Thursday, September 30, 2010

More than 300 real estate projects in Dubai to be completed soon

About 307 real estate projects out of the 980 registered projects in Dubai, are likely to be completed shortly, states the prospectus of bond by the Dubai Government.

The government, by quoting RERA in the prospectus, said that out of the total number of registered projects, 46 have been completed, while another 307 are likely to be completed in due course.

The number of registered projects that are either cancelled or are in the process of cancellation, totals to 495 in number.

According to RERA, there are a total of 500 registered developers in Dubai, with more than 630 being registered brokers.

The major developers in Dubai are all owned by the Dubai Government, and/or the Ruling Family of Dubai. These include Emaar Properties, Nakheel, Dubai Properties, Union Properties and Deyaar Development.

But, the Dubai Land Department has reported 1,188 sale transactions, in comparison to 510 sale transactions during the second half of 2009, an increase of nearly 132 percent.

The Land Department reported a slight decrease in the number of mortgage-related transactions, with 1697 such transactions taking place during the first half of 2010, in comparison to 1861 such transactions during second half of 2009.

Wednesday, September 29, 2010

Dubai Court announces new law for incomplete off-plan properties

The Dubai Court of Cessation has established legal principles for real estate sector, wherein, in-complete off-plan properties will not be registered directly in the name of buyers in the final real estate records.

They can be registered in the Initial Land Registry of the Land Department, as per the provisions of Act 13 of 2008.

On completion of off-plan units that are sold in advance, the developer may apply to the Land Department to register those units in the names of buyers who have met their contractual obligations. But, this can happened only after the developer is in receipt of completion certificate from competent authorities.

In the meanwhile, the Land Department is granted the right to register units in the names of buyers, in case they submit a request, or by the developer, on behalf of the buyers when they have fulfilled their commitments.

The court confirmed that the developer is obliged to apply to the Land Department for registration of sold units in the final Land Register, within 60 days from the date of the law. But, this needs to be done only if the units are 100 percent constructed. Else, it will be registered in the Initial Register as incomplete units.

The Court of Cassation clarified that the developer's role will be confined to submission of the application to the Land Department. The department will be the only body that can take action according to its powers.

Friday, September 24, 2010

Dubai property prices, rents to ease further in short-term

The rents and property prices are likely to soften further shortly, revealed the Dubai Chamber of Commerce and Industry, in their report recently.

The Economic Researcher at the Dubai Chamber, Ehsan Khoman, said that the demand-supply dynamics are favoring over-supply, given the significant volume of construction projects over the past years.

The study also revealed that the real estate market in Dubai has focused more on high and ultra-high end segment of the market. With low confidence levels and subdued demand, the prices and rents could dip further, he said.

But, the sector will recover in the medium to long term. In the medium term, rental yields and property prices are likely to get stabilized, with growing confidence levels and recovery signs, Khoman continued.

With the lending conditions likely to ease on lower interbank rates, and with the overall investor sentiment being restored, the prices and rental returns are predicted to return to pre-crisis levels, he said.

Further, the government intervention has given the much-needed strength to the market. The study pointed out actions taken by Dubai Land Department and Real Estate Regulatory Agency (RERA).

Issuing visas linked to property ownership are also vital, as property investors and homeowners are now permitted multi entry visas into Dubai for minimum of six months.

The study emphasizes that few regulations are necessary here, particularly, when the developer is permitted to retain 30 percent of contract value, in case a buyer cancels an off-plan purchase. Therefore, off-plan buyers, seeking to cancel a project, will have to forfeit 30percent of the total value of the unit, he pointed out.

According to Khomam, further measures in this regard can boost investor confidence and revive overall market demand. In order to enhance the level of transparency, professionalism and overall market confidence, few policy recommendations need to be made. Such regulations can improve transparency levels, professionalism, and overall confidence in the market.

The study actually revealed that the latest performance in the property sector, coupled with dropping prices of properties, have brought relief to residents and businesses alike. For those with insufficient capital, this is the right time to make return on investment.

Thursday, September 23, 2010

Nakheel re-starts all its short-term projects

Nakheel has announced that it is in the process of re-starting all its short-term projects, as per the re-structuring plan to be finalized by year-end.

The CEO of Nakheel, Chris O'Donnell, has instructed that all deals with contractors should be ready by end of next month, so as to begin construction of all eight short-term projects.

Nakheel has already held talks with the banks, and consolidations, and re-structuring will be almost completed by end of the year, he said.

Located off the Emirates Roads in Dubai, Al Furjan said that it is the first project in which Nakheel has signed deal with its contractor, to work on 300 villas, the work on which began two years back

The Managing Partner at Al Shafar Transport and Contracting, Tarent Zoabi, confirmed that work was underway on 63 villas, to be handed over in the first quarter of 2011. The remaining 237, is also 60 percent complete, and will be delivered by fourth quarter of next year.

Although, there was a short delay owing to economic conditions, the company got paid for first phase, inline with the re-structuring plan, and therefore hope that the rest of the payment will be released by the year-end, said Zoaibi.

Meanwhile, Arabtec is likely to commence work on the rest 500 villas in this phase of Al Furjan, and is considered to be one of the short-term projects by Nakheel, which is still pending. The developer hopes to reach a deal with Arabtec by the end of next-month.

Arabtec and other contractors will resume the work on this and other sites. This phase of Al Furjan has already been sold out. The Phase Tw0 is a long-term project, said Mohammad Rashed Bin Dhabeah, the Managing Director, Nakheel Construction.

We are also working on creating a park adjacent to Golden Mile on Pam Jumeirah, said Chris O-Donnell.

Nakheel is yet to reveal how many of its long-term projects will finally go ahead. The first focus is to finish the re-structuring and the eight projects in next two years, said O-Donnell said.

Short-term projects are phases or certain components of master developments, where construction has progressed considerably. These include initial phases of Jumeirah Park, Al Furjan, Veneto and Badrah, Madinat Al Arab, Jumeirah Heights, Jumeirah Village South, Jumeirah Island and finishing bits and pieces on Palm Jumeirah.

Friday, September 17, 2010

Dubai's property sector shows strong signs of re-bound

Dubai's real estate sector has shown indications that it is likely to bounce back.

The September figures indicate that there are less vacant properties in Dubai now, following a sudden late summer rush, reports the latest edition of ArabianMoney, the Gulf's independently-written investment newsletter.

According to the current data analysisi by PropertyFinder.ae website, the residential property vacancy rate has dropped from 11 percent to 8 percent following summer, a decrease of 25 percent in the residential vacancy rate.

According to the Editor and Publisher at ArabianMoney, Peter Cooper, this is a major shift and a significant change in the local realty sector.

In June, it was found that there were 20,130 properties for sale, and 11,797 for rent in Dubai, making a total of 32,000 (nearly 11 percent of estimated 300,000 unit housing stock).

But on 7th September, ArabianMoney present only 14,984 units for sale and 9,634 for rental.

This could be an indication that people are actually coming back after summer, and lower rent has brought back the commuters from Sharjah to Dubai, and has also served as encouragement for those paying higher rents in Abu Dhabi to turn to Dubai and commute from here, he said.

He also said that new property supplies have been slow in entering the market. This could be due to the sudden construction halt witnessed two years ago, he said.

Thursday, September 16, 2010

Completed buildings in Dubai attract more value in Q2 2010

The value of completed buildings in Dubai witnessed a major spike in prices by more than 45 percent during the second quarter of 2010, in comparison to that of first quarter this year, based on the statistics published by the Dubai Statistics Center of Dubai Municipality.

This indicates an all-time quarterly high for the value of completed buildings, as per the Dubai Municipality data, which has been maintaining records dating back to the year 2005.

The increase in value of completed buildings is largely due to the 80 percent jump in value of multi-storey buildings completed in Q2 this year. However, the number of multi-storey buildings that have been completed grew only marginally, touching 87 buildings from 82 buildings during first quarter of the year.

The rise in building values is noteworthy particularly bearing in mind the fact that there has been a 17percent drop in the number of completed buildings (from 1358 in Q1 2010 to 1128 in Q2 2010).

The value of completed buildings in Dubai had hit a low during fourth quarter last year, with 614 buildings worth Dh.4.3bn completed. But, thereafter, the value of completed buildings has recorded a good improvement, jumping by more than 76 in Q1 and by more than 45 percent in Q2 of this year.

The latest announcement by Dubai World that it has reached a deal with 99 percent of its creditors regarding $24.9bn worth debt re-structuring is likely to further boost the real estate sector in the emirate, which witnessed a decline in value by 50 percent on delivered properties during the past couple of years, owing to global economic recession.

According to experts, the government supporting this major sector and real estate companies are set to make a major comeback earlier than expected.

The value of buildings, public facilities, particularly those funded by government bodies, including the municipality, grew by more than 67 percent from Dh.1.74bn in Q1 2010 to Dh.2.9bn in Q2 2010, as per data.

Monday, September 13, 2010

Sweet Homes to deliver 1st phase of Ajman Uptown villas by August 2011

The leading UAE-based real estate developer and multi-service provider to the property sector, Sweet Homes Holdings, has announced plans to deliver the first phase of its residential villa projects, worth Dh.2.2bn in Ajman Uptown community development by August 2011.

The master developer also revealed that about 555 of these units will be handed over to customers who have been prompt in their payments, as per the construction-linked payment plan for the project.

According to Sweet Homes, majority of the investors who have signed up for the said payment scheme, have acquired villas from phase one, and is therefore driving the completion of the initial phase of the project.

Currently, two major sub-contracts for the 1504 villas have been awarded to Sweet Homes General Contracting (SHGC), the in-house arm of Sweet Homes Group, and the main contractor for Ajman Uptown project.

SHGC reported that the sub-structure of all villas have been completed and superstructure works are under process across the double, triple and four bedroom townhouses and well-designed five-bedroom VIP villas in the project.

The CEO of Sweet Homes, Fahad Sattar Dero, said that the imminent delivery of the first phase of the villas is the realization of a vision. Several of the company’s investors from phase two and three are also showing interest in moving to available villas in the first phase, that are similar to units that they had earlier invested in.

The Dubai Islamic Bank is the appointed custodian institution of the project, which is conducting regular inspections, and has given satisfactory remarks on the project’s progress. This includes villas in the first phase of the project, with nine designs - VIP, Acacia, Camellia, Erica, Begonya, Erica-1, Erica-1, Erica-2 Vertical, Erica-2 Horizontal and Dahlia.

The project is also closely monitored by Ajman Real Estate Regulatory Agency (ARRA), while even third party construction firms and quantity surveying firms, have reverted with positive feedback after assessment of construction progress.

Thursday, September 09, 2010

Dubai, now among affordable cities in the world

Dubai is now ranked as being a more affordable city in the world for expatriates, given, the decline in property rents and thereby a major decline in cost of living in the emirate, as per the latest global research report.

According to a EuroCost International Study, Dubai has fallen down in its rankings to 31 from 12 last year, owing to sharp decline in rental rates.

Currently, Beirut is the most expensive city in the Middle East, just followed by Abu Dhabi, which has also seen a drop in rentals last year. However, the price decrease was remarkable in Dubai, with decreases of up to 50 percent, based on the type of housing, the EuroCost study report said.

The report said that the housing crisis has affected several locations across the globe in many ways. Majority of the countries have recorded a drop in rentals last year, a factor that was less eminent until the last few years.

Certain markets, however, have been better resistant to the crisis, and in few countries, expatriate rentals have remained stable or have even increased. The other reason with the fluctuation in exchange rates last year, the rent price evolution would have been different in euros and in local currency.

This may be the reason for cities such as Dubai, Shanghai and Beijing to fall out of the top 20. Dubai, in particular, has seen considerable decrease in expatriate rents last year, the report pointed out.

Meanwhile, cities such as Sydney, Beirut and Rio have grown in their ranking and are now among the 20 most expensive places in the world.

EuroCost International specializes in cost of living services for expatriates in more than 250 locations worldwide. Although the expatriate housing conditions vary depending on the country, the EuroCost publishes a yearly worldwide ranking, depending on specific type of housing.

For the latest survey report, EuroCost has taken into account double and triple bedroom flats (Average prices converted in euros, with December 2009 reference rates), and has reported several marked changes in the findings of 2010 worldwide ranking of expatriate rent.

Tuesday, September 07, 2010

New real estate regulation announced in Sharjah

According to a new real estate regulation issued in Sharjah today, the landlords in Sharjah can now turn their residential buildings into commercial or professional facilities.

The Sharjah Executive Council passed the resolution in a meeting, chaired by H.H. Sheikh Sultan bin Mohammed bin Sultan Al-Qasimi, the Crown Prince and Deputy Ruler of Sharjah.

As per the new real estate measures, a committee will be established to examine applications for commercial and professional use of buildings, in view of technical criteria.

This initiative aims to regulate the use of buildings at the permissible leaseable residential districts.

Sunday, September 05, 2010

New properties in Dubai found lacking in quality of finish

The quality of finishing in newly completed properties in Dubai has dropped considerably. This could be due to cost-cutting measures adopted by the developers, including hiring cheaper contractors, said a Dubai-based firm.

The Managing Director of Land Sterling, a property valuations firm based in Dubai, Youcef Betraoui, said that ever-since the downturn, there has been a fall in standards owing to cost cutting and the hurrying up of work to complete deadlines. The developers have also been found hiring cheaper contractors for cost-cutting purposes.

Betraoui, whose company is regulated by Royal Institution of Chartered Surveyors in the UK and the RERA in Dubai, said that on an average the company receives about 20 to 30 issues with each villas, although, it varies from one project to another.

When things began getting worse for developers, this number grew to 50. When owners spotted this, they demanded that a professional inspect the property before handover. The company has seen atleast 20 percent increase in demand for snagging services during first half of this year, he added.

According to Betraoui, the decline in quality is not just for medium quality developments. It is also for multi-million dirham penthouses in the Palm Jumeirah.

Although the palm-shaped Nakheel development usually are among the best quality finishes in Dubai, there are Dh.15mn worth penthouses that have water leakage, spotlights that did not work, and doors and windows that had problems.

Land Sterling is involved in inspecting the quality of building work prior to hand-over of properties by the developer to the owner (known as snagging).

After inspection, the snag report will be sent to the developer, and a copy of it will be sent to the owner. After completion of the said works (which takes a week to a month), the company does a follow up inspection. If the work is found of sufficient quality, the final payment is made and the keys are exchanged. The work also involves a one year warranty from the developer.

Thursday, September 02, 2010

Dubai Marina tops list of favourites among tenants, investors alike

Dubai Marina continues to top the list of most sought-after developments in Dubai for tenants and investors alike said a survey by leading real estate portal.

The survey conducted among 400,000 visitors to the website, including 100,000 properties and 200 brokers said that 17.5 percent of online search among people preferred Dubai Marina, while 16.1 percent chose Jumeirah Lake Towers (JLT), 13.1 percent Palm Jumeirah, 7.3 percent Jumeirah Beach Residence (JBR), and 6.8 percent chose Arabian Ranches.

Even in the rental sector, Dubai Marina topped the list with 16.7 percent choosing it as favourite development, following by JLT at 9.9percent votes, Palm Jumeirah 6.7 percent, Mirdif 5.9 percent and Jumeirah 5.9 percent.

Meanwhile, the once popular rental destinations, Discovery Gardens and International City, showed a downward trend, with only 4.2 percent and 3.4 percent showing interest in them.

The popularity of Dubai Marina has increased considerably, with growing demand from Abu Dhabi commuters as the real estate sector in the capital has suffered a set back due to shortage of units, resulting in high rentals, said Jesse Down, Director of Research and Advisory, Landmark Advisory.

The waterfront location with accessibility to major retail clusters makes Dubai Marina a popular residential area. Moreover, the Marina is a well-established community with a positive feedback loop, drawing more demand, Downs said. But, despite being so, the rents in Dubai Marina registered a 20 percent decline, as per the Rental Index by RERA.

The rent declines are driven by sharp growth in supply and weakening demand fundamentals. The supply in Marina, including JBR, has grown by nearly 20 percent this year. There is a three-year pipeline for the area, which could keep rents from re-bounding any time soon, Downs points out.

Meanwhile, with several projects nearing completion and close to handover in Abu Dhabi, it is likely that several people working in Abu Dhabi and living in Dubai will consider moving into the capital. Given, the increasing supplies and dropping rentals in Abu Dhabi, commuters are likely to be attracted back to the capital, and this trend may gain momentum in 2011 and 2012, which could have a major impact on Dubai Marina and JLT, Downs said.