Dubai Real Estate News
UAE Property Market Trends and Reviews

Real estate in Dubai continues to bring in prosperity to property sector recording double-digit annual revenues, the report said.

The property boom in Dubai is being driven by factors such as high population growth rates, increasing demand from expatriates, and strong regional liquidity.

According to a report by Lehman Brothers on "Dubai Inc: Credit Overview and Relative Valuation", tourism accounts for 30 percent of Dubai's GDP, with no sign of slow down being seen in near future in the tourism-oriented realty developments and increased airline services.

Dubai is fast emerging as a real estate, financial and tourism hub, as well as an oasis of stability in a troubled region, reveals report. Taking into account the supply-demand imbalance and prices in real estate sector, it looks like the Dubai property sector will remain elevated during the next couple of years, and thereafter, the bulk of properties that are currently under construction will near completion.

The property sector continues to remain attractively priced, offering good return on investments. However, with the ambitious growth strategy of the emirate, there is a risk associated with continued heavy supply that could weigh on technical, the report states.

The government is also eager to double annual passenger movement from 8million to 15million by the year 2015. With the corporate being closely monitored by the sovereign, they operate as commercial entities and are not subjected to interference in their operations, says the report.

As for the potential risks, the report states that although realty sector slowdown has been long expected, it is yet to happen. But, once the new supply hits the market during next couple of years, a slowdown is likely within the sector, and the focus would then be shifted to other developing stories in the region.

The rapid pace of development is placing increased strain on the price and availability of construction materials and supply of labour, all of which could lead to considerable growth barrier.

Labels: Dubai Real Estate, Latest News, Market Trends

For those of you, who are on the look out for an investment opportunity that doesn't succumb to the global fall in property investment transactions, the Gulf property market is still a welcoming one.

According to Robin Williamson, the Managing Director-Middle East operations of DTZ, expert real estate firm, although the initial phase of sub-prime crisis seems to have passed, the credit crunch is likely to continue well into 2009, particularly, in the European and US property markets.

However, on the contrary, the Gulf region and few other markets such as the Asia Pacific, will be less affected to a great extent, and will continue to be an attractive one, he added.

This positive stance about the Gulf Market follows the publication of DTZ's annual Money into Property report, which studies the global property trends. The report shows that the value of real estate capital market has touched $12trillion in 2007, an increase of over 18 percent from the previous year.

As against the year 2007, when Global Investment transactions grew to $730bn, DTZ expects a fall of 30 percent this year touching $500bn, due to the global investment environment last year. Even the global direct real estate transactions have fallen by 50 percent during the first quarter of 2008, as against the same period during 2007.

Williamson revealed that only a few regions can escape the effects of the sub-prime fall out. Based on the company's research and on-the-ground experience in dealing with Gulf markets, there are strong indications that the global property markets are less likely to surrender to these global trends.

DTZ, which began its operations in 1975, is one of the most established realty firms in the region, with a strong presence in six GCC locations, including Dubai, Abu Dhabi, Bahrain, Qatar, Kuwait and Saudi Arabia.

Labels: Market Trends, Middle-East, Real Estate News

According to a leading developer, the property market in Dubai and other Northern Emirates is likely to stabilize towards 2010, attaining a sustainable balance between investors and property owners.

The realty sector in the United Arab Emirates has witnessed an unparalleled growth over the recent years, due to the frenetic and speculative property market in Dubai, surpassing the rest of the Arabian Gulf States together with ease, said Mohammed Nimer, the CEO of MAG Group Property Development.

The construction boom will reach its heights during 2009, with about $3billion worth of realty under construction. Thereafter, the value of market is likely to fall back to the levels during 2007, of about $1billion, as majority of units are delivered. Hence, this is hoped to subdue the surging market prices, he added.

According to CEO of MAG Group, homeowners currently account for 30 percent of properties sold at launch. Real estate sales are currently being largely dominated by short-term investors, rather than end users. This has led to inflation in prices, as the units are 'sold-on' premium several times prior to completion.

The evidence of UAE construction boom reaching its peak next year is evident in the database of Proleads, a Dubai-based research company, which keeps tab on major construction projects across the region from initial planning to completion.

The database displays about 80 units blocks individually budgeted at a value of $100million now under construction in the Northern Emirates and Dubai, with a total value of $4billion. A dramatic decline is seen in the database on announced or newly planned constructions on similar buildings for next year and by 2010, dozens of projects are shown to reach completion.

With most projects still being under construction and the next bunch of supplies hitting the market in 2009-10 will help in bringing about some stability to the market, Nimer pointed out.

However, this is not likely to provide a major respite from mounting prices, as certain other factors such as ever- is not something to be expected in the short term, Nimer concludes.

Labels: Dubai Real Estate, Latest News, Market Trends

The expatriates are less likely to buy properties in Dubai henceforth, following the new regulation by the emirate's real estate regulator, that homeowners are not automatically entitled for long-term residency rights, reveals media reports.

Marwin bin Ghalita of RERA (Real Estate Regulatory Authority) in Dubai, had mentioned that Dubai will introduce short-term visas for foreign investors in the realty sector, and that "there is no direct link" between owning a property in Dubai and obtaining long-term residency rights.

These comments were quite contrary to the earlier statements made by local developers such as Emaar Properties, the leading real estate firm of Arab world.

Dubai, being the commercial hub of Arab world, has been witnessing a property boom ever-since the government permitted foreigners to invest in properties during 2002. Thereafter, a real estate regulation issued during 2006 permitted foreign freehold ownership in certain localities.
Expatriates from neighboring countries such as Pakistan, Lebanon and Iran, who have been facing political instabilities in their respective countries, were being lured to Dubai, over the assumption that owning a property here would ensure long-term visas to them, as it would prove to be a huge asset for them if situation in their own countries turned sour. Dubai was the only market in the region, offering such a link.

The recent comments by bin Ghalita, has now left the foreigners doubtful about the promise of residency from developers, including the Dubai Properties and Nakheel, which are state-owned and has legal backing.

"Developers should not lure investors to property sector with the promise of a residence visa," bin Ghalita commented.

The existence of "safety homes" in Dubai was a main factor for the huge property demand, and any decision on the part of regulators to review the visa status of existing homeowners would bring about "legal hazzles" and may badly hit the image of the emirate, says the media.

Owners are likely to feel that they have been offered a worthless investment, particularly, with the developers being close linked to the state in Dubai.

Already the shares of Emaar Properties slipped 0.45 percent and that of Union Properties by 2.68 percent, following the announcement by RERA on Tuesday.

In the meanwhile, the regulator has submitted a proposal to the government to grant visit visas to foreign homeowners, which may also be made applicable to existing homeowners if approved, revealed bin Ghalita.

About 80 percent to of UAE population are foreigners, with majority from the Indian subcontinent, Iran, and other Arab countries.

Labels: Latest News, Market Trends, Property Law

The UAE property market will attain a demand-supply balance during 2010-2011, as vast supplies of properties are expected during the coming years, reveal recent reports.

The UAE realty market has seen major growth over the past couple of years, due to several factors at the micro and macro economic levels. However, the prices of real estate products is likely to increase during the coming years, with the high demand from expatriates, and due to increase in cost of labour and construction materials, says Bilal A Kanbar, Business Line Manager, Impaqta.

According to a property report released by a Saudi-based management advisory services company and Great Properties, a real estate sales and marketing agency, based in Dubai, the real estate boom in UAE is likely to face a major hindrance which will seriously affect completion of projects across the emirates.

As per the report, one major problem is the ready-mix concrete suppliers, struggling with huge backlog due to massive shortage in cement supplies. To add to this, the prices of cement and steel have surged by 50 and 70 percent respectively last year. Increasing labour costs, which has gone up by three times over last year, is another factor.

The report states that delay in delivery of new properties has resulted in rent and price increases, by 40 to 50 percent over the past couple of years in Dubai.

According to Kanbir, most projects are still under construction, and the next series of supply will hit the market by 2010, and this will is expected to bring in stabilization in property prices.

Labels: Dubai Real Estate, Latest News, Market Trends

Labels: Market Trends, Middle-East, Property Prices, UAE

The boom witnessed in Ajman property market is primarily due to the economic growth and also due to the development taking place in its neighboring emirates Dubai and Sharjah.

Ajman has several reasonably priced residential projects that cater to the mid0-income groups. In fact, Ajman has the maximum number of medium-level developments, as majority of these are developed by players who are unable to bear the high construction cost of Dubai. To add to this, the new Escrow/Trust Account Law has brought out more stringent rules in Dubai, thereby decreasing the number of new medium-level developments there.

Analysts reveal that the price and rental structure of residential properties in Ajman are extremely moderate. Majority of developers offer affordable payment packages agreeable to mid-income standards. For instance, the price of a single bedroom apartment in Ajman’s Emirates City, is equivalent to that of a studio in Dubai. This has motivated several mid-income category buyers to re-assess their investment patterns.

In Ajman, the prices the average prices for a studio is US$600 per sqm and for a single bedroom apartment, it is US4480 per sqm.

Studies reveal that rates for residential properties in Ajman have surged by 30% in 2007. The demand for smaller units such as studios, single bedroom apartments too are surging, due to influx of expatriates from emirates of Dubai and Sharjah. They find Ajman to be a good residential and investment proposition due to its excellent connectivity to other emirates.
A similar growth rate in Ajman's property prices has been predicted by analysts for the year 2008-09 too.

Labels: Ajman, Market Trends, Property Prices

The growth of real estate sector in Dubai remains protected from all other fluctuations currently happening in oil prices, whether short or medium term, and in fact, the higher oil prices will only stimulate the fast-paced growth.

The value of few of the realty projects in GCC, Iraq and Iran have crossed $750bn, and about 33% of this belongs to the UAE, particularly, Dubai. The figure is higher than the combined GDP (Gross Domestic Product) in the same region, which totals to less than $700bn.

Experts predict that this trend will continue, despite the fact that oil prices are likely to drop during the short and medium terms.

A strong point to be noted in the growth of Dubai is that it has been consistently defying all predictions by Analysts. Over the past five years, most experts predicted that the realty market in Dubai will begin to show a downward trend, and that it is a "bubble waiting to be burst".
Although it is agreed that such growth has never been sustainable for long, none is able to explain why the market continues to thrive in Dubai.

GCC has the 17th largest economy in the world, with 500,000 high-income earners and a GDP of $525 billion. The total half trillion dollar economy creates more than $500 billion in revenue, which is being used for investment. The volume is believed to boost the real estate and construction sector in Dubai.

Labels: Dubai Real Estate, Market Trends, Real Estate News

The realty companies in Gulf, whose profits have increased by more than 20% last year, are expected to continue their strong growth in 2008, remaining immune to global economic slowdown, maintaining favorable market conditions and foreign investments, say analysts.

A Real Estate Analyst, Stefan Schurmann, at EFG Hermes, said "The fundamentals for the Gulf region in 2008 are good, and this will help real estate developers in the region to post healthy profits."

Delivery of projects is happening, and residential units are being delivered and booked accordingly, and the realty companies are re-evaluating their land value and lowering interest rate, which is, in turn, motivating people to buy, he said.

The net income of 17, out of top 20 realty companies in the six member GCC region increased to 21%, while their combined assets increased to 55%, touching $46,98bn, according to Zawya Investor data.

Schurmann said that Gulf realty developers are benefiting from the global slowdown with foreign investors putting their money into the region. An increasingly sophisticated legal framework is also helping to attract international buyers.

The London-based MEED (Middle East Economic Digest) indicates that Kuwait, Bahrain, Saudi Arabia, UAE and Qatar are spending $1.45 trillion on an average on real estate projects.

The Gulf's largest construction market, the UAE, has approximately $223.8bn worth of realty projects under construction, with some of the main benefactors of construction boom.

Deyaar Development has seen a 29% increase in profit, touching $145.7million, with the value of projects touching Dh.8bn in 2207, as against Dh.2.4bn in 2006.

Union Properties had a 12% profit, touching $186.5mn, due to increase in profit margin from sales and management.

Emaar Properties, the largest realty developer in the region, has however, recorded only a small increase of 3.2% in profit, touching Dh.6.57bn last year, due to its diversification activities. Gowever, Emaar expects its profit to be in line with 2007 this year too, while a few analysts expect Emaar to perform even better.

In Abu Dhabi, Sorouh Real Estate and Aldar Properties posted strong gains with the property market continuing to boom. Aldar's profit soared to 29%, touching $342.3mn, while Sorough saw its profit climbing by 55%, touching $528.5mn.

Even the Saudi-based realty companies, involved in construction of 'economic cities' reported strong results, as demand for property in the Kingdom continued to grow.

Labels: Latest News, Market Trends, Middle-East, UAE

The UAE economy has achieved significant growth record of 7.4 percent in 2007 over the previous year, with the gross domestic product (GDP) touching Dh.698bn, announced the UAE Ministry of Economy.

As per the Ministry's report, the biggest contributor to the UAE's GDP is the fast emerging real estate sector. During 2007 the real estate contributed 8 percent to the country's GDP, with an investment of Dh.25.8billion. The government has shown considerable interest in assisting UAE nationals to own free residential units through various residential plans that offer good standard of living and stability.

About 23.1billion (16 percent of total investment) has been put forward for establishment of developed infrastructure, including airport expansions, internal and external road networks, bridge and tunnel constructions and communications.

The size of fixed investments in 2007 has grown to Dh.144.5 billion, as against Dh.121 billion in 2006. The investment percentage to domestic product has touched 20.7 percent in 2007. Although the real estate and manufacturing sectors, jointly, contributed 35 percent of the total investments in the country during 2007, industries such as medicine, petrochemical, building materials, and food continued to surge.

Labels: Latest News, Market Trends, UAE

The shortage of housing supply, coupled with unprecedented increase in realty prices in 2008, will make Dubai realty market, the second most expensive in the world, only next to West End of London, reports HC Securities Brokerage.

The Egypt-based brokerage, in its Economy Watch Bulletin, reported that increasing growth rates have enabled expatriates with the means to rent houses at high rates, and the situation is quite unlikely to be resolved this year too, as the market would continue to experience shortage in supply of housing units.

The caps by Government have been unable to address the surge in inflation caused due to rapid increase in rents across the region. The HC Securities state that with the GCC rents forecast, further set to increase by 20% this year, the rents in Dubai were capped at 15% in 2006, and the rates are lowered to 5% this December.

"However, the increase in rent rates is backfiring greatly on the rate of inflation. If the main reason behind mounting inflation is skyrocketing rent rates, we note that limiting the rent prices do not seem to have solved the problem," said HC Securities.

Labels: Dubai Real Estate, Market Trends, Property Prices

The office rents in Dubai, and Doha are likely to go up by 20% next year, as the demand surpasses supply, and due to the expansion of international business in the Gulf region, revealed the property services company, CB Richard Ellis.

"The top-quality offices in Dubai, cost as much as Dh.500 per square foot, and this in-turn could increase prices to Dh.600 per square feet next year, which would continue for 18 months, and thereafter the prices may probably halve to about Dh.300 per square foot in another five or six years with an increase in market supply" says Nicholas Maclean, the Managing Director, CB Richard Ellis.

However, at present, there are not enough supplies reaching the market, which would do no good to the businesses or for the government.

As far as Doha property is concerned, the demand is increasing, with an expansion in oil and gas companies, and the government is seeking new space. Although, the prices in Doha are lower than that in Dubai, the trends are the same.

On the other hand cities in India, Egypt, and Philippines are gaining advantage from the rising prices, as businesses turn to them for back-office operations, said Maclean.

The office space in Dubai is likely to more than triple touching 100 million square feet, as against the present 30million, during the next five to six years, Maclean concluded.

Labels: Dubai Real Estate, Market Trends, Office Space, Rentals

The real estate prices in Dubai are unlikely to stabilize during the next five years, in case the rent-cap is not lifted, and if the government does not take initiative to implement measures that could contribute in improving the supply market, say experts.

A study of the Dubai real estate sector by the Dubai Chamber of Commerce and Industry (DCCI) revealed that demand and supply of real estate will reach equilibrium only in 2023, provided, the government does not interfere or bring in new policies.

The Director of DCCI's Data Management and Business Research, Dr. Belaid Rettab, said "Equillibrium is when demand meets supply, and the prices remain stable."



Imposing rent cap, apart from delaying the process of stabilizing the market, will not be able to address price hikes too. Being supporters of liberal business, we do not prefer to have rent caps. The simplest solution to prevent price hikes is to bring in more supply to the market. The government, apart from supporting development of mortgage sectors, will also have to arrange finance facilities to developers so that they could build more, Rettab said.

The DCCI study revealed that the property prices have increased by a 10 percent cumulative annual growth rate in the medium term. The long term increase was 4 percent, which translates itself into an average price hike of seven percent, equivalent to the current rent cap imposed by Dubai government.

The DCCI study revealed that the government policies will positively influence income, population, cost, financing availability, tastes and preferences of buyers and speculation of future prices that could contribute to increase in demand.

The increase in supply will depend on the financing, production inputs cost, construction technology and expectation of future demand.

Labels: Dubai Real Estate, Market Trends, Mortgages, Property Prices

The real estate prices in Gulf Countries will continue to remain as in the present, due to land scarcity and fluidity caused by surging oil prices and mounting speculations, revealed a special report.

A weekly report by Al-Masar Group states that the inflation in building & construction sector in Gulf, has reached fresh levels through construction of 2837 projects, mostly in UAE, Saudi Arabia, at an estimated value of $2.4trillion.



A recent study by a Dubai-based Research Company, 'Proleads', states that the King Abdullah Economic City, is the largest project, currently in progress in the region, which is worth around $120billion.

Next in line, is the 'City of Silk' in Kuwait, costing about $86billion, followed by the Dubailand in UAE, which costs around $60billion.

However, the report depicted conflicting figures and statistics, depending on the size of planned or under-construction projects. Massive projects, which include industrial islands and skyscrapers, lie behind the growth of regional construction and building sector, and huge boom in the sector, has led to better maintenance services, facilitated construction, overhauled utility management and helped a high demand for the sector.

The size of utility management market in Gulf countries, except Saudi Arabia, touched Dh.17.72bn during 2006, and is expected to grow up by 15.3 percent by 2012, stated the report.

Labels: Market Trends, Property Prices, Real Estate News

As per two recent studies by Damac Capital International and HSBC, the UAE, which accounts for more than sixty percent of the real estate development in the region, is expected to experience the realty boom beyond 2015.

Analysts forecast that Dubai, which continues to experience major demand would continue to surpass supply for a couple of years more, while the Abu Dhabi market, is expected to pick up and maintain high rental yields beyond seven percent until 2013.

The analysts of Damac Capital, Pamela Chikhani and Hany Seif, predicts that although the Dubai property market signifies only a small fraction of global market, it will continue to be a major force in the regional real estate investment.

Asteco, a Dubai-based realty agent, reveals that the Dubai property market accounts for 47 percent of the entire GCC market. Abu Dhabi is a distant second with 14 percent. Hence both Dubai and Abu Dhabi put together, account for more than 60 percent of GCC real estate market.
It has been estimated that within the next decade realty investors would pump in about $300bn into Dubai's real estate developments.

However, HSBC's Analysts believe that, Abu Dhabi emirate would establish itself as a new regional real estate market, as the sales activity has picked up this year, and the market remains very tight with stronger-than-expected growth in prices and rents.

Labels: Dubai Real Estate, Market Trends, UAE

Labels: Market Trends, Property Law, UAE

Dubai Real Estate Corporation (DREC) has begun operations towards development of Dubai real estate sector, so as to fill in the niche market gaps and boost urban growth of Dubai. DREC was recently established following a verdict by H.H. Sheikh Mohammad bin Rashid Al Maktoum, the Vice President and Prime Minister of UAE and Ruler of Dubai.

DREC is a full-solution real estate company, responsible for offering various value-added services, such as leasing and facility management services, real estate management services, and asset management consultancies, for properties that are registered in the name of Dubai Government or any of its departments. Even investments within the entertainment, hospitality and leisure sectors are all based on DREC's operations, and the company has confirmed its plan to develop these specific areas in future.

The Chief Executive Officer of DREC, Hisham Al Qassim, says "DREC has been established to further strengthen the real estate assets in Dubai, and we intend to accomplish this by concentrating on major areas, targeting niche market gaps, and complementing the urban growth by focusing the underdeveloped areas. We are planning a country-wide expansion in the near future, and hope to play a major role in the next chapter of UAE's development."

Currently, DREC is carrying on preliminary studies on the Dubai property sector, and the results will indicate the key areas for development, depending on market demand and growth potential. The company has revealed its intentions to begin operations by focusing on prime areas, while also maintaining strong market in commercial, residential, industrial, and tourism sectors.

Labels: Dubai Real Estate, Latest News, Market Trends

According to a report by Colliers International, the Dubai realty sector will shortly see 150,000 new residential units.

Out of these about 134,838 units will be constructed in various 'foreign ownership zones', with about 3415 units in Al Barsha and 4609 units in the Tecom areas. Thirty percent of the Dubai Marina is empty, with owners living in 33 percent of the houses, and the remaining 37 percent are rented out.

The report highlighted the fact that a lot of attention is being focused on the development of high-end products, while the low and middle-income segments are being given only minimal attention. Highlighting the consequences of an oversupply, the report mentioned that high-end residential segment may assume a top-down nature, leading to market-wide relaxation in lease terms, which are currently heavily weighed in favour of landlords."

The report stated that with the landlords getting more competitive, the yearly advance rent payments will be widely replaced by quarterly, or probably, by monthly advance payments within eighteen months. However, this will lead to tightening of regulations, governing the policies of real estate brokerage firms, to ensure the income security of landlords.

Labels: Dubai Real Estate, Market Trends, Residential

According to a report by The National Investor, the demand for housing in Abu Dhabi, is likely to surpass supply for the next decade, spiraling rent rates.

"We expect a situation of oversupply to threaten the value of local property market," reports