Time ripe for long-term investors to re-enter UAE realty market
Wednesday, June 17, 2009
With the local and global banks re-entering the mortgage lending market, it is evident that UAE property market is re-gaining confidence of the financial sector, and few analysts believe that this may be the right time for long-term investors to re-enter the market.
James Gauduchon, the Manager-Corporate Marketing at Better Homes, a real estate company, said that confidence is re-entering the market, and it looks like the property market has begun heading upwards again.
The Head of Retail at the Dubai Bank, Mohammed Amiri, said that the classic pattern for any property market is a slow start upwards, then a period of manic buying, followed by slowdown and standstill. The market then changes direction, and prices would begin to head downwards, before collapsing into a new market bottom, after which, the cycle would move upwards again.
The Chief Executive Officer - Personal Financial Services, HSBC - Middle East and North Africa, Abdulfattah Sharaf, said that with the ease in lending and the attractive prices offered by the housing environment in the UAE, more end-users are grabbing the opportunity to own a home.
Following a 30 to 40 percent drop, the initial signs of stabilization in Dubai real estate sector have appeared, taking observers by a surprise, said Phillippe Dauba Pantanacce, Senior Economist, Standard Chartered Bank.
The volume of distressed stock has gradually diminished. The end of the freefall is an encouraging sign for Dubai and for Abu Dhabi, as it had a direct negative impact on the banking sector with higher defaults and non-performing loans.
Gauduchon said that the residential segment will be the first to recover, and commercial and retail sectors would soonfollow.
However, analysts advised caution, and said a further decline, particularly in few segments of the market, cannot be ruled out. The returns for properties that are away from the desert, will be more than the off-plan projects or those in obscure locations.
On the whole, completed high-quality properties that are competitively priced and in prime locations, will continue to generate more demand and value than others, said Suvo Sarkar, Executive Vice President and General Manager - Retail Banking at Emirates NBD, the region's largest bank in terms of assets.
Traditional real estate near the sea or in the middle of the town will be worth more in the long-term. The next few years, would be the best time for investment for long-term players, he added.
James Gauduchon, the Manager-Corporate Marketing at Better Homes, a real estate company, said that confidence is re-entering the market, and it looks like the property market has begun heading upwards again.
The Head of Retail at the Dubai Bank, Mohammed Amiri, said that the classic pattern for any property market is a slow start upwards, then a period of manic buying, followed by slowdown and standstill. The market then changes direction, and prices would begin to head downwards, before collapsing into a new market bottom, after which, the cycle would move upwards again.
The Chief Executive Officer - Personal Financial Services, HSBC - Middle East and North Africa, Abdulfattah Sharaf, said that with the ease in lending and the attractive prices offered by the housing environment in the UAE, more end-users are grabbing the opportunity to own a home.
Following a 30 to 40 percent drop, the initial signs of stabilization in Dubai real estate sector have appeared, taking observers by a surprise, said Phillippe Dauba Pantanacce, Senior Economist, Standard Chartered Bank.
The volume of distressed stock has gradually diminished. The end of the freefall is an encouraging sign for Dubai and for Abu Dhabi, as it had a direct negative impact on the banking sector with higher defaults and non-performing loans.
Gauduchon said that the residential segment will be the first to recover, and commercial and retail sectors would soonfollow.
However, analysts advised caution, and said a further decline, particularly in few segments of the market, cannot be ruled out. The returns for properties that are away from the desert, will be more than the off-plan projects or those in obscure locations.
On the whole, completed high-quality properties that are competitively priced and in prime locations, will continue to generate more demand and value than others, said Suvo Sarkar, Executive Vice President and General Manager - Retail Banking at Emirates NBD, the region's largest bank in terms of assets.
Traditional real estate near the sea or in the middle of the town will be worth more in the long-term. The next few years, would be the best time for investment for long-term players, he added.
Labels: Investment Property, Market Trends, Mortgages
Dubai House Price Index shows 41 percent decline during Q1 2009
Thursday, April 30, 2009
The Dubai House Price Index for first quarter of 2009 released by the leading global real estate consultancy, Colliers International, has indicated a drop of 41 percent during the first three months of this year.
The index has been compiled using mortgage transaction data from financial institutions accounting to 60 percent of the mortgage market in Dubai. It demonstrates a 34 percent decline year-on-year between first quarter of 2008 and first quarter of 2009.
The property prices in the emirate had returned to the levels equivalent to that during Q2 2007, the report pointed out. When compared to other markets in the Gulf, the global crisis has had a huge impact on Dubai, mainly due to high level of integration with global economy as a regional hub, and the wide speculation in property assets before the market's peak during third quarter of 2008.
Speaking about the Q1 2009 report, the Chief Executive Officer of Colliers International, John Davis, said that the negative sentiment is a major factor contributing to decline in the index and availability of finance too has a major impact on the market. The end-users are more concerned about job security, and hence are hesitant to enter the market, despite the finances being open for them.
Looking at the brighter side of things, the index remains unaltered as in March 2009. But, it is too early to predict whether the halt in decline of the index can be sustained during the quieter summer months, Davis said.
The House Price Index takes into account the price trends achieved for completed properties, as against the properties that are still under construction. The results obtained by including the Burj Dubai development in the results, the index indicates that completed properties fell 31 percent, while the properties under construction fell 56 percent. Keeping aside the Burj Dubai, the completed projects fell 32 percent, while those under construction fell 51 percent.
Mortgage lending is beginning to revive in the emirate, with several financial institutions re-entering the market, Davis pointed out.
The index has been compiled using mortgage transaction data from financial institutions accounting to 60 percent of the mortgage market in Dubai. It demonstrates a 34 percent decline year-on-year between first quarter of 2008 and first quarter of 2009.
The property prices in the emirate had returned to the levels equivalent to that during Q2 2007, the report pointed out. When compared to other markets in the Gulf, the global crisis has had a huge impact on Dubai, mainly due to high level of integration with global economy as a regional hub, and the wide speculation in property assets before the market's peak during third quarter of 2008.
Speaking about the Q1 2009 report, the Chief Executive Officer of Colliers International, John Davis, said that the negative sentiment is a major factor contributing to decline in the index and availability of finance too has a major impact on the market. The end-users are more concerned about job security, and hence are hesitant to enter the market, despite the finances being open for them.
Looking at the brighter side of things, the index remains unaltered as in March 2009. But, it is too early to predict whether the halt in decline of the index can be sustained during the quieter summer months, Davis said.
The House Price Index takes into account the price trends achieved for completed properties, as against the properties that are still under construction. The results obtained by including the Burj Dubai development in the results, the index indicates that completed properties fell 31 percent, while the properties under construction fell 56 percent. Keeping aside the Burj Dubai, the completed projects fell 32 percent, while those under construction fell 51 percent.
Mortgage lending is beginning to revive in the emirate, with several financial institutions re-entering the market, Davis pointed out.
Labels: Dubai Real Estate, Market Trends, Mortgages
Lack of mortgage lending may plunge property prices further
Saturday, March 28, 2009
Property prices in the UAE are likely to drop further, if the banks continue to hesitate to begin mortgage lending.
The Managing Director of Gulf Lenders Network, Damian Hitchen, also a master broker, expressed his opinion that once the finance and liquidity flows into the market, it will help soften the price correction, and property prices will not drop further.
This is particularly true as far as Dubai is concerned, as it is here that the prices have dropped the most, said Hitchen.
"The overall portfolio exposure by the banks, are getting worse by the day, and the banks are likely to have real problem. By stopping lending, they are increasing default cases and worsening the situation," he commented.
The banks across the UAE have greatly reduced lending, despite the demand for mortgages. Banks have suffered lack of liquidity, as international banks have pulled out their funds following the collapse of Lehman Brothers. With this, the loan-to-deposit ratios of several banks are much higher than the 100 limit, and they are now seeking to reduce the ratio by collecting deposits and restricting lending.
Hitchen said that the demand for mortgages has regained momentum and his network is currently processing more requests than during the summer 2008, when the prices were at their best.
The banks need to be more "vocal" about their requirement for assistance. The Government should initiate more effort to assist the banks with sufficient funds, provided, they lend it back into the market. The Banks, will have to report back to the Central Bank every month, regarding the purpose for which the money was utilized, he explained.
The Managing Director of Gulf Lenders Network, Damian Hitchen, also a master broker, expressed his opinion that once the finance and liquidity flows into the market, it will help soften the price correction, and property prices will not drop further.
This is particularly true as far as Dubai is concerned, as it is here that the prices have dropped the most, said Hitchen.
"The overall portfolio exposure by the banks, are getting worse by the day, and the banks are likely to have real problem. By stopping lending, they are increasing default cases and worsening the situation," he commented.
The banks across the UAE have greatly reduced lending, despite the demand for mortgages. Banks have suffered lack of liquidity, as international banks have pulled out their funds following the collapse of Lehman Brothers. With this, the loan-to-deposit ratios of several banks are much higher than the 100 limit, and they are now seeking to reduce the ratio by collecting deposits and restricting lending.
Hitchen said that the demand for mortgages has regained momentum and his network is currently processing more requests than during the summer 2008, when the prices were at their best.
The banks need to be more "vocal" about their requirement for assistance. The Government should initiate more effort to assist the banks with sufficient funds, provided, they lend it back into the market. The Banks, will have to report back to the Central Bank every month, regarding the purpose for which the money was utilized, he explained.
Labels: Mortgages, Property Prices, UAE
Deyaar unveils 2009 Business Strategy
Thursday, March 19, 2009
Deyaar Development has sketched out a strategy for 2009, to reduce the default rates by the company, revealed the Chief Executive, Markus Giebel.
"About 60 percent of our customers have come back to us, saying they were unable to pay up on their property. We hope that our new strategy would help in bringing down our existing default rates to around 20 percent," Giebel said.
He said Deyaar will not see any major impact on its profitability, as it has adopted a consolidation strategy, and projected that the 2009 projects of the company would be about Dh.500mn touching 2007 levels.
"Profits and revenues are not the major issues for us today. What is more important, currently, is to ensure sufficient cash flow, and help our customers facing financial difficulties," Giebel said.
As per Deyaar's new consolidation strategy, the Deyaar Park, Deyaar Enclave and Mirar Residences, comprising four million square foot area in Dubai, would be consolidated with the rest of Deyaar portfolio.
Investors in these projects will be given the option to transfer their ownership to projects which would be completed on a fast-track basis.
Deyaar plans to do a project consolidation of up to 10 percent cash-back of the paid-up amount, and a 50 percent consolidation option on Deyaar Park, Mirar Residences and Deyaar Enclave. On Deyaar Enclave, the company plans to give the option of 100 percent pay-back to the investor.
"We will first return the money to the investor and go to RERA, saying we have no liability. Only then will RERA release the Escrow," Giebel said.
The prices of units that were sold at the time of launch, or during the initial stages of construction, will be reduced inline with lower construction costs, reveals the new strategy by Deyaar.
For instance, the prices of Deyaar's Oxford Tower will be reduced by an average of 30 percent from Dh.2450 per square feet to Dh.1715 per square feet. In Fairview Residency, price reductions will be an average of 25 percent from Dh.1845 per square foot to Dh.1385 per square foot.
The Bristol Residence sales prices will be reduced by an average of 25 percent from Dh.2079 per square foot to Dh.1560 per square foot. The Bristol Office prices will be reduced by 30 percent on an average from Dh.2788 per square foot to Dh.1950 per square foot.
Deyaar will offer lower installments to customers on certain units through soft payment plans, and this will be implemented by adjusting original payment schedule, permitting customers facing liquidity problems to avoid default and meeting their obligations.
Giebel also mentioned that in certain locations with infrastructure problems, the company plans to give buyers an option to swap for properties in other locations. However, this option will be on a purely voluntary basis, and this will give customers the option to transfer ownership to premium projects in prime locations. It will also allow them to consolidate their total outstanding payments.
Deyaar pointed out that it has not cancelled any of its projects so far, not are there any defaults being recorded. Deyaar's strategy is inline with regulations by RERA, and all of its projects will adhere to the Escrow Law. The company is also under negotiations with financial institutions to develop special mortgage packages for customers and has already signed a deal with Dubai Islamic Bank, he concluded.
"About 60 percent of our customers have come back to us, saying they were unable to pay up on their property. We hope that our new strategy would help in bringing down our existing default rates to around 20 percent," Giebel said.
He said Deyaar will not see any major impact on its profitability, as it has adopted a consolidation strategy, and projected that the 2009 projects of the company would be about Dh.500mn touching 2007 levels.
"Profits and revenues are not the major issues for us today. What is more important, currently, is to ensure sufficient cash flow, and help our customers facing financial difficulties," Giebel said.
As per Deyaar's new consolidation strategy, the Deyaar Park, Deyaar Enclave and Mirar Residences, comprising four million square foot area in Dubai, would be consolidated with the rest of Deyaar portfolio.
Investors in these projects will be given the option to transfer their ownership to projects which would be completed on a fast-track basis.
Deyaar plans to do a project consolidation of up to 10 percent cash-back of the paid-up amount, and a 50 percent consolidation option on Deyaar Park, Mirar Residences and Deyaar Enclave. On Deyaar Enclave, the company plans to give the option of 100 percent pay-back to the investor.
"We will first return the money to the investor and go to RERA, saying we have no liability. Only then will RERA release the Escrow," Giebel said.
The prices of units that were sold at the time of launch, or during the initial stages of construction, will be reduced inline with lower construction costs, reveals the new strategy by Deyaar.
For instance, the prices of Deyaar's Oxford Tower will be reduced by an average of 30 percent from Dh.2450 per square feet to Dh.1715 per square feet. In Fairview Residency, price reductions will be an average of 25 percent from Dh.1845 per square foot to Dh.1385 per square foot.
The Bristol Residence sales prices will be reduced by an average of 25 percent from Dh.2079 per square foot to Dh.1560 per square foot. The Bristol Office prices will be reduced by 30 percent on an average from Dh.2788 per square foot to Dh.1950 per square foot.
Deyaar will offer lower installments to customers on certain units through soft payment plans, and this will be implemented by adjusting original payment schedule, permitting customers facing liquidity problems to avoid default and meeting their obligations.
Giebel also mentioned that in certain locations with infrastructure problems, the company plans to give buyers an option to swap for properties in other locations. However, this option will be on a purely voluntary basis, and this will give customers the option to transfer ownership to premium projects in prime locations. It will also allow them to consolidate their total outstanding payments.
Deyaar pointed out that it has not cancelled any of its projects so far, not are there any defaults being recorded. Deyaar's strategy is inline with regulations by RERA, and all of its projects will adhere to the Escrow Law. The company is also under negotiations with financial institutions to develop special mortgage packages for customers and has already signed a deal with Dubai Islamic Bank, he concluded.
Labels: Deyaar, Mortgages, Real Estate News
Dubai property prices drop to mid-income levels
Saturday, March 14, 2009
According to experts, mortgages in Dubai would be easier to reach, with the property prices likely to drop to mid-income levels. Applications from potential buyers seeking mortgages have dropped considerably in recent months.
Property prices are plummeting throughout Dubai, thereby bringing about a ray of hope for those that were earlier considered out-priced. But the huge mortgage requirements and large deposits are keeping them away from easy reach.
The Managing Director of Almas Capital, Barmak Besharaty, when speaking during a Cityscape networking forum, yesterday, mentioned that Dubai would surely be a better place to live in, once the families can afford to buy or rent. This is likely to happen when the real estate assets align with the mid-income margin in the country.
Until a few months back, property in Dubai was meant only for the wealthy. Several developers were offering luxury lifestyle, which were out of reach for majority of the common population. Developers were pushing up prices of their properties, to keep up with the speculators and market forces, aiming to make money.
However, at present, one can get a decent mortgage in Dubai, if they are free of car loans and personal loans, and have atleast Dh.300,000 in a bank account, as a handy deposit, and ideally, draw a huge salary, said Shohail Zubairi, Chief Executive of Dar Al Sharia, the Legal and Financial Consultancy.
However, the average mid-income person already has atleast one loan, and does not have several thousands of dirhams as balance in their bank account. Moreover the current mortgage rates are not too attractive either, he points out.
However, in the current situation, even the developers need not bother about building new affordably housing developments aimed at mid-income bracket, as several developments in Dubai that had earlier been branded as luxury developments, now fall within the mid-income bracket.
Property prices are plummeting throughout Dubai, thereby bringing about a ray of hope for those that were earlier considered out-priced. But the huge mortgage requirements and large deposits are keeping them away from easy reach.
The Managing Director of Almas Capital, Barmak Besharaty, when speaking during a Cityscape networking forum, yesterday, mentioned that Dubai would surely be a better place to live in, once the families can afford to buy or rent. This is likely to happen when the real estate assets align with the mid-income margin in the country.
Until a few months back, property in Dubai was meant only for the wealthy. Several developers were offering luxury lifestyle, which were out of reach for majority of the common population. Developers were pushing up prices of their properties, to keep up with the speculators and market forces, aiming to make money.
However, at present, one can get a decent mortgage in Dubai, if they are free of car loans and personal loans, and have atleast Dh.300,000 in a bank account, as a handy deposit, and ideally, draw a huge salary, said Shohail Zubairi, Chief Executive of Dar Al Sharia, the Legal and Financial Consultancy.
However, the average mid-income person already has atleast one loan, and does not have several thousands of dirhams as balance in their bank account. Moreover the current mortgage rates are not too attractive either, he points out.
However, in the current situation, even the developers need not bother about building new affordably housing developments aimed at mid-income bracket, as several developments in Dubai that had earlier been branded as luxury developments, now fall within the mid-income bracket.
Labels: Dubai Real Estate, Mortgages, Property Prices
Amlak-Tamweel merger hoped to boost mortgage finance in UAE
Wednesday, January 07, 2009
Two major Islamic mortgage providers in the UAE - Amlak Finance PJSC and Tamweel, have merged into a new $8billion lender to ensure that mortgage thrives in the country for several more years.
According to Rami Sidani - Head MENA (Middle East and North Africa) Investments at Schroders Investment Management, although there is no direct added value or economic benefit to be derived out of the merger, having both major companies under a single entity would be the ideal strategy for the government to offer much-required support for the two largest players of mortgage finance in the country, which is a vital segment for real estate recovery.
With both companies being placed under the Emirates Development Bank, it is a strong indication that the government is acting quickly to stimulate the real estate sector and offer the required support, he added.
The Fund Manager of Al Mal Capital, Tarek Qaqish, said that the merger would improve the capability levels of both the companies. The merger of both under Emirates Development Bank would be supported by the Federal Government, and this would enhance the liquidity of both companies, he said.
The Chief Executives of both companies are hoping that the merger would be complete towards the first quarter of 2009.
According to Rami Sidani - Head MENA (Middle East and North Africa) Investments at Schroders Investment Management, although there is no direct added value or economic benefit to be derived out of the merger, having both major companies under a single entity would be the ideal strategy for the government to offer much-required support for the two largest players of mortgage finance in the country, which is a vital segment for real estate recovery.
With both companies being placed under the Emirates Development Bank, it is a strong indication that the government is acting quickly to stimulate the real estate sector and offer the required support, he added.
The Fund Manager of Al Mal Capital, Tarek Qaqish, said that the merger would improve the capability levels of both the companies. The merger of both under Emirates Development Bank would be supported by the Federal Government, and this would enhance the liquidity of both companies, he said.
The Chief Executives of both companies are hoping that the merger would be complete towards the first quarter of 2009.
Labels: Latest News, Mortgages
Banks under pressure on the prospect of increasing loan defaults
Wednesday, December 31, 2008
UAE faces a slowdown in property loans and real estate activity as the country's property boom loses steam amid the global credit crisis.
The mortgage defaults and property foreclosures is a very serious problem for banks and real estate developers are being hurt as home sales fall, making it harder for them to repay loans. UAE banks and lending institutions have begun toughening their lending criteria. Raj Madha, a director responsible for equity research at EFG-Hermes Holding SAE, said in a report that the scale of banking sector exposure to property developers and contractors means that a problem for the property sector is substantially a problem for the banks.
Moody's Investors Service has announced that it has revised downwards the outlooks on the ratings of four UAE banks - Dubai Islamic Bank PJSC, Dubai Bank, Abu Dhabi Commercial Bank PJSC and First Gulf Bank PJSC. They have changed the rating to 'negative' from 'stable' and the outlooks on the ratings for all senior unsecured debt issued by the above-named banks have also been revised accordingly.
John Tofarides, Analyst in Moody's Financial Institutions Group said that the rating reflects the growing downward pressures on asset prices and the anticipated profitability pressures from rising funding costs derived from increasingly scarce liquidity and loss of confidence. They have said that that soaring loan growth levels and future loan commitments are exacerbating the pressures on UAE banks' liquidity.
However, Obaid Humaid Al Tayer, Minister of State for Financial Affairs said that the outlook for economic growth for next year is positive. He added that Al Tayer said the Ministry of Finance had imposed conditions on the release of payments to banks to end the liquidity crisis. Central Bank Governor Sultan Nasser Al Suwaidi, in a speech to the FNC, said the national economy is strong. According to the IMF estimates, the economy grew 7 per cent this year and it is expected to slowdown next year.
The mortgage defaults and property foreclosures is a very serious problem for banks and real estate developers are being hurt as home sales fall, making it harder for them to repay loans. UAE banks and lending institutions have begun toughening their lending criteria. Raj Madha, a director responsible for equity research at EFG-Hermes Holding SAE, said in a report that the scale of banking sector exposure to property developers and contractors means that a problem for the property sector is substantially a problem for the banks.
Moody's Investors Service has announced that it has revised downwards the outlooks on the ratings of four UAE banks - Dubai Islamic Bank PJSC, Dubai Bank, Abu Dhabi Commercial Bank PJSC and First Gulf Bank PJSC. They have changed the rating to 'negative' from 'stable' and the outlooks on the ratings for all senior unsecured debt issued by the above-named banks have also been revised accordingly.
John Tofarides, Analyst in Moody's Financial Institutions Group said that the rating reflects the growing downward pressures on asset prices and the anticipated profitability pressures from rising funding costs derived from increasingly scarce liquidity and loss of confidence. They have said that that soaring loan growth levels and future loan commitments are exacerbating the pressures on UAE banks' liquidity.
However, Obaid Humaid Al Tayer, Minister of State for Financial Affairs said that the outlook for economic growth for next year is positive. He added that Al Tayer said the Ministry of Finance had imposed conditions on the release of payments to banks to end the liquidity crisis. Central Bank Governor Sultan Nasser Al Suwaidi, in a speech to the FNC, said the national economy is strong. According to the IMF estimates, the economy grew 7 per cent this year and it is expected to slowdown next year.
Labels: Market Trends, Mortgages
RAKBANK strikes deal with Sorouh, Aldar for mortgage finance in Abu Dhabi
Thursday, December 25, 2008
With the RAKBANK announcing new mortgage finance service schemes for several existing and upcoming projects in the city, potential buyers stand a good chance of owning their dream home in Abu Dhabi.
The RAKBANK, together with Aldar Properties and Sourouh Real Estate, have entered into a deal, wherein the bank, being a strategic mortgage partner for the developers, is offering upto 90 percent mortgage finance and 25-year loan tenure for all their residential freehold properties in Abu Dhabi.
The projects include the Al RAha Beach and Yas Island by Aldar, and Shams project on Reem Island by Sorouh, and the iconic architecture underway for the Sun Tower, Gate district, Alghadeer and Sky Tower.
According to Graham Honeybill, the General Manager of RAKBANK, the announcements of several unique landmark projects, multi-billion dirham investments and growing demand for housing, has made the Capital a property hotspot in the Gulf region, and therefore, mortgage finance provider becomes the focus area.
RAKBANK, the National Bank of Ras Al-Khaimah, was one of the first conventional banks to offer mortgage finance in the UAE four years ago, and has thereafter built a reputation in providing fast, flexible mortgage services in the UAE. This new partnership deal is the latest by the bank, although it is already offering mortgage finance services to several major residential projects developed by other developers such as Nakheel, Emaar, Emaar Bawadi, Mizin, Dubai Properties, ETA Star and Deyaar.
Both Sorouh Real Estate and Aldar are two largest property developers with about Dh.60bn and Dh.45bn worth developments in hand. Aldar owns 51mn square meters of land in Abu Dhabi, while Sorouh is undertaking development of 22million square meters of land in the city.
The RAKBANK, together with Aldar Properties and Sourouh Real Estate, have entered into a deal, wherein the bank, being a strategic mortgage partner for the developers, is offering upto 90 percent mortgage finance and 25-year loan tenure for all their residential freehold properties in Abu Dhabi.
The projects include the Al RAha Beach and Yas Island by Aldar, and Shams project on Reem Island by Sorouh, and the iconic architecture underway for the Sun Tower, Gate district, Alghadeer and Sky Tower.
According to Graham Honeybill, the General Manager of RAKBANK, the announcements of several unique landmark projects, multi-billion dirham investments and growing demand for housing, has made the Capital a property hotspot in the Gulf region, and therefore, mortgage finance provider becomes the focus area.
RAKBANK, the National Bank of Ras Al-Khaimah, was one of the first conventional banks to offer mortgage finance in the UAE four years ago, and has thereafter built a reputation in providing fast, flexible mortgage services in the UAE. This new partnership deal is the latest by the bank, although it is already offering mortgage finance services to several major residential projects developed by other developers such as Nakheel, Emaar, Emaar Bawadi, Mizin, Dubai Properties, ETA Star and Deyaar.
Both Sorouh Real Estate and Aldar are two largest property developers with about Dh.60bn and Dh.45bn worth developments in hand. Aldar owns 51mn square meters of land in Abu Dhabi, while Sorouh is undertaking development of 22million square meters of land in the city.
Major Abu Dhabi firms join together to launch new mortgage finance provider
Friday, November 28, 2008
Major investment, real estate and finance companies in Abu Dhabi have joined together to announce the launch of Abu Dhabi Finance, a new entity formed to serve the real estate market of the emirate, and to serve the demand for mortgage finance by consumers.
With a capital of Dh.500million, the objective of the company is to help Abu Dhabi meet its long-term strategies of sustainable economic growth by financing the growing demand for real estate.
Following one year of planning, Abu Dhabi Finance has been launched with a complete range of mortgage products to appeal to a wide range of borrowers.
The Chairman of Abu Dhabi Finance, Ali Eid Al Mehairi, said "The huge demand for real estate in Abu Dhabi implies that there would be greater demand for mortgage financing. Our team has been working towards creating attractive, innovative mortgage products to meet requirements of all types of homeowners."
Abu Dhabi Finance plan to offer mortgages with a range of benefits, including loan-to-value ratios of up to 85 percent, flexible payment methods, loan terms between three and thirty years, and debt service ratios of up to 55 percent.
The Chief Executive of Abu Dhabi Finance, Philip Ward, said "We are aiming to become the leading supplier of mortgage products. We have invested heavily in developing our products and in training our Mortgage Advisors, so that clients can rest assured about getting the right mortgage for them."
The Abu Dhabi Commercial Bank, Mubadala Development Company, Aldar, Tourism Development and Investment Company (TDIC) and Sorouh Real Estate PJSC are the shareholders of the new finance company, which will initially offer mortgages toThe companies are estimated to represent about more than two-thirds of the new units under-construction in Abu Dhabi.
buyers in the emirate.
With a capital of Dh.500million, the objective of the company is to help Abu Dhabi meet its long-term strategies of sustainable economic growth by financing the growing demand for real estate.
Following one year of planning, Abu Dhabi Finance has been launched with a complete range of mortgage products to appeal to a wide range of borrowers.
The Chairman of Abu Dhabi Finance, Ali Eid Al Mehairi, said "The huge demand for real estate in Abu Dhabi implies that there would be greater demand for mortgage financing. Our team has been working towards creating attractive, innovative mortgage products to meet requirements of all types of homeowners."
Abu Dhabi Finance plan to offer mortgages with a range of benefits, including loan-to-value ratios of up to 85 percent, flexible payment methods, loan terms between three and thirty years, and debt service ratios of up to 55 percent.
The Chief Executive of Abu Dhabi Finance, Philip Ward, said "We are aiming to become the leading supplier of mortgage products. We have invested heavily in developing our products and in training our Mortgage Advisors, so that clients can rest assured about getting the right mortgage for them."
Amlak, Tamweel merge to form new entity
Tuesday, November 25, 2008
Two leading real estate finance providers of UAE, Tamweel and Amlak Finance PJSC, would merge into a new entity under the umbrella of Real Estate Bank, the Ministry of Finance announced. The merger is hoped to create a strong unit likely to be a major boos to Dubai property finance market.
The merger would match international standards, following involvement of all financial and legal formalities, separate assessment and approval for integration between the companies.
The Chairman of Tamweel, Shaikh Khalid Bin Zayed Bin Saqr Al Nahyan, said that the merged unit would boost the confidence of investors in both financial and property sectors in the UAE.
Mohammed Alabbar, a member of ruling council of the Gulf emirate and Chairman of Emaar Properties, speaking about a four way tie-up between the two Dubai-based Islamic lenders, the Real Estate Bank and the Emirates Industrial Bank, said that the new entity would be called 'Emirates Development Bank'.
The new entity would be supported by capital and funding, Alabbar assured. According to the Finance Ministry, the merger is a major landmark development for the UAE financial market. It will form a new entity that serves as cornerstone of the real estate finance market, which has great fundamentals.
The merger would match international standards, following involvement of all financial and legal formalities, separate assessment and approval for integration between the companies.
The Chairman of Tamweel, Shaikh Khalid Bin Zayed Bin Saqr Al Nahyan, said that the merged unit would boost the confidence of investors in both financial and property sectors in the UAE.
Mohammed Alabbar, a member of ruling council of the Gulf emirate and Chairman of Emaar Properties, speaking about a four way tie-up between the two Dubai-based Islamic lenders, the Real Estate Bank and the Emirates Industrial Bank, said that the new entity would be called 'Emirates Development Bank'.
The new entity would be supported by capital and funding, Alabbar assured. According to the Finance Ministry, the merger is a major landmark development for the UAE financial market. It will form a new entity that serves as cornerstone of the real estate finance market, which has great fundamentals.
Labels: Mortgages, Real Estate News
Lower mortgage rates, property prices may bring in affordable properties
Thursday, November 06, 2008
Lower mortgage rates and stability in property prices are likely to bring in liquidity into the market, thereby making the properties more affordable, predict experts.
The Managing Director -Equity Research for Al Mal Capital, Robert McKinnon, who spoke to Emirates Business said that affordability being a major concern today, for the Dubai property market to get back in action, two solutions are possible -first being lowering of the lending rates, and second is to lower the property prices.
At present only about 20 percent of the population are able to afford a Dh.3million property. Property prices should decrease, if new people have to come forward and purchase properties. The ongoing financial crisis has brought about several international investors into the market, and with the tightening liquidity situation and the new regulations by RERA (Real Estate Regulatory Authority), it is crucial to retain the end-user interest in the market for achieving sustainable growth, said McKinnon.
In the opinion of McKinnon, Banks are already exposed to sufficient liquidity, and the government has been responsive enough to meet their requirements. If the property prices were lowered for a short-term, the lending institutions and banks would be more confident to lend higher loan-to-value.
The CEO of Mag Property Development Company, Mohammed Nimer, agrees that with the property sales slowing down in Dubai, the Government will have to protect the interest of developers, and bring about a balanced solution so as to not dampen the market.
The Managing Director -Equity Research for Al Mal Capital, Robert McKinnon, who spoke to Emirates Business said that affordability being a major concern today, for the Dubai property market to get back in action, two solutions are possible -first being lowering of the lending rates, and second is to lower the property prices.
At present only about 20 percent of the population are able to afford a Dh.3million property. Property prices should decrease, if new people have to come forward and purchase properties. The ongoing financial crisis has brought about several international investors into the market, and with the tightening liquidity situation and the new regulations by RERA (Real Estate Regulatory Authority), it is crucial to retain the end-user interest in the market for achieving sustainable growth, said McKinnon.
In the opinion of McKinnon, Banks are already exposed to sufficient liquidity, and the government has been responsive enough to meet their requirements. If the property prices were lowered for a short-term, the lending institutions and banks would be more confident to lend higher loan-to-value.
The CEO of Mag Property Development Company, Mohammed Nimer, agrees that with the property sales slowing down in Dubai, the Government will have to protect the interest of developers, and bring about a balanced solution so as to not dampen the market.
Labels: Mortgages, Property Prices
Rental properties in UAE witnessing massive demand
Thursday, September 18, 2008
Boasting 365 days of sunshine, population growth and reliable economic growth, apart from a booming tourism hub, the UAE is also witnessing massive demand for rental properties. This comes as a tempting package for prospective buyers, states a report in Gulf News.
The new property law which regulates the mortgage process, protecting the rights of borrowers and lenders, making considerable advancements in the home financing market of UAE, offers more choice to consumers than before.
The UAE market is rapidly developing, when compared to markets in places such as the US and the UK, with the central bank data revealing that the mortgage lending in the UAE jumped 55 percent in the year till March.
Another factor worth noting when talking about home ownership in the UAE is the huge demand for rentals in the residential sector. Even the business men who have relocated to the emirates are getting disposed towards purchasing homes in the UAE.
Mortgage lenders are agreeing to offer finance to both end-user and investment purchases, and this makes the prospect of buying-to-rent and second-home purchases even more attractive.
Some confident owner-occupiers who comprise 70 percent of the market are willing to take out finance against existing property to raise cash for secondary purchases which indicates the fair manner in which UAE market is being perceived.
Home financiers, led by Islamic organizations are enjoying a 60 percent slice of the market, and are facing tough competitions from foreign banks keen on getting a slice of the action.
International and local mortgage lenders are striving to make it easier than ever to borrow money for property purchase in the UAE and most mortgage providers can offer customers a list of lenders to choose from.
Flexible and varied home loans are available from various sources, and it is getting all the more easier, to finance commercial, off-plan and under-construction properties, given that the planned property is registered with Dubai Land Department as per the terms of new mortgage law.
Also, it is worth pointing out at this instance that UAE market is standing firm, when the markets elsewhere is witnessing the impact of global slowdown, with the dirham still being pegged to the dollar. This implies that although supply is surpassing demand, rates are sizeable, and the UAE central bank can be forced to track number of US interest rate cuts and home loan rates are lower than during the same period three years ago.
Recent reports state that property prices in Dubai have grown over 70 percent beginning 2007, and more than 20 percent since the beginning of this year. So currently, buyers in the UAE are not looking at two to three percent profit gain in a year, but, the margins expected have grown considerably high. With such profits, interest rates are a secondary consideration.
The new property law which regulates the mortgage process, protecting the rights of borrowers and lenders, making considerable advancements in the home financing market of UAE, offers more choice to consumers than before.
The UAE market is rapidly developing, when compared to markets in places such as the US and the UK, with the central bank data revealing that the mortgage lending in the UAE jumped 55 percent in the year till March.
Another factor worth noting when talking about home ownership in the UAE is the huge demand for rentals in the residential sector. Even the business men who have relocated to the emirates are getting disposed towards purchasing homes in the UAE.
Mortgage lenders are agreeing to offer finance to both end-user and investment purchases, and this makes the prospect of buying-to-rent and second-home purchases even more attractive.
Some confident owner-occupiers who comprise 70 percent of the market are willing to take out finance against existing property to raise cash for secondary purchases which indicates the fair manner in which UAE market is being perceived.
Home financiers, led by Islamic organizations are enjoying a 60 percent slice of the market, and are facing tough competitions from foreign banks keen on getting a slice of the action.
International and local mortgage lenders are striving to make it easier than ever to borrow money for property purchase in the UAE and most mortgage providers can offer customers a list of lenders to choose from.
Flexible and varied home loans are available from various sources, and it is getting all the more easier, to finance commercial, off-plan and under-construction properties, given that the planned property is registered with Dubai Land Department as per the terms of new mortgage law.
Also, it is worth pointing out at this instance that UAE market is standing firm, when the markets elsewhere is witnessing the impact of global slowdown, with the dirham still being pegged to the dollar. This implies that although supply is surpassing demand, rates are sizeable, and the UAE central bank can be forced to track number of US interest rate cuts and home loan rates are lower than during the same period three years ago.
Recent reports state that property prices in Dubai have grown over 70 percent beginning 2007, and more than 20 percent since the beginning of this year. So currently, buyers in the UAE are not looking at two to three percent profit gain in a year, but, the margins expected have grown considerably high. With such profits, interest rates are a secondary consideration.
Labels: Market Trends, Mortgages, Rentals, UAE
Global credit crunch prompts property developers to consider Islamic financial instruments
With global credit crisis being noticed everywhere in the tough financial world, several property developers in the GCC are turning to Islamic financial instruments for getting a good start for their projects.
According to Swati Taneja, Conference Director of International Islamic Finance Forum, financing carried out as per Islamic rules emphasizes that gains should be derived from ethical, shared investment, rather being interest-based, and hence, this has sidestepped the credit crunch.
The International Islamic Forum, usually held twice a year, will be conducted in Istanbul from 13th to 17th October this year.
The slowdown in the international property market has hit conventional property firms, as investors have begun to scale back their exposure, particularly in highly leveraged markets,Swati said.
There are several instances of emerging developers worldwide adopting the Islamic model to finance their projects. The most recent among these is the biggest property developer of South East Asia, based in Singapore, which is expected to issue $700mn Islamic bond towards end of this year, as the first portion of investment, targeting the Middle East investors.
Taneja pointed out that there are only few competitive sources of finance available in the conventional financial world right now, but, there are several billions of dollars in the Islamic financial sector of the Middle East, seeking investments. However, unless developers plan their projects to be Shariah compliant, they will remain unnoticed.
In recognition of the high competitive alternative offered currently by Islamic finance to the conventional interest-based structures, the forum this year focuses on a special workshop about Islamic real estate deals.
The workshop will offer better understanding of Islamic finance and structures required for real estate development, and will examine the foundation of Islamic finance, and its applicability for real estate transactions.
The forum will identify new markets for Islamic finance and examine Sukuk structures and capital markets, Islamic jurisprudence, emerging Takaful development, alternative asset classes including private equity and real estate, and sustainability with greening of Islamic finance.
According to Swati Taneja, Conference Director of International Islamic Finance Forum, financing carried out as per Islamic rules emphasizes that gains should be derived from ethical, shared investment, rather being interest-based, and hence, this has sidestepped the credit crunch.
The International Islamic Forum, usually held twice a year, will be conducted in Istanbul from 13th to 17th October this year.
The slowdown in the international property market has hit conventional property firms, as investors have begun to scale back their exposure, particularly in highly leveraged markets,Swati said.
There are several instances of emerging developers worldwide adopting the Islamic model to finance their projects. The most recent among these is the biggest property developer of South East Asia, based in Singapore, which is expected to issue $700mn Islamic bond towards end of this year, as the first portion of investment, targeting the Middle East investors.
Taneja pointed out that there are only few competitive sources of finance available in the conventional financial world right now, but, there are several billions of dollars in the Islamic financial sector of the Middle East, seeking investments. However, unless developers plan their projects to be Shariah compliant, they will remain unnoticed.
In recognition of the high competitive alternative offered currently by Islamic finance to the conventional interest-based structures, the forum this year focuses on a special workshop about Islamic real estate deals.
The workshop will offer better understanding of Islamic finance and structures required for real estate development, and will examine the foundation of Islamic finance, and its applicability for real estate transactions.
The forum will identify new markets for Islamic finance and examine Sukuk structures and capital markets, Islamic jurisprudence, emerging Takaful development, alternative asset classes including private equity and real estate, and sustainability with greening of Islamic finance.
Labels: Dubai Real Estate, Mortgages, Real Estate News
Banks overexposed to expanding Gulf property markets: HSBC
Saturday, September 06, 2008
Being exposed to the overheated property market in the Gulf, the Banks such as the First Gulf in Abu Dhabi are in a vulnerable position, where funding conditions for financial firms are likely to deteriorate HSBC stated.
HSBC has reduced price targets on several major banks in the emirate, stating the financial sector would remain challenged by the lack of economic diversification in the country.
HSBC, in its note to the clients, stated that the high concentration of real estate and construction loans in the portfolio of banks is a matter of concern, although it is not an immediate threat.
Banks such as the First Gulf and National Bank of Abu Dhabi are the most exposed to any downturn in the property market.
HSBC has reduced its investor recommendation on First Gulf to neutral from overweight, with a price target of Dh.24.5, while also lowering its price target on National Bank of Abu Dhabi to Dh.19.9 from Dh.22.5.
Banks in the Gulf have considerably weakened during the recent weeks, based on the bourses in the region, on concern that a rapid expansion in the realty market, to which the Banks are exposed, may have gone too far.
For instance, the Abu Dhabi Commercial Bank has shed 24 percent this year so far, while the First Gulf Bank has gained about 10 percent. There is overheating in the real estate market in the region, but we do not notice any immediate threat to asset quality, the note stated.
HSBC has also lowered its price target on Union National Bank to Dh.11.0 from Dh.11.9, and from Dh.7.8 to Dh.6.4 on Abu Dhabi Commercial Bank.
HSBC has reduced price targets on several major banks in the emirate, stating the financial sector would remain challenged by the lack of economic diversification in the country.
HSBC, in its note to the clients, stated that the high concentration of real estate and construction loans in the portfolio of banks is a matter of concern, although it is not an immediate threat.
Banks such as the First Gulf and National Bank of Abu Dhabi are the most exposed to any downturn in the property market.
HSBC has reduced its investor recommendation on First Gulf to neutral from overweight, with a price target of Dh.24.5, while also lowering its price target on National Bank of Abu Dhabi to Dh.19.9 from Dh.22.5.
Banks in the Gulf have considerably weakened during the recent weeks, based on the bourses in the region, on concern that a rapid expansion in the realty market, to which the Banks are exposed, may have gone too far.
For instance, the Abu Dhabi Commercial Bank has shed 24 percent this year so far, while the First Gulf Bank has gained about 10 percent. There is overheating in the real estate market in the region, but we do not notice any immediate threat to asset quality, the note stated.
HSBC has also lowered its price target on Union National Bank to Dh.11.0 from Dh.11.9, and from Dh.7.8 to Dh.6.4 on Abu Dhabi Commercial Bank.
Labels: Middle-East, Mortgages
New mortgage law in Dubai
Thursday, August 21, 2008
Dubai has issued a new mortgage law, so as to regulate the booming property sector of th emirate, announced RERA (Real Estate Regulatory Authority).As per 35-article decree, issued by Sheikh Mohammed bin Rashid Al-Maktoum, the Vice-President of UAE and Ruler of Dubai, the new law regulates the mortgage process so as to protect the rights of borrowers and lenders, while also enhancing transparency.
The law is effective, after 60 days of its publication in the official gazette. The law states that mortgage contracts can be registered with the land department, on specifying the size of loan, the repayment period, and the value of property to which the loan is linked.
The new law basically covers the mortgage procedures in Dubai. All property purchases happening offplan, for instance, and all the financing must be registered with the land department, said Marwan Ahmed bin Ghalita, the Chief of RERA.
The mortgages on properties in Dubai, should henceforth be sold by registered financial institutions and be insured.
The borrower and lender will have to present complete financial documents during the registration of the mortgage.
The government has granted exemption on properties given to nationals by the government. This gives better confidence to the lender, and more security for banks. Ghalita revealed that land department and banks are currently working out mortgage rates independently from central banks.
Being home to flamboyant developments such as palm-shaped islands, the tax-free Dubai began the Gulf property boom in 2002, by welcoming foreigners to invest in Dubai properties. The nascent mortgage business in Dubai has been growing ever-since, with home loans increasing by 55 percent in the year to March.
According to a statement from Morgan Stanley, the property prices in Dubai, have surged 79 percent since 2007, although a 10 percent decline in prices is expected by 2010.
The announcement of this new mortgage regulation coincides with the crackdown by Dubai government on corruption, with major executives in realty and financial firms facing investigations.
Labels: Dubai Real Estate, Latest News, Mortgages
UAE mortgage market set for a boom
Thursday, July 17, 2008
The construction boom in UAE has resulted in major surge in its mortgage market, with investors being able to take advantage of various new incentives on the offer to purchase real estate.
According to a new survey, the mortgage market in UAE is currently worth Dh.20bn, and is likely to triple to Dh.64bn during the next three years.
Mortgage advisors are of the opinion that Investors are increasingly relying on mortgages to purchase property, with more than 71 percent of UAE investors requiring mortgage to finance their property purchase. This indicates that there exists considerable demand within local market, which shows no sign of slowing down.
This huge demand could be triggered by various factors, such as, increasingly maturing local mortgage market, with both seasoned and first-time investors taking advantage of attractive mortgage incentives to purchase real estate.
Increasing prices of properties are influencing the investments of property buyers, and low interest rates are continuing to fuel the demand. These offers, together with the introduction of new laws, pertaining to property ownership has enabled the UAE mortgage market to truly thrive.
Earlier, the investors had to either utilize their own funds or release equity on other properties in their home country, due to limited availability of local finance. However, the landscape of UAE mortgage market has seen a tremendous change with several new lenders, including the financial institutions and banks, entering the market to take advantage of the rising demand and work with a wide range of developers.
The survey report states that the UAE mortgage market is getting more complex, with mortgage approvals being one of the major reasons behind delays in purchase of projects by investors. Hence, despite several mortgage options being available to property buyers, obtaining mortgage can still be a major responsibility. A good mortgage broker, apart from identifying the best deal, will also have to facilitate the entire process. The property buyers watch for reputation of the lender, the pace at which the mortgage can be processed and other factors, apart from rate alone. The survey states that speed is everything in UAE property market.
The Survey was carried out last year by John Charcoal Dubai, an independent mortgage franchise operation. The Company works in close co-operation with leading financial institutions, real estate agents, and property developers to bring in speed and transparency to property buying process in the UAE.
According to a new survey, the mortgage market in UAE is currently worth Dh.20bn, and is likely to triple to Dh.64bn during the next three years.
Mortgage advisors are of the opinion that Investors are increasingly relying on mortgages to purchase property, with more than 71 percent of UAE investors requiring mortgage to finance their property purchase. This indicates that there exists considerable demand within local market, which shows no sign of slowing down.
This huge demand could be triggered by various factors, such as, increasingly maturing local mortgage market, with both seasoned and first-time investors taking advantage of attractive mortgage incentives to purchase real estate.
Increasing prices of properties are influencing the investments of property buyers, and low interest rates are continuing to fuel the demand. These offers, together with the introduction of new laws, pertaining to property ownership has enabled the UAE mortgage market to truly thrive.
Earlier, the investors had to either utilize their own funds or release equity on other properties in their home country, due to limited availability of local finance. However, the landscape of UAE mortgage market has seen a tremendous change with several new lenders, including the financial institutions and banks, entering the market to take advantage of the rising demand and work with a wide range of developers.
The survey report states that the UAE mortgage market is getting more complex, with mortgage approvals being one of the major reasons behind delays in purchase of projects by investors. Hence, despite several mortgage options being available to property buyers, obtaining mortgage can still be a major responsibility. A good mortgage broker, apart from identifying the best deal, will also have to facilitate the entire process. The property buyers watch for reputation of the lender, the pace at which the mortgage can be processed and other factors, apart from rate alone. The survey states that speed is everything in UAE property market.
The Survey was carried out last year by John Charcoal Dubai, an independent mortgage franchise operation. The Company works in close co-operation with leading financial institutions, real estate agents, and property developers to bring in speed and transparency to property buying process in the UAE.
Labels: Latest News, Mortgages, UAE
Fortune Group partners with Badr Al Islami for easy mortgage solutions
Wednesday, April 30, 2008
The Dubai based property developer, Fortune Group, has entered into a partnership with Badr Al Islami, a Shariah-compliant arm of Mashreq, will offer Shariah-compliant mortgage solutions to property buyers for their residential and commercial projects.
Badr Al Islami will offer mortgage solutions for Fortune Serene, Fortune Avenue and Fortune Bay, worth more than $272million in value. It will also manage Trust Accounts for all the three projects.
Fortune Serene is a residential project in International Media Production Zone, while Fortune Bay and Fortune Avenue offers commercial space in Business Bay.
As per the agreement, Badr Al Islami will structure finance options depending on investor requirements for each project. It will provide easy finance solutions of up to 80 percent of project value. Buyers can avail maximum of $3.3mn in residential and commercial property mortgage.
Badr Al Islami will offer mortgage solutions for Fortune Serene, Fortune Avenue and Fortune Bay, worth more than $272million in value. It will also manage Trust Accounts for all the three projects.
Fortune Serene is a residential project in International Media Production Zone, while Fortune Bay and Fortune Avenue offers commercial space in Business Bay.
As per the agreement, Badr Al Islami will structure finance options depending on investor requirements for each project. It will provide easy finance solutions of up to 80 percent of project value. Buyers can avail maximum of $3.3mn in residential and commercial property mortgage.
UAE mortgage market to witness a major leap
Thursday, April 10, 2008
The mortgage market in UAE will witness a major leap from Dh.20bn to Dh.64bn towards end of this year, over a span of next three years, with more than 60 percent of home finance getting Sharia-compliant, revealed the officials.
Sabahuddin Azmi, Specialist in Islamic banking and finance, revealed that UAE housing market had an outstanding credit of Dh.17billion towards end of 2006, and is now expected to touch Dh.20bn towards end of 2008. This may rise even further by 2011, with a surge in real estate activities, touching Dh.419bn during this period.
Azmi said that Amlak Finance and Tamweel, both Sharaia-compliant companies are dominating the UAE housing finance market at present, with 35 percent and 25 percent shares respectively.
Azmi was speaking during the concluding day of the two-day summit, involving international panel of thirteen financial experts, who were discussing the differences between Western family wealth management policies and Islamic Sharia-compliant principles.
The summit was held under the patronage of Shaikh Saud Bin Saqr Al Qasimi, the Crown Prince and Deputy Ruler of Ras Al Khaimah.
Sabahuddin Azmi, Specialist in Islamic banking and finance, revealed that UAE housing market had an outstanding credit of Dh.17billion towards end of 2006, and is now expected to touch Dh.20bn towards end of 2008. This may rise even further by 2011, with a surge in real estate activities, touching Dh.419bn during this period.
Azmi said that Amlak Finance and Tamweel, both Sharaia-compliant companies are dominating the UAE housing finance market at present, with 35 percent and 25 percent shares respectively.
Azmi was speaking during the concluding day of the two-day summit, involving international panel of thirteen financial experts, who were discussing the differences between Western family wealth management policies and Islamic Sharia-compliant principles.
The summit was held under the patronage of Shaikh Saud Bin Saqr Al Qasimi, the Crown Prince and Deputy Ruler of Ras Al Khaimah.
Amlak's investment portfolio exceeds Dh.4.5bn
Wednesday, February 06, 2008
One of the leading home financiers in Dubai, Amlak Finance, revealed that its real estate investment portfolio has grown by more than Dh.4.5bn, following the six million square feet of land acquisition from the Dubai Government.
This newly acquired land, with a gross floor area of 8.5million square feet, is located at Al Warqa on the Emirates Road, and will be developed as a multi-purpose development, which would further strengthen Amlak's position as the lead real estate finance and investment company.
The new community in Al Warqa, namely Warqa Heights will have the capacity to house 40,000 people and comprise commercial, residential and retail space. The master-plan is currently finalzed by Tamdeen and Amlak, and the plots will be handed over to developers and investors later in the year.
Amlak focuses on acquiring various mixed-use properties, both commercial and residential. Amlak had announced a net profit of 758% this year, towards end of last year. Amlak currently has its operations in Saudi Arabia, Egypt, Jordan, Qatar, and is considering moving into Bahrain.
This newly acquired land, with a gross floor area of 8.5million square feet, is located at Al Warqa on the Emirates Road, and will be developed as a multi-purpose development, which would further strengthen Amlak's position as the lead real estate finance and investment company.The new community in Al Warqa, namely Warqa Heights will have the capacity to house 40,000 people and comprise commercial, residential and retail space. The master-plan is currently finalzed by Tamdeen and Amlak, and the plots will be handed over to developers and investors later in the year.
Amlak focuses on acquiring various mixed-use properties, both commercial and residential. Amlak had announced a net profit of 758% this year, towards end of last year. Amlak currently has its operations in Saudi Arabia, Egypt, Jordan, Qatar, and is considering moving into Bahrain.
Labels: Mortgages, Real Estate News
DLD approves First Gulf Bank to open and manage Escrow Accounts
Tuesday, January 29, 2008
The Dubai Land Department (DLD) has granted permission to the First Gulf Bank to open Escrow Accounts for the registered property developers of the department. The DLD is the 'only' real estate title registry in the emirate to approve the Bank to open and manage Escrow Accounts.
The Escrow Accounts that are operated by the First Gulf Bank will be regulated by RERA (Real Estate Regulatory Authority) which currently licenses about 400 developers in the Dubai market, and is the authority behind implementing the new escrow account law.
The Head of National Housing Loans, at the First Gulf Bank, Al Ghafli, said "The new RERA rules are a major step ahead in the maturing Dubai market. These rules protect the interest of both developers and buyers, while the investors feel secure that their funds are safely deposited by a reputable financial institution, like the First Gulf Bank."
First Gulf Bank has a good reputation in the real estate segment within UAE, offering a range of financial solutions to investors and developers alike. The Escrow Account Law was issued by the Dubai Government last year, aiming to control the malpractices by property developers, and enhance the standard of the Dubai real estate market.
The Escrow Accounts that are operated by the First Gulf Bank will be regulated by RERA (Real Estate Regulatory Authority) which currently licenses about 400 developers in the Dubai market, and is the authority behind implementing the new escrow account law.
The Head of National Housing Loans, at the First Gulf Bank, Al Ghafli, said "The new RERA rules are a major step ahead in the maturing Dubai market. These rules protect the interest of both developers and buyers, while the investors feel secure that their funds are safely deposited by a reputable financial institution, like the First Gulf Bank."
First Gulf Bank has a good reputation in the real estate segment within UAE, offering a range of financial solutions to investors and developers alike. The Escrow Account Law was issued by the Dubai Government last year, aiming to control the malpractices by property developers, and enhance the standard of the Dubai real estate market.
Labels: Dubai Real Estate, Mortgages, Property Law
Bavaria launches Sandoval Apartments; signs loan agreement with Mashreq
Tuesday, December 25, 2007
The German boutique developer, Bavaria Gulf, has announced the launch of first phase of 'Sandoval Apartments' at Jumeirah Village, which had earlier made its grand entry into Dubai realty sector through the launch of 'Sandoval Townhouses'.
The project will consist of 165 mid-range apartments with high-quality German precision, certified by TUeV, the most stringent and independent quality evaluators in the world. With seven G+4 buildings, Sandoval Apartments will include 57 studio apartments, 17 two bedroom apartments, 81 single bedroom units, and 10 special duplex apartments. These apartments, which range from 680 to 2700 Square feet, will be sold at a high value driven prick bracket.
The Managing Director of Bavaria, Raymond Lefevre, said "Our previous launch of Sandoval Townhouses, proved to be a real eye opener for us. Now, Sandoval Apartments follows suit, offering high-quality, yet, luxurious, functional and value-driven realty concepts."
Bavaria is also one of the first mid-segment realty developers in Dubai, to sign home loan agreement for all its future and existing projects with Mashreq, one of the largest private banks in the Middle East. The customers of Mashreq will benefit from customized home loan packages, apart from enjoying upto 90% on sales price for all existing and future Bavaria Gulf projects, with attractive interest rates for the next 25 years.
Mashreq will offer Bavaria customers with a variety of convenient financing options and attractive rates, apart from other benefits such as the lowest down payments, apart from providing them with the benefit of owning the property of their dreams.
The project will consist of 165 mid-range apartments with high-quality German precision, certified by TUeV, the most stringent and independent quality evaluators in the world. With seven G+4 buildings, Sandoval Apartments will include 57 studio apartments, 17 two bedroom apartments, 81 single bedroom units, and 10 special duplex apartments. These apartments, which range from 680 to 2700 Square feet, will be sold at a high value driven prick bracket.
The Managing Director of Bavaria, Raymond Lefevre, said "Our previous launch of Sandoval Townhouses, proved to be a real eye opener for us. Now, Sandoval Apartments follows suit, offering high-quality, yet, luxurious, functional and value-driven realty concepts."
Bavaria is also one of the first mid-segment realty developers in Dubai, to sign home loan agreement for all its future and existing projects with Mashreq, one of the largest private banks in the Middle East. The customers of Mashreq will benefit from customized home loan packages, apart from enjoying upto 90% on sales price for all existing and future Bavaria Gulf projects, with attractive interest rates for the next 25 years.
Mashreq will offer Bavaria customers with a variety of convenient financing options and attractive rates, apart from other benefits such as the lowest down payments, apart from providing them with the benefit of owning the property of their dreams.
Labels: Apartments, Mortgages, New Developments
Dubai property prices unlikely to stabilize in next few years
Sunday, December 09, 2007
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.
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
Mawarid Finance offers financing for The Centrium purchasers
Mawarid Finance, a Dubai-based public joint stock company, specializing in Islamic Finance, have entered into a partnership agreement with ETA Star, for providing finance to purchasers of units in 'The Centrium' at International Media Production Zone (IMPZ) in Dubai. Potential buyers can get up to 95% finance, and will have to pay installments after moving into their apartments.
The 'Centrium' in Dubai, comprises of four towers, interlinked to each other by bridges and with common facilities in a spacious garden setting. The apartments are available in configurations of single, double and triple bedroom apartments with latest hi-tech amenities.
The Chief Executive of Mawarid Finance, Mohammed Al Neaimi, said that the financing of the 'Centrium' units is based on Ijara principle, with an undertaking to transfer title on fulfillment of buyer's contractual commitments.
Labels: Apartments, Mortgages
KM Properties signs deal with Amlak Finance
Thursday, November 15, 2007
KM Properties has entered into a deal with Amlak Finance, to provide its investors and home owner's the option of offering mortgages for 85% of their properties.
KM Properties had earlier entered into financing deals with National Bank of Dubai (NBD). The finance options are now made available for the new launch by KM Properties, the TAMANI Arts Offices development at Business Bay in Dubai.
TAMANI Arts Offices is an iconic mixed-use development complex in Business Bay, comprising 20 storey tower near Burj Dubai, with 32% of tower's units sold at the show.
Another recent launch by KM Properties, the Artisan Cluster in Business Bay, worth Dh.1.3bn, announced during the Cityscape Dubai 2007 exhibition, has earned 111% capital gain.
The Executive Director and Co-Founder of KM Properties, Khulood Abdulla Al Rostamani, has announced that the company is offering further incentives to those investors who reserve units during the first phase of public sale, and these incentives will be compounded by the company's easy financing options, provided by NBD and Amlak.
KM Properties had earlier entered into financing deals with National Bank of Dubai (NBD). The finance options are now made available for the new launch by KM Properties, the TAMANI Arts Offices development at Business Bay in Dubai.TAMANI Arts Offices is an iconic mixed-use development complex in Business Bay, comprising 20 storey tower near Burj Dubai, with 32% of tower's units sold at the show.
Another recent launch by KM Properties, the Artisan Cluster in Business Bay, worth Dh.1.3bn, announced during the Cityscape Dubai 2007 exhibition, has earned 111% capital gain.
The Executive Director and Co-Founder of KM Properties, Khulood Abdulla Al Rostamani, has announced that the company is offering further incentives to those investors who reserve units during the first phase of public sale, and these incentives will be compounded by the company's easy financing options, provided by NBD and Amlak.
Labels: Mortgages, Real Estate News
City of Arabia developer arranges finance options
Wednesday, November 14, 2007
The Ilyas & Mustafa Galadari Group, the developers of a landmark residential and commercial development City of Arabia, in Dubailand, have entered into a deal with Dubai Islamic Bank (DIB) for financing options for their City of Arabia project.
The Chairman of the Group, Ilyas Galadari, said that the MOU is an important step forward in realizing their desire to provide Islamic financing to investors in City of Arabia. With a range of properties ranging from the Wadi Walk residential apartments to the Mall of Arabia, investors get an easy access to a wide range of financial options.
The Senior Vice President of Retail and Business Banking Services, DIB, Mohammad Ameery, expressing his excitement regarding the deal, mentioned that the City of Arabia developed by the group includes houses that are unique and modern in the UAE.
As per the MOU, the Dubai Sports City and DIB will exchange information pertaining to the property market, and other relevant information, that contributes in developing the country's property sector. The signing of the MOU is coincidental with the DIB's vision in meeting the customer requirements who wish to acquire properties in City of Arabia.
The Chairman of the Group, Ilyas Galadari, said that the MOU is an important step forward in realizing their desire to provide Islamic financing to investors in City of Arabia. With a range of properties ranging from the Wadi Walk residential apartments to the Mall of Arabia, investors get an easy access to a wide range of financial options.
The Senior Vice President of Retail and Business Banking Services, DIB, Mohammad Ameery, expressing his excitement regarding the deal, mentioned that the City of Arabia developed by the group includes houses that are unique and modern in the UAE.
As per the MOU, the Dubai Sports City and DIB will exchange information pertaining to the property market, and other relevant information, that contributes in developing the country's property sector. The signing of the MOU is coincidental with the DIB's vision in meeting the customer requirements who wish to acquire properties in City of Arabia.
Labels: City-of-Arabia, Mortgages, Real Estate Company
ETA ties-up with eleven major Banks for home loan options
Monday, October 01, 2007
ETA Star, a leading property developer in UAE, has tied-up with eleven major banks in the region for providing home loan option to its customers.
ETA Star can now offer its customers easier and wider accessibility of home loans for all their projects. "Our aim has been to provide the customer with best in services, that live up to the expectation and trust they pose on us,” said Abid Junaid, Executive Director, ETA Star.
The Managing Director of Barclays Bank, Amin Habib expressing his happiness over the partnership, mentioned "We are certain that Barclays services will add value to ETA customers. We plan to offer the best financial solutions to customers, and are confident that our loans to ETA's home buyers will do just that."
ETA Star is currently developing millions of square feet of premium property in major countries in South-East Asia and the Middle East, including UAE, Turkey, Qatar, India and Sri Lanka.
The Partnership agreements are signed with Arab Bank, Abu Dhabi Commercial bank (ADCB), Dubai Bank, Badr Al-Islami, Mashreq, First Gulf Bank, Tamweel, Union National Bank, National Bank of Dubai, Barclays and Finance House.
ETA Star can now offer its customers easier and wider accessibility of home loans for all their projects. "Our aim has been to provide the customer with best in services, that live up to the expectation and trust they pose on us,” said Abid Junaid, Executive Director, ETA Star.
The Managing Director of Barclays Bank, Amin Habib expressing his happiness over the partnership, mentioned "We are certain that Barclays services will add value to ETA customers. We plan to offer the best financial solutions to customers, and are confident that our loans to ETA's home buyers will do just that."
ETA Star is currently developing millions of square feet of premium property in major countries in South-East Asia and the Middle East, including UAE, Turkey, Qatar, India and Sri Lanka.
Labels: ETA-Star, Mortgages, Real Estate Company
Standard Chartered and Land Department enters into Escrow deal
Thursday, September 27, 2007
Standard Chartered, the leading international bank in UAE has announced their entry into an Escrow Account Agreement with Dubai Land Department (DLD).
Through this agreement, Standard Chartered will be formally authorized as an approved bank for opening and managing Escrow accounts of property developers registered with DLD.
This makes Standard Chartered as one among the other few banks in UAE to provide both Islamic Banking Escrow Accounts and Conventional Accounts, thereby giving a wider choice for potential property investors.
The signing ceremony at the DLD office, involved the participation of Sultan Butti bin Mirjin, the Director General of DLD, Nigel Jones, the CEO of Standard Chartered-UAE, and Sultan al Suwaidi, Chief Advisor of Standard Chartered-UAE.
Mirjin said "The Dubai Land Department has adopted a practical approach for development of existing legislation in the real estate sector of the emirate to ensure the safety of investors and to boost their confidence levels in this sector."
The agreement is inline with the new Law Number 8 of 2007, which was issued by Shaikh Mohammad bin Rashid Al Maktoum, the Vice President and Prime Minister of UAE and Ruler of Dubai, and helps in safeguarding any party who goes on to sell a unit from a property development plan, before the actual completion of the project or during the construction phase. Such payments should be placed in an authorized Escrow agent accounts until the completion and delivery of the development.
Jones mentioned that recently Standard Chartered launched the first dedicated mortgage center in UAE in the Emaar Business Park, which revealed its commitment towards the property sector in UAE. This agreement further emphasizes the involvement of the Bank with the property sector, while highlighting the support that the Bank extends to the initiatives backed by government in UAE.
Through this agreement, Standard Chartered will be formally authorized as an approved bank for opening and managing Escrow accounts of property developers registered with DLD.This makes Standard Chartered as one among the other few banks in UAE to provide both Islamic Banking Escrow Accounts and Conventional Accounts, thereby giving a wider choice for potential property investors.
The signing ceremony at the DLD office, involved the participation of Sultan Butti bin Mirjin, the Director General of DLD, Nigel Jones, the CEO of Standard Chartered-UAE, and Sultan al Suwaidi, Chief Advisor of Standard Chartered-UAE.
Mirjin said "The Dubai Land Department has adopted a practical approach for development of existing legislation in the real estate sector of the emirate to ensure the safety of investors and to boost their confidence levels in this sector."
The agreement is inline with the new Law Number 8 of 2007, which was issued by Shaikh Mohammad bin Rashid Al Maktoum, the Vice President and Prime Minister of UAE and Ruler of Dubai, and helps in safeguarding any party who goes on to sell a unit from a property development plan, before the actual completion of the project or during the construction phase. Such payments should be placed in an authorized Escrow agent accounts until the completion and delivery of the development.
Jones mentioned that recently Standard Chartered launched the first dedicated mortgage center in UAE in the Emaar Business Park, which revealed its commitment towards the property sector in UAE. This agreement further emphasizes the involvement of the Bank with the property sector, while highlighting the support that the Bank extends to the initiatives backed by government in UAE.
Labels: Dubai Real Estate, Mortgages, Property Law, Real Estate News
DWTC signs Dh.800m loan facility with NBD to fund DWTC developments
Friday, September 21, 2007
The Dubai World Trade Center (DWTC) and the National Bank of Dubai (NBD) has entered into a Dh.800 million short-term loan facility to fund the development plans of DWTC.
This deal will help in financing major real estate projects of DWTC, namely the Dubai Exhibition City and the Dubai Trade Center District, which are being constructed parallely.
The Dubai Trade Center District, located at the heart of Dubai, is a mixed-use development, intended to bring about a new business zone. The Phase one of the project, which is still under construction, will cover 2.3million square feet of grade one office space, along with executive serviced apartments, and various three, four and five star hotels, and a range of retails and dining options.
Another mega project of DWTC, the Dubai Exhibition City will be the first ever integrated event city, which will stand up to the exact requirements of exhibitors, visitors, organizers and delegates from across the globe.
Located adjacent to the Jebel Ali Airport, and spread across a seven square kilometer site, it is in line with the Dubai Strategy 2015 and ensures that Dubai is the world's leading conference and exhibition destination.
The NBD's Statement revealed that the NBD Offset Home Loans, a mortgage loan associated with high interest yielding current account, represents a milestone achievement in product innovation, and sets new standards in customer benefits apart from the leading features of the successful NBD Home Loans product.
The mortgage balance will be offset by the credit balance in the current account, which is one of the major features of the loans, saving the customer interest and facilitating faster loan repayment without being subjected to early repayment charges.
Labels: Dubai City, Dubai Real Estate, Mortgages, Office Space, Real Estate News, Real Estate Projects
Dubai World Central joins hands with Amlak Finance
Saturday, September 15, 2007
The Dubai World Central (DWC), the major urban aviation community under construction in Jebel Ali, covering an area of 140 square kilometers, has entered into an MOU with Amlak Finance PJSC, the largest real estate financier offering Sharia'a solutions in UAE, to finalize the financing agreement of DWC customers. The agreement will cover the cost of real estate sales of all three major components, namely the DWC Commercial City, DWC Golf City and DWC Residential City.
The CEO-Real Estate of Dubai World Central, Khalid bin Harib, says "Being a project that accounts for development concerns over the next fifty years, we plan to put together a prospective plan which ensures the customers about a finance option being provided, even before the commencement of sales during 2009. The MOU will cover all possible financing options within Amlak’s Islamic financing range, and the first of such agreements to ever happen in the next decade. "
"With a diverse portfolio of villas, plots and apartments on sale, the MOU will look at the best possible alternatives for future investors taking into consideration the huge real estate boom in the region."
DWC, with an infrastructure cost of $33 billion, comprises six real estate clustered zones, namely the Dubai Logistics City (DLC), DWC Commercial City, DWC International Airport (JXB), DWC Aviation City, DWC Residential City and DWC Golf City.
DWC has been endorsed by the Government of Dubai, and is Chaired by H.H. Shekh Ahmed bin Saeed Al Maktoum, the Chairman of Dubai World Central and Dubai Aviation Corporation, Government of Dubai.
The CEO-Real Estate of Dubai World Central, Khalid bin Harib, says "Being a project that accounts for development concerns over the next fifty years, we plan to put together a prospective plan which ensures the customers about a finance option being provided, even before the commencement of sales during 2009. The MOU will cover all possible financing options within Amlak’s Islamic financing range, and the first of such agreements to ever happen in the next decade. "
"With a diverse portfolio of villas, plots and apartments on sale, the MOU will look at the best possible alternatives for future investors taking into consideration the huge real estate boom in the region."
DWC, with an infrastructure cost of $33 billion, comprises six real estate clustered zones, namely the Dubai Logistics City (DLC), DWC Commercial City, DWC International Airport (JXB), DWC Aviation City, DWC Residential City and DWC Golf City.
DWC has been endorsed by the Government of Dubai, and is Chaired by H.H. Shekh Ahmed bin Saeed Al Maktoum, the Chairman of Dubai World Central and Dubai Aviation Corporation, Government of Dubai.
Labels: Dubai Real Estate, Dubai-Commercial-City, Dubai-Golf-City, Dubai-Residential-City, Mortgages, Real Estate Company
Tanmiyat-Tamweel tie-up for 'Living Legends' project
Friday, September 07, 2007
Leading Saudi-based property developer, the Tanmiyat Group, and the leading UAE-based property financier, Tamweel, have entered into a mortgage deal in Dubai for the 'Living Legends' project by Tanmiyat in Dubailand.
"Tanmiyat is proud to be joining hands with Tamweel, as a strategic business development partner for the upcoming real estate development projects in the region. With its offices in Dubai, Riyadh, and Istanbul, Tanmiyat is in the process of developing major property projects in Saudi, UAE and Turkey," said Sheikh Sulyman Bin Abdul Aziz Al Majed, the Chairman of Tanmiyat Group.
Living Legends is the residential area of the Legends project, and comprises 500 villas and 12 residential towers based on Arabian theme. The villas are located surrounding the golf course out of which, 50 are five-bedroom deluxe apartments, 200 four-bedrooms, 150 five-bedroom villas, and the towers comprises 1800 units on the whole, including, two, three, four bedroom apartments and penthouses, located amidst the villas and entertainment and shopping area.
"Tanmiyat is proud to be joining hands with Tamweel, as a strategic business development partner for the upcoming real estate development projects in the region. With its offices in Dubai, Riyadh, and Istanbul, Tanmiyat is in the process of developing major property projects in Saudi, UAE and Turkey," said Sheikh Sulyman Bin Abdul Aziz Al Majed, the Chairman of Tanmiyat Group.
Living Legends is the residential area of the Legends project, and comprises 500 villas and 12 residential towers based on Arabian theme. The villas are located surrounding the golf course out of which, 50 are five-bedroom deluxe apartments, 200 four-bedrooms, 150 five-bedroom villas, and the towers comprises 1800 units on the whole, including, two, three, four bedroom apartments and penthouses, located amidst the villas and entertainment and shopping area.
Labels: Dubailand, Latest News, Mortgages, Real Estate Company, Residential
Amlak Finance and Tamweel signs deal to function as escrow agents
Friday, August 31, 2007
Amlak and Tamweel, the two mortgage lenders in Dubai, have entered into deals with the Land Department to become escrow account agents.
Amlak Finance has been assigned to launch trust account services from the Dubai Land Department. Apart from this, Amlak will also enhance the financial flexibility of the end-user and provide unit sales services, sales monitoring, construction finance, legal documentation and customer service to major developers.
Tamweel has been assigned the task of an official escrow account agent by the Land Department, and this is for the first time that a mortgage provider has got this designation.
Tamweel said that it plans to convert the current projects of seventy five real estate developers into an authorized escrow structure.
The Director General of the Land Department, Sultan Butti Bin Mejren said "The Dubai Land Department plans to promote regulations that will contribute to the development of the property market in the emirate. The agreement between Amlak finance and the department ensures the users with ultimate protection."
The CEO of RERA (Real Estate Regulatory Agency), Marwan Bin Ghalita has commented that with the approval of a trust manager for the leading institutes in the market, one can rest assured that the Dubai property market will grow to provide deep rooted confidence and security to all its investors.
Amlak Finance has been assigned to launch trust account services from the Dubai Land Department. Apart from this, Amlak will also enhance the financial flexibility of the end-user and provide unit sales services, sales monitoring, construction finance, legal documentation and customer service to major developers.Tamweel has been assigned the task of an official escrow account agent by the Land Department, and this is for the first time that a mortgage provider has got this designation.
Tamweel said that it plans to convert the current projects of seventy five real estate developers into an authorized escrow structure.
The Director General of the Land Department, Sultan Butti Bin Mejren said "The Dubai Land Department plans to promote regulations that will contribute to the development of the property market in the emirate. The agreement between Amlak finance and the department ensures the users with ultimate protection."The CEO of RERA (Real Estate Regulatory Agency), Marwan Bin Ghalita has commented that with the approval of a trust manager for the leading institutes in the market, one can rest assured that the Dubai property market will grow to provide deep rooted confidence and security to all its investors.
Labels: Dubai Real Estate, Mortgages, Real Estate News
Mortgages, much in demand in Dubai
Saturday, August 18, 2007
With the increase in property and property prices in Dubai, the demand for mortgages is also rising simultaneoulsy. The home loan and finance service providers have a major role to play in the current Dubai realty sector.
Although, obtaining finance was a littly tricky in the past, the market has improved considerably in recent times.
Banks wish to give mortgages, but are not prepared to accept high risks. When a credit history or credit scoring system is absent, banks have had to find their ways to obtain loans for their clients, through evaluation of risk against the property value, while also assessing the individual's monthly income and visa status.
More number of international companies are now making their presence in the local market, and the competition is getting tougher, which is only good for buyers. In the opinion of some investors, when compared to developed markets such as US and UK, where the interest rates on mortgages are very low with four to five percent, the finance options in Dubai are more expensive. The reality is that at about 8-9 percent, the rates are at a moderate level in comparison to less developed countries, where people pay even up to sixteen percent as interest. For instance, in India, an investor is expected to pay atleast 12 percent as interest rate, which points towards Dubai as a better option.
The lenders in a competitive market have no option but to compete on price, and hence cut down the rates, unlike the Central bank, which has a definite role in handling the interest rates.
While considering a purchase over a time period of fifteen to twenty years, even a slight difference in the borrowing rate, could make a huge difference to the buyer. Unlike in other countries that have a credit reference agency, which tracks the credit history of its residents before processing a loan application, the transient nature in Dubai has brought about some troubles with lending and financing. In Dubai, people come and go all the time and the lenders are at a loss to gain information on the credit history of the borrowers. This has increased the risk involved in lending.
However, the establishment of Emcredit, the first independent credit bureau in the UAE, is an exciting news for the market. This encourages more lenders to the market and helps them in making more informed decisions. However, for a system such as Emcredit, to be successful, there should be great collaboration from all lending companies and banks.
The increasing numbers of finance service providers, is changing the realty market in Dubai, easing out the task of owning a home. As the market keeps developing by the day, more banks are coming forward to lend with stiffer competition, and the interest rates are expected to drop down. As for a couple of years from now, there is a need for placing more financing options before the public, so as to make the purchase of a home more reasonable.
Although, obtaining finance was a littly tricky in the past, the market has improved considerably in recent times.
Banks wish to give mortgages, but are not prepared to accept high risks. When a credit history or credit scoring system is absent, banks have had to find their ways to obtain loans for their clients, through evaluation of risk against the property value, while also assessing the individual's monthly income and visa status.
More number of international companies are now making their presence in the local market, and the competition is getting tougher, which is only good for buyers. In the opinion of some investors, when compared to developed markets such as US and UK, where the interest rates on mortgages are very low with four to five percent, the finance options in Dubai are more expensive. The reality is that at about 8-9 percent, the rates are at a moderate level in comparison to less developed countries, where people pay even up to sixteen percent as interest. For instance, in India, an investor is expected to pay atleast 12 percent as interest rate, which points towards Dubai as a better option.
The lenders in a competitive market have no option but to compete on price, and hence cut down the rates, unlike the Central bank, which has a definite role in handling the interest rates.
While considering a purchase over a time period of fifteen to twenty years, even a slight difference in the borrowing rate, could make a huge difference to the buyer. Unlike in other countries that have a credit reference agency, which tracks the credit history of its residents before processing a loan application, the transient nature in Dubai has brought about some troubles with lending and financing. In Dubai, people come and go all the time and the lenders are at a loss to gain information on the credit history of the borrowers. This has increased the risk involved in lending.
However, the establishment of Emcredit, the first independent credit bureau in the UAE, is an exciting news for the market. This encourages more lenders to the market and helps them in making more informed decisions. However, for a system such as Emcredit, to be successful, there should be great collaboration from all lending companies and banks.
The increasing numbers of finance service providers, is changing the realty market in Dubai, easing out the task of owning a home. As the market keeps developing by the day, more banks are coming forward to lend with stiffer competition, and the interest rates are expected to drop down. As for a couple of years from now, there is a need for placing more financing options before the public, so as to make the purchase of a home more reasonable.
Labels: Dubai Real Estate, Mortgages, Property Prices
Al Tajir announces financing options for Fotunato investors
Thursday, August 16, 2007
A leading real estate specialist in Dubai, Al Tajir Real Estate, has announced tie-up with the Dubai Islamic Bank (DIB) for offering Sharjah-compliant financing options to potential investors in Fortunato, their new property that was launched in May 2007.
The Fortunato is a self-sustained development at the Jumeirah-Village South. The construction work of the community is expected to begin in September this year, and will be complete by mid-2009.
The Chairman of Al Tajir Real Estate, Haytham Al Tajir, mentioned that Al Tajir's partnership with DIB will help customers with many financing options to choose from.
He mentioned that so far, the response for the new project, Fortunato has been excellent and eighty percent of the 320 units that were launched, have been sold out. Al Tajir will shortly be one of the best residential communities in Dubai, he added.
Fortunato development, worth Dh.320 million, covers 637,86 square feet in area, and comprises studios, one and two bedroom and four bedroom apartments, and townhouses. The Fortunato Community, will be easily accessible to its neighbourhood parks, promenades, medical facilities, country club, health club, sporting facilities such as the tennis and foot ball courts, cricket pitch and community center.
The Fortunato is a self-sustained development at the Jumeirah-Village South. The construction work of the community is expected to begin in September this year, and will be complete by mid-2009.
The Chairman of Al Tajir Real Estate, Haytham Al Tajir, mentioned that Al Tajir's partnership with DIB will help customers with many financing options to choose from.
He mentioned that so far, the response for the new project, Fortunato has been excellent and eighty percent of the 320 units that were launched, have been sold out. Al Tajir will shortly be one of the best residential communities in Dubai, he added.
Fortunato development, worth Dh.320 million, covers 637,86 square feet in area, and comprises studios, one and two bedroom and four bedroom apartments, and townhouses. The Fortunato Community, will be easily accessible to its neighbourhood parks, promenades, medical facilities, country club, health club, sporting facilities such as the tennis and foot ball courts, cricket pitch and community center.
Labels: Jumeriah Village, Mortgages, Real Estate Company, Residential
Realty purchases by UK residents to be financed by NBD
Monday, July 09, 2007
With the aim of providing finance to UK residents intending to buy residential properties in UAE, the National Bank of Dubai (NBD) has announced a tie-up with John Charcol, a leading UK based mortgage adviser.
The mutually exclusive tie-up will also offer re-financing to US residents who have already invested in the Dubai residential realty sector. Even mortgages for residential properties, both under construction and the completed ones, from about fourteen reputed developers approved by NBD, are on the offer.
The Head of retail banking of NBD, Suvo Sarkar, says "This tie-up with John Charcol, is a part of innovative approach by NBD, to provide flexible products to a maturing home finance market so as to diversify our customer base."
The mutually exclusive tie-up will also offer re-financing to US residents who have already invested in the Dubai residential realty sector. Even mortgages for residential properties, both under construction and the completed ones, from about fourteen reputed developers approved by NBD, are on the offer.
The Head of retail banking of NBD, Suvo Sarkar, says "This tie-up with John Charcol, is a part of innovative approach by NBD, to provide flexible products to a maturing home finance market so as to diversify our customer base."
Labels: Mortgages, Real Estate News
ADCB to venture into mortgage development
Saturday, July 07, 2007
Abu Dhabi Commercial Bank (ADCB), the third biggest lender by assets in the UAE, plans to set up mortgage finance and property development units to keep pace with the property boom in the emirate.
The mortgage unit is likely to be an "equal venture" with the UAE developers, Sorouh Real Estate Company, Aldar Properties, and the Abu Dhabi government investment firm, Mubadala Development Company.
Currently Amlak and Tamweel are the only two mortgage providers in the UAE. The mortgages provided by other banks contribute to only thirty percent of the entire market.
Also, the ADCB has entered into another joint venture with Macquarie Bank of Australia to focus on the property development and management.
The increasing oil economy in the UAE, coupled with changes in regulations that permit foreigners to purchase homes in certain parts of the emirate has actually spurred a property boom in Abu Dhabi.
ADCB expects to double its assets in the next three years to about Dh.183.5bn, keeping pace with the economic growth in the UAE.
The mortgage unit is likely to be an "equal venture" with the UAE developers, Sorouh Real Estate Company, Aldar Properties, and the Abu Dhabi government investment firm, Mubadala Development Company.
Currently Amlak and Tamweel are the only two mortgage providers in the UAE. The mortgages provided by other banks contribute to only thirty percent of the entire market.
Also, the ADCB has entered into another joint venture with Macquarie Bank of Australia to focus on the property development and management.
The increasing oil economy in the UAE, coupled with changes in regulations that permit foreigners to purchase homes in certain parts of the emirate has actually spurred a property boom in Abu Dhabi.
ADCB expects to double its assets in the next three years to about Dh.183.5bn, keeping pace with the economic growth in the UAE.
Labels: Dubai Real Estate, Mortgages, UAE
'Abu Dhabi homes are under-priced', says HSBC Global report
Saturday, June 30, 2007
Despite the 53 percent higher Gross Domestic Product (GDP) per capita in Abu Dhabi, the average residential property prices are almost ten percent cheaper, says new research.
The HSBC Global Research in its report mentioned that "if we take Dubai as a proxy and follow the regression trend, the current GDP per capita level, the pricing of the houses in Abu Dhabi stands at Dh.14,808 ($4,035) per Square meter, rather than Dh.11,230 ($3,060) says the new HSBC Global Research report."
Residential prices in Dubai and Abu Dhabi stand at Dh.12,371 and Dh.11,230 per square meter, respectively.
In case Abu Dhabi readily opens up the property sector to the same level as Dubai, the residential property prices are likely to shoot up, says the report.
Buyers from foreign countries are permitted to purchase 99 year leases, while the investment in properties is limited to specific areas in the capital.
According to HSBC, the market rigidities and the regulations are actually curbing the potential demand, and hence the prices.
Despite the population being highly skewed towards expatriates, the foreign property ownership is comparatively restricted. There is less incentive for the expatriates to win the residency status and the settlement is impractical.
Just as in other cities, foreign workers are not eligible for permanent residency or for citizenship. The report states that "Limited accessibility to mortgage lending, coupled with high mortgage rates that are as high as seven to eight percent, are actually blocking price appreciation." Moreover, the mortgage penetration rates are the lowest in the UAE. Penetration in Abu Dhabi is even lower as more than ninety five percent of home financing takes place in Dubai.
Due to such low penetration rates, growth rates are high, and the mortgage lending in the UAE is growing by almost eighty percent during 2006.
The HSBC Global Research in its report mentioned that "if we take Dubai as a proxy and follow the regression trend, the current GDP per capita level, the pricing of the houses in Abu Dhabi stands at Dh.14,808 ($4,035) per Square meter, rather than Dh.11,230 ($3,060) says the new HSBC Global Research report."
Residential prices in Dubai and Abu Dhabi stand at Dh.12,371 and Dh.11,230 per square meter, respectively.
In case Abu Dhabi readily opens up the property sector to the same level as Dubai, the residential property prices are likely to shoot up, says the report.
Buyers from foreign countries are permitted to purchase 99 year leases, while the investment in properties is limited to specific areas in the capital.
According to HSBC, the market rigidities and the regulations are actually curbing the potential demand, and hence the prices.
Despite the population being highly skewed towards expatriates, the foreign property ownership is comparatively restricted. There is less incentive for the expatriates to win the residency status and the settlement is impractical.
Just as in other cities, foreign workers are not eligible for permanent residency or for citizenship. The report states that "Limited accessibility to mortgage lending, coupled with high mortgage rates that are as high as seven to eight percent, are actually blocking price appreciation." Moreover, the mortgage penetration rates are the lowest in the UAE. Penetration in Abu Dhabi is even lower as more than ninety five percent of home financing takes place in Dubai.
Due to such low penetration rates, growth rates are high, and the mortgage lending in the UAE is growing by almost eighty percent during 2006.
Labels: Abu Dhabi, Mortgages, Property Prices, Real Estate News
Banks should be facilitators rather than competitors in realty
Sunday, June 24, 2007
Real Estate developers have requested the banks to leave the task of real estate development to them, and to focus on playing the role of a facilitator, rather than a rival.
A study covering the UAE real estate market during the past five years revealed that investment firms and banks have began competing with development companies.
The study by the Al Tharaa Investment Group states that once the banks become the competitors of the developers, they create very difficult conditions on developers who actually desire to seek the services of banks. The study says that permitting the banks to enter into real estate market is an "injustice" towards developers that might cause huge losses to a large number of developers. This could also result in a fall in growth of the real estate sector.
Without finance from banks for developers, and the property investors, the boom in property market that has been witnessed by UAE would have been impossible. The study pointed out that the bank is the most cherished partner for the developers.
However, the Banks view the realty sector to be the most flourishing one, and they have been allowed a certain percentage of investment in the real estate.
The CEO of the Dubai Real Estate Company, Obaid Al Salami, is of the opinion that the firms working in the real estate development should not involve themselves in financing, and hence the banks should leave the real estate development towards those specialized in it.
The Executive Director of New Dubai Real Estate Company, Ahmed Ali Al Abdullah said "The role of banks in the society and in the economy is a much bigger one than the real estate projects," but he however added that, it is good for banks to enter the property sector in a manner that does not harm the real estate companies.
Economist Ahmed Al Samarraie has said that the competition is open as long as it is in a transparent framework, involving economic freedom and equality.
Sultan Thani, the Director General of Dubai Land and Property department said that they do not intend to stop the banks from involving in the real estate sector.
A study covering the UAE real estate market during the past five years revealed that investment firms and banks have began competing with development companies.
The study by the Al Tharaa Investment Group states that once the banks become the competitors of the developers, they create very difficult conditions on developers who actually desire to seek the services of banks. The study says that permitting the banks to enter into real estate market is an "injustice" towards developers that might cause huge losses to a large number of developers. This could also result in a fall in growth of the real estate sector.
Without finance from banks for developers, and the property investors, the boom in property market that has been witnessed by UAE would have been impossible. The study pointed out that the bank is the most cherished partner for the developers.
However, the Banks view the realty sector to be the most flourishing one, and they have been allowed a certain percentage of investment in the real estate.
The CEO of the Dubai Real Estate Company, Obaid Al Salami, is of the opinion that the firms working in the real estate development should not involve themselves in financing, and hence the banks should leave the real estate development towards those specialized in it.
The Executive Director of New Dubai Real Estate Company, Ahmed Ali Al Abdullah said "The role of banks in the society and in the economy is a much bigger one than the real estate projects," but he however added that, it is good for banks to enter the property sector in a manner that does not harm the real estate companies.
Economist Ahmed Al Samarraie has said that the competition is open as long as it is in a transparent framework, involving economic freedom and equality.
Sultan Thani, the Director General of Dubai Land and Property department said that they do not intend to stop the banks from involving in the real estate sector.
Labels: Dubai Real Estate, Latest News, Mortgages
Projected growth in Home Finance
Saturday, June 16, 2007
The UAE's home finance sector has grown in line with the country's real estate market in the past three years, with current outstanding housing loans standing at Dh11.5 billion, according to a recent study by EFG-Hermes. The Egyptian investment bank estimates that the UAE housing finance sector will grow by Dh14bn in 2007, Dh18bn in 2008 and 2009, Dh14bn in 2010 and Dh17bn in 2011, based on an expected population compound annual growth rate of about three per cent.
Amlak and Tamweel are by far the dominant forces in the Emirates home finance market, accounting for 35 and 25 per cent of the industry, respectively.
EFG-Hermes predicts total growth in real estate projects will be more than Dh419bn between now and 2011 and says that of those, Dh64bn will be funded through credit.
The UAE's home finance sector has grown in line with the country's real estate market in the past three years, with current outstanding housing loans standing at Dh11.5 billion, according to a recent study by EFG-Hermes. The Egyptian investment bank estimates that the UAE housing finance sector will grow by Dh14bn in 2007, Dh18bn in 2008 and 2009, Dh14bn in 2010 and Dh17bn in 2011, based on an expected population compound annual growth rate of about three per cent. Amlak and Tamweel are by far the dominant forces in the Emirates home finance market, accounting for 35 and 25 per cent of the industry, respectively. EFG-Hermes predicts total growth in real estate projects will be more than Dh419bn between now and 2011 and says that of those, Dh64bn will be funded through credit.
Amlak and Tamweel are by far the dominant forces in the Emirates home finance market, accounting for 35 and 25 per cent of the industry, respectively.
EFG-Hermes predicts total growth in real estate projects will be more than Dh419bn between now and 2011 and says that of those, Dh64bn will be funded through credit.
The UAE's home finance sector has grown in line with the country's real estate market in the past three years, with current outstanding housing loans standing at Dh11.5 billion, according to a recent study by EFG-Hermes. The Egyptian investment bank estimates that the UAE housing finance sector will grow by Dh14bn in 2007, Dh18bn in 2008 and 2009, Dh14bn in 2010 and Dh17bn in 2011, based on an expected population compound annual growth rate of about three per cent. Amlak and Tamweel are by far the dominant forces in the Emirates home finance market, accounting for 35 and 25 per cent of the industry, respectively. EFG-Hermes predicts total growth in real estate projects will be more than Dh419bn between now and 2011 and says that of those, Dh64bn will be funded through credit.
Labels: Latest News, Mortgages
Aldar to be provided with $2.1b syndicated funds
Sunday, June 10, 2007
The Morgan Stanley Bank has launched syndication of separate conventional secured term loan and the Dubai Islamic Bank (DIB) has launched the Islamic Ijara facilities totaling $2.1billion for the Abu Dhabi based real estate developer, Aldar Properties.
These facilities will be used for financing the infrastructure of the Al Raha Beach, located along the Abu Dhabi beachfront, which is a mixed-use retail, office and residential development, constructed by Aldar.
The lead arrangers who have underwritten the facilities include the Morgan Stanley, the Dubai Islamic Bank, Abu Dhabi Commercial Bank, First Gulf Bank and National Bank of Abu Dhabi.
The Aldar development comprises construction and office management, retail sites, residential properties, leisure facilities, luxury schools and resorts, and other tourist attractions.
This development of Aldar is expected to house more than 120,000 residents, which is located away from the main highway between Dubai and Abu Dhabi and links to Al Raha Gardens, Khalifa City and the Abu Dhabi International Airport.
These facilities will be used for financing the infrastructure of the Al Raha Beach, located along the Abu Dhabi beachfront, which is a mixed-use retail, office and residential development, constructed by Aldar.
The lead arrangers who have underwritten the facilities include the Morgan Stanley, the Dubai Islamic Bank, Abu Dhabi Commercial Bank, First Gulf Bank and National Bank of Abu Dhabi.
The Aldar development comprises construction and office management, retail sites, residential properties, leisure facilities, luxury schools and resorts, and other tourist attractions.
This development of Aldar is expected to house more than 120,000 residents, which is located away from the main highway between Dubai and Abu Dhabi and links to Al Raha Gardens, Khalifa City and the Abu Dhabi International Airport.
Labels: Mortgages
Tamweel mortgage will cater all market segments
Monday, April 23, 2007
Islamic mortgage lender Tamweel said yesterday it is catering to all the market segments from mid to high income and not just the premium segment.
Tamweel partnering with developers who believe in offering the best to end-users as our job is to protect them. Also anounced a mortgage plan for apartments in the Dh12-billion Discovery Gardens project being developed by Nakheel.
The company will provide 93 per cent finance for 1,200 apartments in the project’s Mediterranean section, with down payments starting at Dh35,000 for studios and Dh60,000 for one-bedroom apartments. These payments are inclusive of arrangement fees, and finance is available for up to 20 years.
Discovery Gardens, located just off Sheikh Zayed Road, comprises 291 buildings and houses 26,000 apartments. Covering an expanse of 26 million square foot, the development will include six themed communities inspired by garden living such as Zen, Mediterranean, Contemporary, Cactus, Mogul and Mesoamerican courtyard gardens.
Tamweel partnering with developers who believe in offering the best to end-users as our job is to protect them. Also anounced a mortgage plan for apartments in the Dh12-billion Discovery Gardens project being developed by Nakheel.
The company will provide 93 per cent finance for 1,200 apartments in the project’s Mediterranean section, with down payments starting at Dh35,000 for studios and Dh60,000 for one-bedroom apartments. These payments are inclusive of arrangement fees, and finance is available for up to 20 years.
Discovery Gardens, located just off Sheikh Zayed Road, comprises 291 buildings and houses 26,000 apartments. Covering an expanse of 26 million square foot, the development will include six themed communities inspired by garden living such as Zen, Mediterranean, Contemporary, Cactus, Mogul and Mesoamerican courtyard gardens.
Labels: Mortgages
Growth in Dubai Mortgage Market help buyers
Saturday, April 07, 2007
UAE is seeing a surge in its mortgage market, with more players offering a diversity of mortgage-related offerings. This is a good thing for the country and the people who live here. According to one leading mortgage provider in the region, total mortgage loans in the UAE are set to reach Dh20 billion by the end of this year. The market could hit Dh100 billion by the end of the decade – almost a ten-fold increase since 2004.The UAE’s growing mortgage market is reflected in the number of home-loan providers setting up operations here. Until recently, there were only a handful of mortgage companies in the country, and the sector was dominated by local banks. Today, international financial institutions are lining up to take advantage of the lucrative business opportunities available in the region.
More competition, in turn, will lead to more attractive loan packages for buyers, which will fuel more interest among prospective homeowners, which will increase competition further, and so on. It is the best possible cycle and promises to provide an added boost to the local economy.
The reason for this is simple: An increase in mortgage availability will necessarily open up the housing market to more buyers, which will increase construction, encourage foreign direct investment, stimulate the banking sector and have a knock-on effect across many other areas.
Equally importantly, though, making home ownership more widely available will promote stability and establish ties between a country and its residents that go beyond the financial. The fact that more people are taking out mortgages signals an increase in public trust in the country’s economy and its institutions. It also suggests that people are here for the long haul. And it’s not only Dubai where this dynamic is unfolding – other emirates too are seeing a rise in the mortgage market.
As rents continue to rise and mortgage payments become more attractive, the current upward trend is sure to continue. This is good news in ways that go beyond economic considerations. No longer will owning a home be the privilege of the wealthy. No longer will people living on lower incomes be consigned to a lifetime of paying rent.
[Source : Emirates Today]
Labels: Burj Dubai, Mortgages
High Mortgage demands in UAE results shortage of Housing Finance
Sunday, January 21, 2007
According to recent reports by EFG-Hermes, an investment Bank, the growing population, combined with strong mortgage demand has temporarily resulted in shortage of Housing Finance.
The shortage is mainly believed to be due to the constraints faced by Tamweel and Amlak Finance, which accounts for 25 and 35 percent of the market respectively and the remaining forty percent is divided among number of other Banks providing housing finance. Both Tamweel and Amlak have already applied for a Banking License, which, if granted, will permit them to enhance their lending business.
The report states that the demand could have been even higher, if all the project deliveries had been completed on time, and in such a case, the housing finance market would have faced a tough time in keeping pace with the demand due to funding problems.
As per estimations from EFG-Hermes, the total outstanding housing loans were Dh.11.5 billion during end of September 2006. Due to factors such as a booming economy and real estate market, sudden increase in population in the UAE, an environment with low interest rates and due to the change of regulations in the property market, the market was immensely benefited.
Reports indicate that the house finance sector in the UAE will witness an increase by Dh.14bn in 2007, Dh.18bn during 2008 and 2009, Dh.14bn in 2010 and Dh.17bn in 2011. According to EFG, the large number of units waiting to be delivered will come into the market during 2007, 2008 and 2009 due to the delay in deliveries during the past years. EFG believes that due to this significant increase in the number of housing units, occupancy rates may fall, and hence the off-plan buyers could possibly sell their properties due to funding constraints, rather than bearing the risk of owning empty houses in a market that is relatively soft.
This could put pressure on the prices of the property, and hence beginning 2008, the softening is likely to take place. EFG also expects an increase in property development in Abu Dhabi rather than Dubai in the years after 2009.
The shortage is mainly believed to be due to the constraints faced by Tamweel and Amlak Finance, which accounts for 25 and 35 percent of the market respectively and the remaining forty percent is divided among number of other Banks providing housing finance. Both Tamweel and Amlak have already applied for a Banking License, which, if granted, will permit them to enhance their lending business.
The report states that the demand could have been even higher, if all the project deliveries had been completed on time, and in such a case, the housing finance market would have faced a tough time in keeping pace with the demand due to funding problems.
As per estimations from EFG-Hermes, the total outstanding housing loans were Dh.11.5 billion during end of September 2006. Due to factors such as a booming economy and real estate market, sudden increase in population in the UAE, an environment with low interest rates and due to the change of regulations in the property market, the market was immensely benefited.
Reports indicate that the house finance sector in the UAE will witness an increase by Dh.14bn in 2007, Dh.18bn during 2008 and 2009, Dh.14bn in 2010 and Dh.17bn in 2011. According to EFG, the large number of units waiting to be delivered will come into the market during 2007, 2008 and 2009 due to the delay in deliveries during the past years. EFG believes that due to this significant increase in the number of housing units, occupancy rates may fall, and hence the off-plan buyers could possibly sell their properties due to funding constraints, rather than bearing the risk of owning empty houses in a market that is relatively soft.
This could put pressure on the prices of the property, and hence beginning 2008, the softening is likely to take place. EFG also expects an increase in property development in Abu Dhabi rather than Dubai in the years after 2009.
Labels: Mortgages
Promotional Offers on Mortgages increases
Saturday, December 23, 2006
As per reports by Colliers International, the increase in competition in the real estate market of UAE, has led to changes in mortgage offerings. As against the loan to value (LTV) mortgage of seventy five to eighty percent on majority of developments that was being offered for the past one year, currently there are promotional offers of even up to ninety seven percent LTV mortgages with interest rates of 6.5 to 7.75 percent. The cost of construction that’s continuously on the rise coupled with a competitive market are believed to be the cause for this challenging environment.
Labels: Mortgages
Amlak plans Saudi foray by year-end
Wednesday, September 13, 2006
Amlak Finance aims to begin operations in Saudi Arabia and Egypt by the end of the year, its chief executive said. The Dubai-based Islamic mortgage firm says the opportunities in these virgin markets are exciting for a firm such as Amlak, which aims to follow parent firm, Emaar Properties, where opportunities exist.
Emaar, which owns 45 per cent of Amlak, is developing the $26.6 billion (Dh97bn) King Abdullah Economic City on the Red Sea, the largest private sector initiative in the Kingdom."The opportunity in Saudi is just colossal," Mohammed Ali Al Hashimi said. Emaar also has several projects in Egypt. The underdeveloped Egyptian property market, where mortgages have only been available since 2004, presents further opportunities, he said. "Remember, Amlak developed in Dubai, which is tiny compared to the size of these markets." Dubai has a population of little more than one million; Egypt's population is around 75 million, while Saudi has around 25 million.
Al Hashimi said the company, like rival mortgage house Tamweel, is also hoping to receive a licence to become an Islamic bank from the central bank, but has received no word on its application. Financial results are expected to continue to be strong; he said third-quarter results would be "good".
Amlak in July reported a first-half net profit of Dh80 million, up 60 per cent on the same period last year. Second-quarter profit reached Dh42.9m, compared with Dh30.5m in the same period of 2005 and Dh37.1m in the first quarter of this year.
Emaar, which owns 45 per cent of Amlak, is developing the $26.6 billion (Dh97bn) King Abdullah Economic City on the Red Sea, the largest private sector initiative in the Kingdom."The opportunity in Saudi is just colossal," Mohammed Ali Al Hashimi said. Emaar also has several projects in Egypt. The underdeveloped Egyptian property market, where mortgages have only been available since 2004, presents further opportunities, he said. "Remember, Amlak developed in Dubai, which is tiny compared to the size of these markets." Dubai has a population of little more than one million; Egypt's population is around 75 million, while Saudi has around 25 million.
Al Hashimi said the company, like rival mortgage house Tamweel, is also hoping to receive a licence to become an Islamic bank from the central bank, but has received no word on its application. Financial results are expected to continue to be strong; he said third-quarter results would be "good".
Amlak in July reported a first-half net profit of Dh80 million, up 60 per cent on the same period last year. Second-quarter profit reached Dh42.9m, compared with Dh30.5m in the same period of 2005 and Dh37.1m in the first quarter of this year.
Labels: Mortgages
