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Yields stabilise in market

30.05.2015
Yields stabilise in market
Average yields are generally higher here due to the (relative) low home ownership percentage and the transitory nature of Dubai population.

‘Dubai realty offers the higher yields …’ has been the marketing theme developers with off-plan launches of high-end property have been putting out all through the recent launches. How valid is their contention?

“Average yields are generally higher here due to the (relative) low home ownership percentage and the transitory nature of Dubai population,” Robin Teh, country manager at Chestertons Mena, told Gulf News.

“Yields have started getting attractive (ever) since the market cooled and property values have corrected higher than the rents. Lower yields are a sign of overvalued property and signal correction in the market.

“Total yields increase if rental increases are higher than that in property values. However, in the last few years, both rentals are sales prices increased at an equal rate and yields had been falling. Both variables had seen steep rises until 2014.”

Locations such as Dubai Marina and Downtown Dubai have seen yield stabilisation due to the steep increase in property values between 2012 and early 2014. Average yields are now between 3-5%.

Across all property asset classes, net yields in Dubai average 7.1 per cent in the first three months of the year, according to Knight Frank. This is ‘indicative of the pent-up investor demand for well-let real estate in the emirate,’ it reports.

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Call management
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Lease process (Rent out)
Contract of the lessee and agency.

1 hour

Contract of the lessee and agency.

Required documents:

  • copy of the passport
  • copy of the certificate of ownership
Ad placement

1 day

Ad placement:
  • 20 real estate portals;
  • client base of the agency;
  • profile exhibitions, etc.
Signing of the lease agreement

Up to 2 days

Signing of the lease agreement
Expenses of the seller:

None

Additional services:

Property management

Lease process (Rent)
Contract of the lessee and agency.

1 hour

Contract of the lessee and agency.
Real estate search.

Up to 5 days

Real estate search.

Selection of optimal options.

Signing of the lease agreement

Up to 2 days

Signing of the lease agreement
Expenses of the lessee:

-5% agency commission of the annual contract price

Additional services:

None

Purchase process
Contract of the tenant and agency.

1 hour

Contract of the tenant and agency.
Property Selection

~ 2 weeks secondary

~ 3 weeks new building

Property Selection

Selection of optimal options

Registration of the contract of purchase / sale

1 Week

Registration of the contract of purchase / sale
Customer charges:
  • 2% from purchase at transaction
  • 4% - registration of the transaction at registration
Additional services:

Property management

Sales Process
Contract of the lessee and agency.

1 hour

Contract of the lessee and agency.

Required documents:

  • copy of the passport
  • copy of the certificate of ownership
Ad placement

1 day

Ad placement:
  • 20 real estate portals;
  • client base of the agency;
  • profile exhibitions, etc.
Signing of the lease agreement

Up to 2 days

Signing of the lease agreement
Expenses of the seller:

None

Additional services:

None

the management process
Contract of the owner and agency

1 hour

Contract of the owner and agency
Rendering of management services

1 year

Rendering of management services
Reporting

1 day

Reporting
Expenses of the owner:

5% of the annual rental price

Additional services:

None

Investment Process
Contract of the tenant and agency.

1 hour

Contract of the tenant and agency.
Selection of optimal investment options

From 3 days

Selection of optimal investment options
Registration of the contract of purchase / sale

1 Week

Registration of the contract of purchase / sale
Expenses of the investor:
  • 2% when investing in the secondary market
  • 0% when investing in a new building
  • 4% - registration
Additional services:

Property management