Thursday, August 26, 2010

Developers strive to keep up the Owners Associations deadline

While the developers have begun using the strata consultants to keep up the October deadline for registration of owners association, it is said that an extension to the deadline is likely.

The CEO of Strata Global, Kent A O'Brien, said that the October deadline to complete all documentation process and to register owners' associations with RERA (Real Estate Regularoty Agency), will be extended further.

The Head of Strata Management at Cluttons, Graham Yeats, also responded similarly.

"The pressure to meet the deadline will be there. Even RERA will have to do a lot of processing within a short span, but it will be worthwhile in the end," he said.

The developers in Dubai, who have been proactive till date, are continuing that way. But, few others are hoping that they will not have to spend money on compliance, O'Brien said.

Yeates said that several developers are using consultants to handle the registration. The main document is the JOP declaration, which outlines the details of the project, including the method of calculating the cost sharing.

RERA will ensure that this is calculated in an equitable manner and consultants can assist with this formula. Although it is a tight deadline, the proactive developers are working towards reaching this goal, he concluded.

Wednesday, August 25, 2010

Dubai realty sector to be the first to recover from downturn impact

Dubai's real estate sector will top all the other sectors that are likely to recover from the downturn, which had left a major impact on most economic sectors in the Gulf region, said the Nakheel Chairman.

According to Ali Rashid Lootah, the property sector in the emirate is in a state of stability when it comes to rents and property prices, and this makes it more attractive for investors and dealers.

The developments happening in the Dubai realty sector over the past two years also have a major role in re-structuring the sector, he said.

The property market in Dubai has strong pillars of support that actually helps the sector to remain on the top of all other sectors, and this will help in kick-starting the gradual recovery process. Other major factors that are conducive to property market are the advanced infrastructure and investment environment in the emirate. The current stage is, only a transitional phase which will open doors for a new period in this market, he explained.

Lootah expects a strong "wave" of demand for properties in Dubai, very soon. His expectations are based on the growth of population in Dubai over the past couple of months, which is reflected by the surge in domestic power and water consumption, in comparison to the same period last year.

Saturday, August 21, 2010

Few developers announce three-year residence visas for property purchase in RAK

Certain developers in Ras Al Khaimah (RAK) are offering three-year residence visas for purchase of property within the emirate, despite the fact that federal law permits only six month visa, it has been reported.

For instance, the Al Hamra Village in RAK is said to have been openly campaigning that it can offer visa and financing to Royal Breeze Direct Sea View Apartments.

An expatriate residing at Al Hamra Village said that an expatriate can have 100 percent ownership of a property in Al Hamra Village, while also enjoying several other benefits, including residence visa renewable every three years, and interest-free financing of up to 40 percent of property value.

The expatriate, who is also a sales agent, said that the visa will be provided by Rakia, and will be guaranteed on purchase of a property. The title deed will be given after submitting full payment. A trade license will be will be given before obtaining the residence visa. For this, a one-time payment of Dh.5000 will have to be submitted. The visa given is renewable every three years for Dh.2000.

Although, the RAK laws are entirely different, the visa is guaranteed, the agent said.
For availing the interest-free finance scheme, a deposit of 60 percent will have to be made over a two-year period, he said.

The sales campaign reflects the newsletter content by an RAK-based legal firm, which said that establishment of a special purpose vehicle in the Rakia free zone will permit the director and shareholder to obtain a three-year visa and permit them to sponsor dependents.

However, as per the UAE federal law foreign owners of the UAE property, are entitled to a six-month multiple entry visa, effective 1st June this year. The law mandates that applicants own a property worth minimum Dh.1million and earn a monthly salary of Dh.10,000 for the visa. The visa will have to be renewable every six months at a cost of Dh.2000.

Thursday, August 19, 2010

Nakheel to begin work on six mega projects in Dubai

Nakheel, the leading Dubai-based property developer will begin work on a minimum six mega projects in Dubai early next month, it has been announced.

The projects on which Nakheel aims to resume work are Jumeirah Village, Jumeirah Park, Al Furjan, Jumeirah Islands Mansions, Al Badrah and Jumeirah Heights Clusters.

Nakheel is currently engaging contractors in certain short-term projects, aiming to continue work in the coming weeks. All short-term projects will kick-start by early October 2010, it has been reported.

The developer, the Palm Islands, has issued payments to contractors, and this has helped in resuming stalled projects in the emirate.

The Nakheel Chairman Ali Rashid Ahmed Lootah said that the company was dealing with 1000 trade creditors. The companies, including Halcrow and Arabtec Construction, and Halcrow, the UK engineering company is involved in the Palm Jumeirah and they have confirmed to have received payments from Nakheel.

The Chief Financial Officer of Arabtec, Ziad Makhzoumi, stopped work on Al Furjan in January, and said the project would re-start soon.

Victory Heights hands over 600th villa in Dubai Sports City

Victory Heights, the Dubai-based developer, has handed over keys to the 600th villa of its 961-unit golfing residential community in Dubai Sports City.

A statement by Victory Heights confirms that 75 percent of the 794 phase-one units of the community have been completed.

The Dh.2.5bn golfing residential development, a joint venture between Arcapita, the Bahraini investment bank and the Dubai Sports City, have been completed towards end of 2010, the statement said.

The General Manager at Victory Heights, Yasser Abulrahman Al Raee, said that with about two-thirds of luxury villas now in the hands of homeowners, the first phase of Victory Heights is now nearing completion.

The development is now buzzing with activity and is more like an established community, given its spacious homes and beautifully landscaped gardens, he said.

The Victory Heights villas are built in three different styles - authentic Spanich Andalusian, Mediterranean and classic European styles, with several offering wonderful views of the golf course fairways and lakes.

Tuesday, August 17, 2010

International City units see less demand

Despite the drop in prices, at least majority of people are not too keen on investing in international city units, says a survey report by Emirates 24/7.

Atleast 91 percent of those surveyed have shown an aversion to investing these units largely due to infrastructure issues, apart from investor apathy.

The prices are likely to go down further, as nobody would invest until there are proper entry and exit gateways. Further, there is the parking issue and foul smell, said one of the respondent.

Another respondent agreed that International City needs to address the infrastructure issues to support the project. The prices will keep falling until this is met.

The poll findings revealed that at least 24 percent of the respondents believe that the drop in prices are yet to hit the bottom, and is bound to go down further.

Only 8 percent of the respondents agreed and expressed their willingness to invest in International City, while 2 percent of respondents said they may probably buy as the current prices are lower than the launch price, and that rentals could cover the investment. Another 4 percent agreed that International City offers good investment at low risk.

Friday, August 13, 2010

Marina Square units likely to be the costliest in Abu Dhabi rental market

Abu Dhabi's Marina Square apartments on Reem Island, ready for handover, are likely to be the costliest in the rental market of the Capital.

At present, the maximum rental for a double bedroom apartment at the Corniche is about Dh.210,000 to Dh.230,000 a year.

The rents will be about 10percent more than those for similar apartments on the Corniche or Abu Dhabi Island, said Andrew Laver, Manager for Valuation and Advisory at Chesterton International.

This could be due to the location, parking, views, and lack of congestion. Several owners and potential tenants have been waiting for the handover of the units. The entire project renders a new lifestyle with excellent views, an underground parking system, away from the hustle-bustle of the city center, he said.

More than 3000 units across the thirteen high-rises will be ready to be occupied post-Ramadan. Several of these will enter the leasing market during the next few months. The owners are likely to demand a premium, and do not mind keeping their properties vacant until they earn the desired rent.

Certain other factors such as limited availability of units for rents on the Corniche, also contributes to high rental prospects for Marina Square. Moreover, any building that is completed is often fully rented out in two months.

The Chesterton's projections indicate that rentals for apartments on the Corniche may remain comparatively stable during the coming months with the delivery of Marina Square units. But, properties along Al Falah and Hazaa Bin Zayed may see considerable decline in rents.

However, Charlie Walsh, Head of transactional services at Asteco Property Management, is not ready to compare Marina Square with Corniche. Comparison of rentals between Marina Square and Corniche is difficult, as the grade and quality of accommodation on the Corniche varies depending on the age of the building. Moreover, the units in Marina Square are yet to be handed over, and therefore, rentals are yet to be proven.

Further, the Corniche is considered a prime locality to life, with older buildings offering larger-sized units, although without much amenities. On the other hand, the Marina Square is a modern development with amenities such as swimming pools, gymnasiums, ample parking and more, although it still needs to establish itself as a community, Walsh concluded.

On the whole, as the experts are yet to arrive on a common ground about rentals, it is for market forces to decide them.

Tuesday, August 10, 2010

Developers offer attractive perks to lure investors

The developers have begun trying several marketing strategies to attract property buyers, such as offering "guaranteed rentals" to multiple unit buyers, and also offering free maintenance for their units.

The Dubai-based Vakson Real Estate, for instance, has offered eight percent guaranteed gross rent for two years to investors purchasing three or more apartments in its 'University View Apartments' at Dubai Silicon Oasis.

The units are all ready to be occupied, with majority already sold out. The units located in a good location are much in demand, a company official agreed.

The investors are given post-dated rent cheques on signing contracts. The developer is also offering financing options to investors.

In RAK, Al Hamra Real Estate is offering free furniture and one-year free maintenance to property buyers, apart from developer finance. For those opting to rent, the units are offered with three months' free rental apart from free electricity for three months.

Several developers were offering numerous such perks to attract buyers. But these offers withered away when the real estate sector was hit by the recession.

However, experts are of the opinion that property buyers are no-longer interested in sales gimmicks of companies, and are cautious in making decision. They are looking into quality, location and reputation of developer, rather than the free gifts offered.

The leading global real estate consultancy, CBRE (CB Richard Ellis) expects about 31,194 new properties to enter the Dubai market this year, and more than 10,000 in Abu Dhabi.

According to Reuters' poll, house prices in Abu Dhabi and Dubai are likely to fall by 10 percent and 13 percent in 2010, with increase in housing units in both markets.

Monday, August 09, 2010

Declining rentals to make Dubai, Abu Dhabi markets more attractive

According to property analysts, an oversupply in the market will actually make the UAE a more competitive place to live and work.

The Manager of Residential sales and leasing, Better Homes, Kosta Giannopoulos, said that growing number of vacant units will make if easier for people from outside the UAE to move in.

Apart from the declining rents, the infrastructure and the systems are improving, and majority of expatriates believe in Team UAE, which could give them a greater sense of belonging, he said.

The Assistant Branch Manager at Better Homes, Jon Yarrow, agrees that the Green Community has a queue of tenants seeking to move in. Although it is difficult to quantify the exact number of vacancies, several developers are delaying handover of units.

The vacancy levels are likely to increase within next six months as more supply enters the market, he added.

Cluttons International recently revealed that Sharjah is not far behind, and there are high levels of residential units being rented out in Sharjah too, particularly in the new projects.

However, there are high vacancy levels looming large in Dubai and Sharjah. This is evident with the growing number of "to-let" boards across Umm Suqueim and Jumeirah, where traditionally villa rental inquiries have been slower.

But, the outlook seems worse for office sector. The latest research by Landmark Advisory indicates those oversupplies will double empty office space to 45.9mn square feet by 2014. The vacancies would grow to 53 percent and 58 percent by 2013 and 2014 respectively.

However, this will bring down quality office rents, thereby making Abu Dhabi and Dubai more attractive for new businesses.

According to Landmark Advisory, the residential sector rents will peak between 25 and 28 percent in 2012. Colliers International sets current vacancy rates at 13 percent.

Thursday, August 05, 2010

Dubai Land Department accredits Emirates Islamic bank to lend under Tavseer

Emirates Islamic Bank (EIB) is the first Bank accredited by the Dubai Land Department to lend under Tavseer, the latest initiative by the Dubai government to guarantee financing of few property developments announced in the month of June.

EIB has been given access to the Dubai-government supported guarantee scheme, which aims to assure returns to participating financial institutions, protected by Dubai's RERA's (Real Estate Regulatory Agency) stress test of approved projects.

The Tavseer initiative by the government has gained acceptance amongst industry experts. According to them, this initiative by the Land Department to increase confidence in the market through an official stamp on certain projects is the first positive step, although even cancelled projects need such attention.

The Head of CB Richard Ellis (CBRE) Middle East, Matthew Green, said it is not good for Dubai’s image to have building sites standing idle. Therefore, Tavseer is a vital step taken by the Land Department to get the developments moving.

Such an initiative will inspire confidence and accelerate the real estate market's continuing maturity. The move will help accelerate 40 chosen projects within Dubai Marina, Business Bay and Jumeirah Lake Towers that are already 60 percent complete, commented Marwan Bin Ghalita, the RERA CEO.

Land Department revealed that discussions are underway with banks and developers to set up a comprehensive legislative and procedural frame work in support of the Tavseer guarantee, but wasn't open to further clarification.

The Director-General of the Land Department, Sultan Bin Butti Bin Mejren, said that other bank applications too were under consideration for Tavseer and more projects would be included within the next three years, with each given a special focus.

However, Green pointed out that although Tavseer is a good start to stalled projects, investors require more clarity directly from the developers about such projects. Equal transparency is required for other projects too.

Tuesday, August 03, 2010

Dubai house prices dip 4percent in Q2 2010

The house prices in Dubai slipped four percent during the second quarter this year, said the latest report by Colliers International, the leading real estate consultancy.

According to the agency report, this is the first quarter-on-quarter contraction that has been reported in the past one year. The additional housing supply and declining rental incomes are likely to further mount pressure on the prices of housing.

Colliers had earlier reported that its index grew by 2 percent during the first quarter, in comparison to the final quarter last year.

Colliers expects about 33,000 new units to enter the market towards end of the year, less than its original estimate of 41,000, due to delays or re-scheduling of the project.

The Regional Director at Colliers, Ian Albert, said that on the whole, Dubai has 340,000 or more residential properties with 87% occupancy rate, and further declines are anticipated. The market cannot absorb the additional supply, unless there is an increase in population, and the release of stock is slowed down.

Albert also said that due to considerable drop in rentals, investors are hesitant about home ownership when it comes to income generation. This, coupled with other factors such as weakening demand, rigid mortgage approval processes, may all lead to surplus units in the market.

Colliers index data shows seven percent growth in overall house prices year-on-year, with total number of property transactions increasing by fifteen percent every quarter.

The apartment prices dropped by five percent while, villa and townhouse prices dropped by three percent and eight percent respectively, in comparison to the last quarter.

The maximum numbers of transactions were recorded by Arabian Ranches during the second quarter, followed by The Springs, Victory Heights, Downtown Dubai, and the Green Community.
However, in terms of pricing, The Palm Jumeirah Villas, Downtown Dubai, The Palm Jumeirah Apartments and The Lakes - Villas, were the top developments.