Weekly Dubai real estate news digest. Issue 5

04.08.2013
    An investor's market  
Welcome to the fifth 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 5  |  August 4, 2013

An investor's market 

It’s been a happening week for investors in the UAE with big announcements that demonstrate the market’s commitment to protecting their interests.

His Highness Sheikh Mohammed Bin Rashid Al Maktoum issued a decree that set up a committee to liquidate real estate projects that were cancelled from the time of the recession. The announcement, which means investors will get a refund through the liquidation of developers’ assets, has been well-received by property analysts (who predict that this will encourage further investment) as well as by investors. As an additional measure, the Dubai Land Department is currently studying 158 real estate projects that had been put on hold and is considering restarting these.

The signs that confidence in the UAE market is high are all there. In the first six months of 2013, there has reportedly been a total of Dhs53 billion worth of investment in the real estate sector. Indian investors topped the list for foreign investment with 499 involved in transactions worth over Dhs8 billion, followed by Pakistani and British investors.

While there has been much news on the rising prices in developing areas, there is finally something on Dubai’s prime property market, where prices have gone up by more than a tenth in the first half of the year. This makes Dubai's prime property one of the fastest-growing markets in the entire world (coming only second to Jakarta). Demand is prevalent in the region and many investors are cash buyers, according to researchers.

Rental prices are on the rise too, going up 30% in the past year, especially in areas like Dubai Sports City, Dubai Silicon Oasis and near Trade Centre.  Analysts predict that residential rent hikes will continue into the second half of this year, rising for at least another 10%. Dubai’s bid for the World Expo 2020 has been one of the factors that has contributed to this growth and will continue to spur investment until one of the nominated cities has been picked to host the expo. 

Market Insight is aimed at examining the emirate's dynamic market and forecasting industry trends. For this week, it's clear that there have been measures taken to pave the way for Dubai becoming an investor's market and that there are real signs of recovery based on investor spending. Be sure to catch our next issue to find out more about the latest real estate developments that hit the city.

Sincerely,


Pashma Manglani

Editor


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Cash back for buyers


A new judicial committee has been set up to liquidate cancelled real estate projects in Dubai, providing settlements and resolving grievances, operational procedures and other related issues.

All decisions and rulings will be carried out through Dubai Courts and rulings will be final and cannot be appealed. According to Sultan Bin Butti Bin Mejrin, director general of the Dubai Land Department, all cancelled projects will be liquidated by 2015. The aim is to refund money to investors by selling developers’ assets. 

The committee was set up with a decree issued by His Highness Sheikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai.


Read more on Gulf News


Over 30% rent hike in past year


In the last 12 months, rents have gone up 36% in Dubai Sports City, 31% in Silicon Oasis, and 33% in the Trade Centre roundabout area, according to a recent report by global property consulting firm CBRE.

Rental rates for the first half of this year have increased by almost 14%, as per the report. Major developments in secondary locations, such as Dubai Silicon Oasis, Dubailand, Jumeirah Village and Dubai Sports City have attracted high demand in the second quarter due to their lower costs, which has increased rents.

Also, villa rental rates have gone up for six consecutive quarters and witnessed a six per cent increase in the second quarter of this year. Residential rent hikes are expected to continue by another 10% in the rest of 2013.

 

Read more on Gulf News


Investors spend Dhs14.4b in H1

The Government of Dubai's Land Department reported that there has been a total of Dhs53bn($14.4bn) worth of real estate investments in the first half of 2013.

Arab investors contributed to approximately Dhs5 billion on investments in Dubai property in H1 - a 111% increase in spending while Gulf nationals spent over Dhs16 billion, a 57% rise. The figures showed that foreign investors remained the biggest spenders with over Dhs32 billion - a 73% increase on the same period last year

 

 

Read more on Arabian Business


Luxury properties witness soaring prices


Luxury house prices in Dubai increased by more than a tenth in the first half of the year, maing them the fastest-rising properties in the world over that period, according to a new report.

International property broker Knight Frank has reported that house prices in Dubai has risen by nearly 12% in the six months till June. The report also revealed that in the past year, Dubai's house prime house prices rocketed by 21.6%, coming second only to the fast-growing Indonesian capital Jakarta, where prime property prices rose 27.7% in the same period. 


Read more on The National


DLD mulls restarting 158 projects


The Dubai Land Department (DLD) is studying 158 projects that could be revived through its real estate initiatives.

"We have 45 projects under Tanmia and another 45 under the Tasyeer scheme and we are currently studying another 158 projects," said Majida Ali Rashid, chairwoman of the Real Estate Investment and Protection Centre, DLD.

Tasyeer is a guaranteed funding initative, which initially covered 40 projects in the areas of Business Bay, Dubai Marina and Jumeirah Lakes Towers. Tanmia was set up with the aim of getting semi-government/private investors on board to get projects completed; it enables property investors to register their stalled projects with the DLD. 


Read more on Emirates 24/7


Bullish landlords fuel rental disputes
 

The number of rental disputes has risen in Dubai in the past one year, according to CBRE.

In its latest Dubai MarketView, Mat Green, head of Research & Consultancy UAE, CBRE Middle East said, “Over the past 12 months, landlords have become increasingly bullish, leading to an increasing number of rental disputes being raised at the Rent Committee.”

Disputes have been on the rise since landlords have been increasing rents randomly, even issuing 30-day notices to tenants to vacate apartments.

 

Read more on Emirates 24/7


Simsari.ae to curb fake listings
 

Dubai’s Real Estate Regulatory Agency (Rera) has ordered approved property brokerage firms to register all their available properties on Simsari.ae – an authenticated and trusted multiple listing service – by August-end, or face penalties.

Real estate experts believe the move will reduce the number of “ghost” listings common in the UAE, and, more possibly, the agency will be able to limit the listing of one property with not more than three agencies. As per Rera regulations, a seller can list his property with only three brokerage firms.


Read more on Emirates 24/7


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