Weekly Dubai real estate news digest. Issue 48

01.06.2014
'It will be different this time'
Welcome to the forty-eighth 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 48 |  June 1, 2014

'It will be different this time'


There's no doubt that real estate plays a central role in developing the UAE's economy. The question is whether market players have learnt their lesson from last time or are we just heading down the same route?

According to Nick Maclean, managing director, CBRE Middle East, "Lessons have been learnt from the crisis. I believe it's going to be different this time."

Speaking to The National, he says, "We're in a very interesting position. Last year, demand and prices soared, especially in residential, between 25 and 30% ahead. This year, it's been much less buoyant. The trajectory of the increase is down and the number of transactions is down. I see it as a pause for thought in reaction to the prices of last year."

Government actions - including the new mortgage regulations and the introduction of the stamp duty on transactions - act as a brake on overheating the market. However, owners and consumers have also got more savvy in their approach to property purchase and rentals.

Some industry sources hope that the current transactional lull will not endure for long. "Notwithstanding the decline, there are sufficient signs to indicate the market reaching its peak - market prices have remained robust," said Simon Townsend, business development manager at real estate consultancy DTZ. "There does not seem to be a marked decline in investor interest as enquiries remain strong."

He agrees that investor caution remains and with good due diligence, there is always an increase in transaction times. "It is potentially too soon to judge the meaning of the current reduction in transactions; a true position of the market and its strength (or otherwise) will be clearer towards the final quarter of the year."

Market Insight is aimed at examining the emirate's dynamic market and forecasting industry trends. Opinions differ on what this "calming down" period in Dubai's realty market means but for most industry experts, it's apparent that the market has learnt its lessons and more efforts are being directed towards curbing another bubble. 

Sincerely,

Pashma Manglani

Editor


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Off plan launches curb speculative buying 

The tighter mortgage lending norms since early December made sure that property transaction activity slowed down considerably since the start of the year. But there is another factor in play that is curbing speculative demand for ready or soon to be completed properties.

"Off plan launches in Dubai have quadrupled since the start of the year and that sucked in nearly all of the speculative buying that was earlier there for ready properties," said Sameer Lakhani, managing director of Global Capital Partners (GAP). "But that has also created a vacuum for ready properties because the genuine end-user finds that mortgage funds are still not that easy to come by. Also the spike in property values is making it tougher on these buyers to commit to the initial down payment requirements and the additional expenses."

 

Read more on Gulf News

More firms invest in realty for staff 

Companies are investing in property to provide their employees with accommodation instead of increasing housing allowances, experts say.

Estate agents, experts and company managers said that developing, buying or renting residences would allow them to retain important personnel and cope with the large rent increases seen in the emirate in the past year.

The move also allows companies to gather staff at one location, simplifying transport requirements. Jamal Abdul Lootah, the chief executive of facilities management solutions firm Imdaad, said the company had earmarked AED100 to build a housing complex. The company will receive the first phase, which will be able to accommodate 1,000 employees, in January next year. 


Read more on The National

Property scams increase 

Over just the last year, hundreds of people have lost tens of millions of dollars to bogus property agents.

For scam merchants, there are a lot of advantages: many new expats are unfamiliar with the local property market and do not realise that advertisements for flats and villas are not subject to official vetting. 

Primary responsibility has to lie with the renters themselves to make an effort to understand how the market works. The rising cost of rents has the effect of encouraging quick transactions but the onus has to be on the renter to protect themselves by only using reputable property companies and agents who will clearly be int he industry for the long term. They should also take advantage of the wealth of advice found on the dozens of internet forums geared around people from the same country of origin. 

 

Read more on The National

UAE stocks soar  

Stock markets in the UAE rallied as investors snapped up shares ahead of the country's upgrade to the MSCI Emerging Market index on Sunday.

The Dubai Financial Market (DFM) jumped 5% while the Abu Dhabi Securities Exchange added 5.5%. The stocks included in the index were - Abu Dhabi Commercial Bank, Aldar Properties, Arabtec, DP World, Dubai Financial Market, Dubai Islamic Bank, Emaar Properties, FGB and National Bank of Abu Dhabi.

Meanwhile, strong performance from the banking sector kept the Emirates in the green at the close of trading earlier last week with the DFM up 1.86% at 4,954.62. The property sector remained weak but good performance in banking kept the markets positive. 

 

Read more on The National

New projects launched to revamp Karama
 

wasl Properties, a subsidiary of wasl Asset Management Group, has announced the completion of its latest residential projects - wasl amber and was onyx - both located in the Al Karama district of Dubai.

The sister developments comprise 153 apartments in total, with wasl amber providing 84 flats and wasl onyx 69. 

Both feature a mix of one, two and three-bedroom units, with some offered with a maid's room. Features common to both are a swimming pool, gym, kids' playing area, security, single satellite TV feed, storage rooms, central gas system and central AC.

The two new buildings are the latest developments in a wasl properties' strategy to re-urbanise the traditional, older areas of Dubai.

 

Read more on Arabian Business

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