Weekly Dubai real estate news digest. Issue 18

03.11.2013
    Buying into UAE's success
Welcome to the eighteenth issue of Market Insight, your weekly guide to what's happening in the Dubai real estate market.
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MARKET INSIGHT. Weekly guide to Dubai's property scene
Issue 18 |  November 3, 2013

Buying into UAE's success

With Dubai recovering rapidly from the recession and Abu Dhabi investing heavily into development, the Emirates is clearly on the global investor map - once again. In fact, the emirate actually made a place on the third quarter investment 'hot list,' issued by IP Global, which features the best investment destinations at the time. 

Investments continue to pour into the UAE from expats in neighbouring countries, including India. Burj Khalifa is among the favourite global locations for India's ultra-high net-worth individuals to own luxury residential properties, according to a new report by Kotak Wealth Management and CRISIL Research. Understanding the significance of these investments, Damac Properties is offering a refund on the cost of an air ticket for Indians who close a deal on its $2.5 billion Akoya by Damac master development.

Overall, the UAE has climbed a rank in the global prosperity index, coming 28th globally and first in the Middle East and North Africa region. Its economy sub-index was ranked 13 by the London-based Legatum Institute's Prosperity Index. 

Taking into account growing concerns about how quickly property prices have been going up, the UAE Central Bank has issued a new set of regulations on mortgage lending, defining the eligibility of borrowers, based on the loan-to-value relation. Now, expatriates have a mortgage limit of 75% for properties valued less than Dhs5 million. The maximum limit for a mortgage loan is set at 25 years. Home buyers will also no longer be allowed to seek personal loans or use their credit cards to meet down payment requirements. 

By issuing this system, the bank wants to ensure "all banks and financial institutions in the country have authorised and credible business criteria and effective frameworks that will control their mortgage loans," said Central Bank governor Sultan bin Nassir Al Suwaidi. 


Market Insight is aimed at examining the emirate's dynamic market and forecasting industry trends. The UAE's popularity among investors is definitely on the rise and while there are growing concerns of a property bubble, the UAE government has been implementing new measures to curb the practice of property flipping that was so common in 2008. We hope our round-up of key stories and expert opinions have helped shed insight on new regulations and measures being implemented.
 

Sincerely,

Pashma Manglani

Editor


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Central Bank issues new mortgage rules


The UAE Central Bank has issued a new set of regulations on mortgage lending, defining the eligibility of various categories of borrowers based on the loan-to-value reation.

For expatriates, the bank has set the mortgage limit for the first house (for owner occupier) at 75% of the value for properties that are valued less than Dhs5 million. If the value of the property is more than Dhs5 million, an expatriate borrower can borrow a maximum of 65% of the value of the property.

For UAE nationals, the loan eligibility is a maximum of 80%.

The maximum LTV for mortgage on property being purchased offplan is set at 50%, regardless of the purpose or category of the purchaser.

The maximum limit for a mortgage loan is set at 25 years and the maximum age for the borrower at the time of the last installment is set at 70 years for UAE nationals and 65 years for expatriates. The central bank also specifies that the debt burden ration should not exceed 50% of the monthly income. 

 

Read more on Gulf News


Dubai debuts on investment hotspot list 


IP Global, a leading property investment company specialising in securing prime investment opportunities in emerging and developed markets around the world, has announced the release of its latest Property Barometer for third quarter 2013.

This quarter, the barometer showcases only what it calls "bright" categories, therefore the best investment destinations at the current time. Dubai and Edinburgh make debut appearances in the third quarter investment "hot list" alongside U.S. destinations, including Chicago and New York; Australian cities like Melbourne and Sydney; and German cities Munich and Berlin. 

Paul Preston, director and head of IP Global Middle East, said: "We are pleased to see Dubai benefiting from rising economic confidence across the region. Here, prices have risen an impressive 11.9% in 2013 to date, with potential for more growth in a market that remains 30% below peak levels of 2008."

Rising rents and prices of residential apartments in established communities with access to Sheikh Zayed Road are making areas like Dubailand and Dubai Sports City more popular among renters and buyers.

 

Read more on Gulf News


Al Nahda rents skyrocket

Rents in the popular Al Nahda area, which sits on the edge of Dubai, are on the rise.

Apart from affordable rents, the proximity to schools, hospitals and a variety of restaurants, accessibility to major roads has helped the area gain popularity.

"Landlords are asking for what they want and people are willing to pay," said one agent in Al Nahda, Dubai. 


Read more on Emirates 24/7


7 of world's top 10 tallest towers in Dubai


Dubai hosts seven of the 10 tallest residential buildings in the world and four of them are in Dubai Marina, according to a new study.

The Princess Tower, in Dubai Marina, is the world's tallest residential building at 441 metres. It is followed by 23 Marina (395m) and Elite Residence (380m). In fourth place is The Torch (337m). A further three Dubai buildings also make the list.

The study was released by Emporis, an international provider of building data. It cited a ready availability of capital and relaxed urban planning regulations for the high number of tall buildings in the emirate.

 

Read more on The National


UAE ranks 28 in global prosperity index


London-based Legatum Institute's Prosperity Index 2013 has ranked the UAE first in the Middle East and North Africa region and 28th globally.

The country climbed one rank from last year, the institute said.

The UAE has jumped 20 places in the last five years in the economy sub-index and is now ranked 13th, as a result of increases in capital per worker, market size, five-year GDP per capita growth rate, expectations of the economy and perceived job availability.

In other sub-indices, the country was ranked 24th in safety and security; 26th in entrepreneurship and opportunity; 35th in health; 36th in governance and 39th in education.

Norway continued to remain on top of the list for the fifth consecutive year with Switzerland in second place, Canada in third, Sweden in fourth and New Zealand rounding out the top five. 


Read more on Emirates 24/7


No credit cards for down payment


Home buyers will on longer be allowed to seek personal loans or use their credit cards to meet down payment requirements, the UAE Central Bank has said.

"Down payment required from the borrower (home buyer) should be from their own sources and not from sources of borrowing, including personal loans or credit cards." said the apex bank.

The Central Bank also clarified that monthly payment must be made from salary, or income from work that can be verified or rental income. End of service dues will not be entitled to pay the mortgage. 


Read more on Emirates 24/7


Downtown popular among Indian investors


Dubai's Burj Khalifa district among the favourite global locations for India's ultra-high net-worth individuals (HNWIs) to own luxury residential properties, says a new report.

"Not only are ultra HNWIs gobbling up luxury homes in India, they are also looking at foreign destinations such as Dubai," Kotak Wealth Management and CRISIL Research said in their 'Top of the Pyramid 2013: Decoding the Ultra-HNWI-India' report.

Meanwhile, Damac Properties said it will refund the cost of an air ticket for Indians who close a deal on its $2.5 billion Akoya by Damac master development. Selling prices of properties in the project start from Rs8.5 million. Mumbai-Dubai return airfare are currently priced between Rs20,000 and Rs25,000. 

 

Read more on Emirates 24/7


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