Weekly Dubai real estate news digest. Issue 19

10.11.2013
    Dubai realty going strong 
Welcome to the nineteenth 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 19 |  November 10, 2013

Dubai realty going strong 

The year 2013 has proven to be exceptional in reviving Dubai's property market  and in just nine months, the city has been transformed from a buyer's market to a seller's market. 

While some experts have been concerned about a property bubble, Central Bank governor Sultan Al Suwaidi assuages fears by saying that a more prudent approach by banks and recently introduced mortgage caps will prevent a rerun of the 2008
housing market collapse. He further adds, "We're not worried. We can sleep at night."

Rents in high-end areas of the city continue to soar. According to Bayut.com statistics, rates are spiking in apartments for rent in Dubai Marina but Downtown Dubai, its strongest competitor, has failed to keep up with the rising trend. 

Seeing the market buoyant has encouraged developers to kick-start projects that have been on hold and also to announce bigger and better developments. In fact, Arabtec Construction has won a Dhs1.8 billion contract to build what will be one of Dubai's ten tallest buildings. With 77 floors, the tower will be the tallest building to start construction in Dubai since the global financial crisis and is the latest evidence of rebounding confidence in the property market. 

The Dubai developer Limitless is to restart construction of its first apartment block at The Galleries in Downtown Jebel Ali, consisting of 323 flats for lease. The project had stopped in 2010, following the global financial crisis, leaving the block 70 per cent finished.

Market Insight is aimed at examining the emirate's dynamic market and forecasting industry trends. The past two months has seen the announcement of exciting new developments, clearly showing how rapidly the market is recovering. With soaring demand, property owners definitely have the upper hand and this is why the government's recently enforced measures play a greater role in regulating the market. We hope our round-up of key stories and expert opinions have helped in understanding how the new regulations will help in preventing another market crash in addition to highlighting key new projects. 

 

Sincerely,

Pashma Manglani

Editor


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No chance of bubble, says Central Bank chief


With months of industry experts debating about the future of the Dubai property market, the governor of the Central Bank has come out to dismiss fears of another damaging bubble in the market.

A more prudent approach by bank lenders and the recently introduced mortgage caps will prevent a rerun of the 2008 housing market collapse, Sultan Al Suwaidi believes.

He explains that two reasons supporting his view are: banks have learnt their lesson from the last recession and new regulations regarding mortgage loans will balance the industry.

"I think banks have gone through the experience in 2006, 2007 and half of 2008. They know exactly that things that go up cannot go up forever. I don't think they will overextend themselves in the real estate sector."

Al Suwaidi adds, "We're not worried. We can sleep at night."


Read more on The National

New skyscraper to be one of city's tallest
  

Arabtec Construction has won a Dhs1.8 billion contract to build what is expected to be one of Dubai's tallest towers.

The mixed-used 369-metre tower will be located a block away from Burj Khalifa, the company announced. It did not disclose the client.

The high-rise tower, which has yet to be named, will be one of Dubai's ten tallest buildings. Designed by Atkins, the building will have 77 floors, comprising 22,000 square metres of office space on 18 floors and 908 sq. metres of retail area. The tower will include a 350-room hotel and 83 serviced apartments, as well as 180 luxurious apartments.

The new tower will be the tallest building to start construction in Dubai since the global financial crisis. 

 

Read more on The National

Land Department launches e-auction property portal

The Dubai Land Department (DLD) has launched a new real estate website that it says will "guarantee transparency and credibility in all data" for those looking to buy or rent property in the emirate.

The new 'eMart' site will allow buyers to access accurate data about Dubai real estate and will be an online portal for the auction, sale and rental of properties. 

Sultan Buttin Bin Mejren, director general of the department, said the new portal gives "tenants, owners and brokers full operational efficiency and reliability in a way that we have not had before." He said that the provision of accurate and reliable data would contribute to more foreign investment into the sector. 

 

Read more on 7Days

Landlords demand single cheque 


Dubai landlords are no longer offering renters the option of paying annual rent in 12 cheques, according to Emirates 24/7.

Instead, many landlords are demanding full-year rents to be paid in one, or a maximum of two cheques.

"Real estate agents that I have contacted all have asked me to pay the annual rent in one cheque," said Manish Rathi, a resident who has been looking for a studio in Dubai Marina. "The maximum they offer is a two-cheque payment facility." He said it is the same even in Discovery Gardens, a community much more affordable than Marina. 

Faisal Baig, director, PropSquare Real Estate, says landlords of properties that are in high demand tend to ask for payment in a single cheque. Owners of properties in the Springs, Meadows and Jumeirah Islands do ask for a single-cheque payment. 

 

Read more on Emirates 24/7

'Be careful with off-plan purchases'


With the mortgage cap firmly in place, off-plan buyers should be careful with how they schedule their payments.

"Many off-plan buyers pay 25-30 per cent as down payment and the rest at the time of handover," says Chandrakant Whabi, CEO of Acrohouse Properties. "However, if a bank refuses to classify the property as completed at that time, the buyer will have to pay an additional amount in equity along with the 4 per cent registration fee." 

Properties will not be qualified as completed without a handover letter from the developer, which is required to qualify for the 50 per cent loan-to-value fro the bank, he explained. Property owners face an added risk that a developer might refuse to issue a handover letter without first receiving full down payment. 

Off-plan sales in Dubai were made much more accessible to end-users with the Central Bank allowing mortgage disbursals of up to 50 per cent of a property's value on such transactions. 

 

Read more on Gulf News

Emiratis among top global realty buyers


UAE nationals have been placed eighth on the UK-based Knight Frank's list of most important buyers of new-build residential property globally.

London, Paris and Geneva are the top three cities where Emiratis are buying two or three-bedroom apartments with the average price of $2.5 million, the global consultancy said.

Indians come tenth on the list with London, Dubai and New York being their favourite property investment destinations. 

 

Read more on Emirates 24/7

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