Weekly Dubai real estate news digest. Issue 21

24.11.2013
    Dubai growth 'sustainable'
Welcome to the twenty-first issue of Market Insight, your weekly guide to what's happening in the Dubai real estate market.

3 days to go for Expo 2020 announcement! 
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MARKET INSIGHT. Weekly guide to Dubai's property scene
Issue 21 |  November 24, 2013

Dubai growth 'sustainable'

Recent regulatory measures introduced to help sustain and regulate Dubai's property market are already starting to take effect, with a recent cooling in the rate of growth, positioning the market towards a more sustainable pace of growth.

According to research by international real estate consultancy Cluttons, the steps announced by the UAE Central Bank in October to set limits on the size of mortgage loans for housing along with the Dubai Land Department's recent doubling of property registration fees are already impacting the volume of deals being recorded in Dubai. The firm said it is still too early to assess whether the regulations will succeed in curtailing growth at levels perceived to be more sustainable.

Average capital values continued to rise by 8%, but this is much slower than the 23% growth recorded during the second quarter of the year. At the same time, Dubai property prices are now almost AED2 million more than average prices in Abu Dhabi, according to analysis by propertyfinder.ae. 

Meanwhile, Abdulaziz Al Ghurair, chairman of the UAE's Bank Federation, reaffirms the country's desire to regulate the market. He pointed out that chief executives of the 51 banks that make up the federation have agreed to ask the country's central bank to impose fines on those members who fail to comply with recently-introduced regulations that cap mortgage lending. The current legislation doesn't include any penalties. 

Dubai developers are set to release billions of dollars worth of development land around the proposed Expo 2020 site as the countdown to the announcement of the bid decision begins. Tasweek, an Abu Dhabi-based investor, is among several developers working up plans for housing schemes close to the 438-hectare site. The company said it planned to start selling the first phase of 400 homes in the coming months and has already lined up investors. 

Market Insight is aimed at examining the emirate's dynamic market and forecasting industry trends. Greater stability can be seen in the market, as a result of government regulations. With the deadline for the Expo 2020 announcement just around the corner, developers are readying for a rush of investment for properties near and around the proposed site for the expo. We hope our round-up of key stories and expert opinions have helped in understanding the steady growth the emirate is expected to witness in the foreseeable future. We'll be following up on all things Expo 2020 to update our readers in the following issue. 

Sincerely,

Pashma Manglani

Editor


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Rampant growth slows down


Dubai's rampant house price growth is slowing down as government measures to cool the market kick in.

According to property broker Cluttons, average house prices in Dubai grew by 8% during the three months to the end of September - a respite from the 23% increase the company reported for the previous three months. 

In a property market report, Cluttons said that average Dubai property prices are now 53% higher than a year ago and 47% above the bottom of the 2009 market.

Cluttons' findings show higher rises in property prices than comparable research by Jones Lang LaSalle, which reported an average gain of 6% for the third quarter. Cluttons found a 3% average rise in Dubai rents. The report shows that rents rose most rapidly in Dubai Marina, where they gained 10.1% and in the Emirates Living neighbourhood, where they rose by 8.7%. 

The broker attributed the slower rate of growth to the Dubai Land Department's decision to double the transfer fee on each sale from 2% to 4%, a move made to reduce property flippers who buy off-plan flats and sell them almost immediately to capitalise on the rising market. 

 

Read more on The National

Dubai property prices AED2m higher than Abu Dhabi

Dubai property prices continue to skyrocket with the average house price now almost AED2 million higher than prices in Abu Dhabi, according to a fresh analysis by propertyfinder.ae.

In a statement, the property portal said the observation was based  on live market statistics from Market Price Live, its up-to-the-minute data centre.

It reflected the steadily increasing property prices in Dubai and the broad recovery the emirate's market continues to experience this year.

"Average asking prices in Dubai today stand at AED5.1 million, while those in the capital figure at AED3.3 million," says Renan Bourdea, managing director and partner at propertyfinder.ae. "Whilst Abu Dhabi's property prices have increased over the course of the year, Dubai's residential prices have risen more significantly, widening the gap in property values between the two emirates."

 

Read more on Arabian Business

Banks talk tough amid bubble concerns 

As major banks in the West are hit with multi-million fines for breaching increasingly more stringent regulations, the head of the main UAE banking industry group came up with a somewhat surprising request: please fine us, too.

Abdulaziz Al Ghurair, chairman of the UAE's Bank Federation, said that chief executives of the 51 banks that make up the UBF, agreed to ask the country's central bank to impose fines on those members who fail to comply with recently-introduced regulations that cap mortgage lending. The current legislation doesn't include any penalties.

"We will ask: please fine the banks," said Al Ghurair. "That's how transparent and tough we are." The federation will also ask the central bank to block banks from conducting relevant activities and to suspend employees in case of violation of the new rules.

The federation is also introducing its own code of conduct for the domestic banking industry. It covers aspects such as risk controls, treatment of customers, market conduct and regulation. Banks found neglecting the code will be "named and shamed" online, according to Al Ghurair.  

 

Read more on Wall Street Journal


'Expo 2020 will boost demand for Dubailand'

Dubailand, a mega mixed-use master development by Dubai Properties Group, is witnessing renewed interest from third party investors due to its proximity to the World Expo 2020 site.

"Centrally located between Dubai International Airport and Al Maktoum International Airport, Dubailand is attracting significant interest by third party investors due to the diversity and potential offered by the district, coupled with its close proximity to the World Expo 2020 Dubai site," said DPG, the real estate arm of Dubai Holding, in a statement. 

Districts such as Arjan, Marjan and Liwan, which are close to the Expo 2020 site, offer good potential for development, says DPG. 


Read more on Emirates 24/7

UAE invests in solar tech for buildings


A Dubai company hopes to revolutionise solar panel construction by developing cladding panels for the sides of buildings.

Dubai Investments said that it has established Emirates Insolaire, a joint venture with SwissInso, a Swiss technological specialist, to produce solar panels that can be integrated into building cladding. The Investment Corporation of Dubai owns 11.5% of Dubai Investments.

Emirates Insolaire, which Dubai Investments owns 51% of, will manufacture the coloured solar glass that can provide 10% of the global solar panel market over the next four or five years.

The new panels use special Kromatix technology, developed with the help of the Swiss Federal Institute of Technology, that can be integrated seamlessly into the facades of buildings. They will be initially manufactured by Emirates Glass, which specialises in producing energy-efficient architectural glass.

 

Read more on The National

Al Attar Tower, most colourful


Dubai is host to many news-making skyscrapers, whether it be for being the tallest in the world or in the city. However, now a Dubai tower has made news for being one of the most colourful.

The 130-metre-high Al Attar Tower, clad in dark-green glass and gold facade elements, has been named among the world's most colourful hi-rises by Emporis, the international provider of building data.  

Construction started on the 32-storey tower in 1994 at an estimated cost of Dhs85 million. 

Emporis says that some buildings across the world are a "real riot of colour" with vivid facades in scarlet, turquoise or canary yellow or even combining all the colours of the rainbow. Its report states that colourful buildings do not just provide a welcome change from the monotony of blocks, but can also "have a positive effect on the mood."

 

Read more on Emirates 24/7


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