Weekly Dubai real estate news digest. Issue 68

19.10.2014
Scaling new heights 
Welcome to the sixty-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 68 |  October 19, 2014

Scaling new heights 

While Dubai seems to have witnessed a slowdown when it comes to its real estate market, the emirate is still busy rolling out new projects that continue to make headlines.

Over the past week, it announced a new world record with the Burj Khalifa introducing 'Sky,' a new observation deck that is said to be the highest in the world. This sets a new record above the Canton Tower in Guangzhou, whose observation deck stands at 488 metres. 

Meanwhile, as it gears up for the Expo 2020, Dubai is also set to introduce trams, emulating cosmopolitan cities such as New York, Toronto, London and Hong Kong. "Infrastructure enhancement and the growth in the public transport network will definitely have an impact on the real estate sector," says Simon Gray, managing director, Chestertons MENA. "The proximity to high-capacity transit halts has proven to increase property rates, a phenomenon known as the 'transit premium.' The tramway is definitely going to add significant value as it is potentially poised to change the dynamics of the property prices by making it more attractive."

As for upcoming developments, the emirate continues to focus its efforts on ensuring that it doesn't repeat its mistakes from the earlier market crash. The Dubai Properties Group (DPG), the real estate development arm of Dubai Holding, has assured that it has funds in place for all its upcoming projects. "Despite sales or not, we will go ahead with these projects," said Mohammad Al Habbai, chief officer for urban planning and infrastructure.

Market Insight is aimed at examining the emirate's dynamic market and forecasting industry trends. Over the past few months, it has become quite apparent that Dubai has turned all its attention on developing infrastructure to enhance the city ahead of the Expo 2020. At the same time, it is also becoming increasingly clear that the rampant increases from earlier this year have slowed down considerably this quarter with the market continuing to witness greater stability. It has to be noted that the regulatory environment is much stricter for both developers and buyers as Dubai continues to evolve, emulating cosmopolitan cities elsewhere in the world.


Sincerely,

Pashma Manglani

Editor


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Tram set to change market 

Dubai soon plans to join the league of cosmopolitan cities such as New York, Toronto, London and Hong Kong by introducing trams. According to property agency Chestertons, this could mean big things for the real estate sector. 

"Infrastructure enhancement and the growth in the public transport network will definitely have an impact on the real estate sector," says . The proximity to high-capacity transit halts has proven to increase property rates, a phenomenon known as the 'transit premium'.

The tramway will provide a huge relief and will be an alternate mode of transport for visitors to the Jumeirah Beach Residence and Marina area who usually rely on taxis for commuting purposes; usually making traffic snarls a common daily routine in the area.

 

Read more on Zawya

Highest hikes in International City

Dubai property prices have witnessed a “slight” correction in the past three months (June to August 2014), but prices still remain in the positive territory on an annual basis, reveals the September Mashreq Property Wealth Gauge report.

Emirates 24/7 reported that the highest increase on an annual basis was recorded in International City, where prices rose by 28.8%. Business Bay was next with a 26.2% increase, followed by Dubai International Financial Centre 20.1%, Dubai Marina 15.9% and Jumeirah Lakes Towers (JLT) 15.8 %. The report disclosed that the percentage change in property prices over the last three months (June to August) indicated a declining trend across major locations.

The highest decline in the three month period was in Jumeirah Park. The master development saw prices falling by 3.5%. Greens saw a decline of 3.1%, Springs/Meadows fell 3.4 %, Arabian Ranches dropped 3.3% and Jumeirah Village slipped 2.6%, Dubai Marina declined 0.2 % and JLT fell 0.9 %. Jumeirah Beach Residence reported the highest gain in the June-August period, which saw prices rising by 3.2 %. 

 

Read more on Emirates 24/7

'Funds in place for all projects'

Dubai Properties Group (DPG), the real estate development arm of Dubai Holding, has funds in place to complete all its projects, a senior company executive told Emirates24|7.

“For the time being, we have funds for every single project,” said Mohammad Al Habbai, chief officer for urban planning and infrastructure, DPG. “Despite sales or not, we will go ahead with these projects,” he added.

The DPG senior executive revealed that construction was all set to commence on Dubai Wharf project by year-end and was slated for completion in the two year’s time.

 

Read more on Emirates 24/7

Crowdfunding makes it way into real estate

A popular option for businesses, crowdfunding is now being considered as a possible option in real estate.

Guernsey-registered Mayfair & Morgan Ltd (M&M) confirmed that initial talks have been held with a Dubai-based developer to explore the possibility of an online fund sourcing platform.

“The developer has a funding requirement of $6 million [Dh22 million] for one of his projects, and together we are reviewing whether crowdsourcing is a viable option to pull in that level of investments,” said Paul Skillen, CEO of M&M, which has offices in Dubai and London. “In the US and UK, crowdfunding related to real estate have been growing exponentially and at some point will make its mark in the UAE.”

Local and regional markets have been witness to heightened crowdfunding activity, whereby businesses eschew traditional resources such as banks or private equity to pitch their credentials to a wider audience. All of the transactions are done over the web, and the “investor” gets to acquire a stake in the venture at a relatively smaller price. 


Read more on Gulf News

New observation deck at Burj Khalifa

The Guinness Book of World Records has confirmed that Dubai’s Burj Khalifa now holds the record of the highest observation deck in the world.

Ahmad Al Falasi, executive director – Property Management of Emaar Properties, said: "With the introduction of ‘Sky’, we are scaling up the entire journey to Burj Khalifa by offering a truly premium experience that will be a lifetime’s memory for every visitor. We are doubly delighted to clinch the Guinness World Records title that adds to the glory of Burj Khalifa and enhances the reputation of Dubai.”

The UAE has set over 130 Guinness World Records, he revealed.


Read more on Emirates 24/7

Property app collates smart services

An influx of foreign capital is expected to lift volumes on the UAE’s stock markets to pre-financial crisis levels and help brokerages earn record revenues.

“Frankly, 2014 is the best year for brokerage companies since 2008 in terms of revenues,” says Mohammed Ali Yasin, the managing director at NBAD’s brokerage arm. “If traded volume continues it will be the highest on record, and that’s why we see brokerages either opening or expanding their business.”

“Markets should pick up in the coming quarter,” said Nabil Farhat, a partner at Al Fajer Securities, which trades stocks on the Abu Dhabi Securities Exchange and Dubai Financial Market. “There’s also a new addition, Emaar Malls Group, which will be the latest product to trade. It’s positive for our industry.”

 

Read more on Zawya

Regulator launches list of service charges

Dubai's property regulator, the Real Estate Regulatory Agency (RERA) has compiled a list of annual service charges on hundreds of freehold properties across the emirate.
 
RERA said that the charges provided in the index accessed through the Dubai Land Department website, was based on information verified by real estate developers and owners’ associations and audited by the agency's staff.

The regulatory body, which has been planning to introduce the service charge index since 2012, said that the new index included 300 individual buildings located in 22 major developments including Dubai Marina, Jumeirah Beach Residence, Jumeirah Lakes Towers, International City, Motor City and Silicon Oasis.

The index reveals big differences in the service charges applied on developments throughout the emirate – from AED8.12 per sq ft at Royal Residences at International City to AED20.88 per sq ft for Grandeur Residences on Palm Jumeirah.

 

Read more on The National

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