to get that mortgage I need? Here are some things you need to know first before moving forward.

TYPES OF MORTGAGES IN THE UAE

There are three types of mortgage rates currently available in the UAE.

1. Fixed rate – is a mortgage that has a fixed interest rate for a term between 1 to a maximum of 5 years. The benefit of a fixed rate mortgage is that the home owner will not have to contend with varying loan payment amounts that fluctuate with interest rate movements. Upon expiry, the fixed rate will revert to either a bank variable rate or to an EIBOR linked rate.
2. EIBOR rates – Set by the Central Bank, the Emirates Interbank offered rate is the average interbank borrowing rate of 11 lending banks and published daily on the central bank website.
3. Variable rate – usually predetermined by the bank itself, it takes into account various factors such as internal costs, liquidity, risk, default rate among other factors.

MAXIMUM LENDABLE AMOUNT

A change in Central Bank policy regarding all lending for expats has now been valued at 75% loan-to-value for properties under 5M AED and 65% loan-to-value for properties above 5M AED. Nationals can secure a larger mortgage amount, 80% on every property. All second property and/or investment property is now capped at 60%, with off plan/under construction being capped at 50%.

Remember: To be able to apply for mortgage, your debt service ratio (DSR) should not exceed more than 50% of your monthly income. This is calculated by adding up all of your monthly liabilities, plus your projected mortgage payment.

DO BANKS FINANCE ‘UNDER CONSTRUCTION’ PROPERTIES FOR ALL DEVELOPMENTS?

Only a handful of banks will lend on certain off plan developments, usually only to the bigger developers in Dubai (Nakheel, EMAAR and Dubai Properties). However, the banks are currently re-addressing their stance because of the emergence of many projects.

NON-RESIDENT MORTGAGE IN UAE

Non-residents can now access financing up to 75% loan-to-value, with rates as low as 4.75%. But not all banks have this product in their offerings. But with the Expo 2020 spotlight looming over real estate in Dubai, there are going to be sharp increases in enquiries from non-residents who are contemplating an investment in the UAE real estate market, which might roll things to the non-residents’ favour.

THE LENGTH OF THE MORTGAGE PROCESS

The average length of most mortgage approvals is around 4-5 weeks in total. If the bank needs to clear the mortgage with the seller, another 2 weeks can be added to the overall time.

HOW TO APPLY FOR A RE-MORTGAGE

You can ask for a review of your existing facility with a view to refinance to a better rate and/or more flexible product. Some banks offer reduced or zero processing fees for clients looking to change lenders.

CAN I RELEASE SOME EQUITY FROM MY EXISTING PROPERTY?

Most banks will allow you to remortgage your existing unit to release funds, although banks will limit their loan-to-values and others would only allow an equity release for a specific purpose such as to purchase a further property in the UAE.

SHOULD I HIRE A BROKER OR CONSULTANT?

There are around 33 lending banks in the UAE with over 100 mortgage product combinations so the choices are pretty extensive. That’s an advantage, but there is a disadvantage to this. Unless you’re willing to allot hours in a day to contact banks and ask around, then you should be in touch with a mortgage broker/consultant. A good mortgage broker would have contact with many different lenders and access to discounted pricing and favourable terms that individual borrowers can’t access.

Find an established consultant like Home Matters. These institutions have some leverage to deal with banks, and from time to time, can offer clients better rates, faster turnaround times, and terms compared to applying directly to your bank.

SOURCE: Roots Land Real Estate

Dubai Property Market Update - Dubai Properties

Real estate in Dubai is pulsing with life. It has experienced wonderful progress during the past two years, something that we’ve seen happen as 2014 rode into the sunset. The real estate sector has developed in terms of best practice, regulations and laws to protect investors and developers. Improvements on the mortgage regulations have made a positive contribution to ensuring sustainable market growth.
      
The latest industry reports have seen pluses in price growth, although small. This means that these developments are effective and have positively impacted the market behaviour.

Dubai Properties, a developer and major player in the real estate market in Dubai market has been enjoying the position it has. And their strategies have allowed them to experience sustainable growth across their portfolio in 2014.

Strong demand from investors for the new residential project, Dubai Wharf that was launched at Cityscape, prompted them to release further units in Mudon and Remraam.

2014 has brought them optimism and success. Their strong sales has been a clear indication of the positive market conditions moving forward. And the strategy to develop practical, high quality, and sustainable projects in every segment and area of Dubai that offer essential amenities and facilities to enrich the lives of residents and end users has been nothing short of effective.

Dubai Property has already made over 36,000 residential units, 2.8 million sq. ft. of office space and over 1.2 million sq. ft. of retail space across key areas of Dubai. The main projects we have launched in 2014 include: Mudon, Remraam, Manazel AlKhor, and Dubai Wharf, some of which experienced successes.

Dubai Properties will continue to grow their portfolio of retail, commercial, residential, hospitality and mixed-use projects, and they have future projects planned to tailor to the needs of real estate buyers and investors in Dubai. They will continue to align their business with the current market demand by launching new projects that provide strong investment opportunities.

Collectively, the real estate in Dubai is continuously experiencing strong growth, with investors looking for ‘value for money’ projects across the city like completed infrastructure, accessibility and quality building and finishing. Their projects will continue to meet this market demand in line with Dubai’s growth across the residential, commercial & retail sectors while continuing with the strategy to develop projects in prime locations of Dubai.

Winning the Expo 2020 presented a huge opportunity for Dubai real estate industry, and as a leading developer with a wide range of projects in every segment and area of Dubai, they are indeed in a good situation to take advantage of the increasing opportunities this will bring. 

Going forward, they plan to launch more projects that cater to the increasing population expected in Dubai over the coming years, from affordable apartments to villas and townhouses and high-end luxury accommodation across key areas of Dubai.

Source: Roots Land Real Estate

Abu Dhabi Real Estate Market Outlook For 2014/2015 - Asteco

Double digit sales growth in Abu Dhabi real estate market for 2014, with stable outlook for 2015.

• Villa sales prices rise by 16%, apartments up 15%  
• Rental rates increase by 10%, and 9% for apartments, villas respectively

Investors in Abu Dhabi real estate and Dubai real estate sector can expect sustained growth and relatively stable capital values in 2015, on the back of a strong performance in 2014, according to the latest real estate report from Middle East’s largest independent full service real estate company, Asteco.

In its Abu Dhabi Property Review: 2014 Highlights & 2015 Outlook, Asteco, noted that Abu Dhabi market had strengthened over the last two years and is set to continue in 2015—with continued rental growth across all sectors, in an encouraging investment climate.

Average sales rates for apartments and villas increased by 15% and 16% respectively in 2014, with a strong performance in H1, followed by a stable second half of the year. The volume of transactions also declined in H2 due to the shortage of quality stock for sale in the secondary market. The high sales volumes experienced at the newly launched projects in Ansam, Al Hadeel and Mamsha Al Saadiyat, proved that demand for quality projects exists.

“Popular master-planned developments for sale included Saadiyat Island and Al Raha Beach while Reem Island proved to be an attractive area providing more mid-market units. We expect apartment sales prices to remain stable this year as the market becomes more competitive due to the imminent handover of new projects,” said Jerry Oates, General Manager, Asteco Abu Dhabi.

Full year-on-year comparisons (2008-2014) highlight continuous apartment sales price growth since 2012, up on average by 48% for all areas combined, but still 26% lower than the 2008 market peak. 

Sales prices in Al Muneera at Al Raha Beach now stand at AED 1,425 per square foot on average, up 21% compared with last year, whereas rates at Reef Downtown also climbed 21% to an average of AED 1,000 per square foot. Marina Square saw a 17% increase to an average of AED 1,375 per square foot.

Villa sales prices also witnessed strong growth from their lowest level in 2012, growing 47% on average (for Al Raha Beach, Golf Gardens and Al Reef Villas during the period, with increases of 19% during the last year alone. Rates are however still 11% lower than at their Q4 2008 peak.

According to the report, the villa sales market will remain relatively flat as there will be limited prime and high-end product available for sale in the primary and secondary markets in 2015.

Despite continuous increases of 20% since their low point in 2012, rental rates for both apartments and villas are still considerably more affordable than in 2008 by over 40%, indicating potential for further growth. 

Apartment rental rates were up by 10% year-on-year (2013-2014) while villas rentals rose by 9%. A prime two-bedroom apartment currently rents for AED 175,000-180,000 per annum with high-end units achieving AED 140,000-175,000 (compared with the peak 2008 figure of AED 280,000) and mid to low-end units recording an affordable AED 90,000-120,000 (down from highs of AED 225,000 in 2008).

Villa rental rates are expected to increase during 2015 due to a shortage in quality villa units with occupancy rates expected to remain high.

An average four-bedroom villa could be leased for AED 239,000 per annum in Q4 2014, whereas the average in 2011 was AED 203,000 and AED 433,000 respectively in 2008.

The biggest increases in rental rates in 2014 were on Saadiyat Island and Marina Square on Reem Island where recent hand-overs of high-end projects achieved high occupancy levels leading to rental increases as landlords capitalised on strong tenant demand.

New mid to high quality developments at still relatively affordable rents are encouraging relocation by tenants to upgraded accommodation with older properties and lower quality projects being placed under increased rental and occupancy pressure. Since 2012 quality and recreational amenities have been a tenant priority across all areas and Asteco expects this to continue in 2015 with occupancy rates in popular developments maintaining their current high levels.

Asteco expects this to continue in 2015 with occupancy rates in popular developments maintaining their current high levels. 

“The Abu Dhabi rental market in 2015 is expected to see continuous strong levels of demand. A range of new projects are due for handover in 2015 including an anticipated 13,000 apartments and villas which will come online, will have an impact on the Abu Dhabi real estate market by creating greater competition, particularly in apartment rents,” said Oates.

Abu Dhabi’s office market was stable in 2014, as landlords of single-owned buildings maintained their asking rates. However, it is anticipated that as new developments such as ADDAX Tower on Reem Island hand over during the year, rates for multiple-owned office space in the Investment Areas could come under pressure as individual landlords compete to secure tenants. 

Since 2013, the Abu Dhabi real estate market has continued to strengthen, a trend Asteco predicts to continue throughout 2015.

Source: Roots Land Real Estate