Dubai
News and research on the property market in Dubai. Read our latest news articles on what is happening in the real estate market in Dubai including information on properties, statistics and trends. Catch up on the latest data affecting those looking to buy a property or holiday home in Dubai.

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Anecdotal evidence suggests that the promulgation of the new Dubai Property Law on March 12th has caused a surge in demand for local real estate at a time when available property is in short supply. The result is an up-tick in prices that could turn into a new leg for the Dubai real estate boom.

It is much too early to make any definitive judgment about the impact of the legalization of freehold property ownership for foreigners in Dubai last month. But buyers and sellers have remarked upon a sudden pick up in activity from nowhere, and an almost daily upward movement in prices.

This is what agents such as Asteco had been forecasting, namely that a number of cautious buyers were hovering on the brink of commitment but waiting until the new law was finally passed. The question is whether this phenomenon will prove transitory or a more permanent feature of the marketplace.

Perhaps the truth is half-way between these extremes. But with Emaar Properties only having delivered 13,000 properties up until the end of 2005, Dubai is not exactly awash with properties available for sale at the moment, while the city’s population is expanding by more than 200,000 a year.

Supply shortage

It is not hard to see that a relatively small pool of available homes – most now being occupied by happy tenants or owners – is today being pursued by considerable demand. High rents in Dubai also increase the pressure to buy, both for residential and investment purposes.

Yet Asteco has also published a well known statistic of 85,000 plus housing units a year coming on stream over the next three to four years. The problem is that actual delivery of this property flow is subject to construction delays, and the huge new supply has still to hit the market.

When it does – and it may not be really felt until mid-2007 now – then market forces would suggest that Dubai house prices should begin to first stabilize and then fall back, with more sellers than buyers.

Prices still rising

The problem with this argument is that nobody can predict how high house prices might go before they hit the ceiling, possibly in mid-2007. For if prices were to really spike in a market blow-off situation then they could still go a lot higher than they are today.

Certainly in terms of investment the rental returns on Dubai property usually represent ‘fair value’ to landlords with yields of 6-8%. For property to be judged expensive then yields would need to halve to something closer to current global real estate levels.

That these levels have not yet been reached most likely indicates that capital values have not peaked either for Dubai property.

It is also possible that later on rentals could fall without impacting seriously on capital values, thus adjusting the rental yield to something closer to most other major property markets. Either way a margin of safety exists in Dubai property that is not widely appreciated.Source: AMEInfo

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Dubai-based Emaar Properties is on the verge of a major global expansion; the company’s overseas investments have bypassed its domestic commitments and it is on the lookout for similar ventures. Emaar’s commitments to its international operations have crossed $35 billion, according to its estimates. It is the world’s largest property developer in terms of market capitalization.

Mohammed Ali Al Abbar stated his company’s international operations will dominate its future activities. “In two years 80 percent of our projects will be located outside the UAE”, he opined. In terms of value, Emaar’s international operations are much higher than its domestic operations.

In the UAE, Emaar’s most significant project is the Burj Dubai development, the value of which is expected to surpass $20 billion. Its external projects include $10 billion each in Saudi Arabia and Turkey , followed by Morocco with $6.9 billion and India where projects worth $6 billion are coming up. Also it has sizeable assets in Syria and other markets.

Emaar recently appointed Ahmad Al Matroushi as head of its UAE operations while dividing its international portfolio according to the countries where the projects are located. The company has six projects in the pipeline in Morocco ; it has handed over 13,000 apartments and villas and is currently embarked on a major international expansion drive that will witness the launch of more projects in North Africa . Emaar has targeted a number of countries for expansion. It successfully completed the construction of Hyderabad Convention Centre in India and recently has been commissioned to develop King Abdullah City , a $26 billion development in which its share of investment will be avout $10 Billion.

“Both Indian and Saudi markets are big for us and we have major expansion plans in these two countries. We are also going to be very big in Morocco where we will have some new and exciting projects.” Al Abbar said. Emaar has also made inroads into Egypt and is negotiating for new projects in Tunisia.

Source: GoWealthy.com

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Dubai Properties, part of the Dubai Government’s Dubai Holding, has confirmed freehold rights for its developments, CEO Hashim Al Dabal told Gulf News. He said that the new property law will reflect postively on the market and encourage investors.

Source: AME Info

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Lawyers who have seen the latest draft of the Dubai Property Law are impressed. Dubai residents looking to buy a new home will be granted outright ownership of both the property and the land. There will be no back-peddling from freehold to leasehold.
The new Dubai Property Law will mean that for the first time foreigners will be allowed to register properties under own names in the Dubai Land Department. And if the latter conjures up images of Dickensian title deeds think again, this department offers the very latest in electronic land and property title registration.
Previously buyers held a contract of sale from the developer which allowed transfer of ownership only through the developer, with an agreement in the contract that a full and unencumbered freehold title would be granted on the property as soon as it became available.
The new law means that this moment has arrived and that foreign owners can expect to have their title deeds available for collection in due course; not that their legal entitlement to sell the property has ever been in doubt.

Mortgage market impact

Indeed, the biggest practical impact may be felt in the local mortgage market rather than the re-sale market. Some international banks, notably Standard Chartered Bank, have not been willing to enter the mortgage market due to the legal uncertainties surrounding ownership rights, duties and obligations.
Now presumably Standard Chartered Bank and others will enter the mortgage market and begin to force down the cost of mortgages with aggressive pricing and new products. It has to be said that Amlak Finance’s 7.5% mortgage rate is already significantly higher than RAKbank at 6.9% but there is room for lower rates particularly for introductory discounts.
Generally the lower the cost of money in a housing market, the higher house prices will move. Part of the reason for the very high prices seen in many global real estate markets is the low cost of funds at present. Thus cheaper mortgages in Dubai should mean higher prices here too.
Leading Dubai estate agents Asteco are on the record as saying that the new law will bring forward an avalanche of new buyers, many of whom already have mortgages arranged but just want the law in place before they go ahead and buy.

40-article law

The 40-article draft law covers five broad areas: title and ownership of title; areas nationals and foreigners can own; granting the right to own units in an apartment or condominium; long-term leases; and mortgages. The law also gives UAE and GCC nationals the unhindered right to buy property anywhere in Dubai.
A sub-clause allows foreigners to own properties with ‘The Ruler’s consent’ which will cover properties of the major freehold developers: Emaar, Nakheel and Dubai Properties. Foreigners may also request special permission from The Ruler to buy properties outside of the designated areas.
Another article formalizes long-term leases and stipulates that leases of longer than five years have to be registered with the Dubai Land Department.

Source: AME Info

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The UAE’s RAK Properties is planning to invest Dh1.4 billion ($381.2 million) this year in new luxury developments in the emirate of Ras Al Khaimah and is looking for joint ventures in Dubai and Abu Dhabi.

Mohammed Sultan Al Qadi, the company’s chief executive, also said he thought the firm’s shares, traded on the Abu Dhabi stock exchange, had fallen too low.

‘It should be better…It has been as high at Dh4.8 (dirhams)…with a company like ours with over 70 million square feet (6.503 million square metres) given free by the government we have large assets,’ Al Qadi said.

In November, Ras Al Khaimah, one of the seven emirates in the UAE, issued a decree allowing foreigners to own real estate in RAK Properties projects, following Dubai which kicked off a property boom by allowing limited foreign ownership in 2002.

Al Qadi said he did not expect profits to surge as a result of the law as RAK Properties was facing competition from four other real estate firms in Ras Al Khaimah, although he expected the overall property market to grow 20 to 30 per cent this year.

‘The supply and competition is high and we don’t think the margins will be very high but they will be reasonable.’

Al Qadi said the company was planning to invest Dh1.4 billion in new luxury developments in Ras Al Khaimah this year.

The firm has already started work on a project worth over Dh20 billion in Ras Al Khaimah which will include 10 five-star hotels and almost 4,000 residential units set to be completed by the end of 2008.

Other projects include a residential complex centred around a golf course, two residential towers, and a Dh5-billion residential and commercial development modelled on Dubai Marina, a complex of luxury residential towers outside downtown Dubai.

Al Qadi said he was setting up a financing company with a capital of around Dh1 billion to fund projects for RAK Properties, which he says has capital of Dh2 billion.

‘We have sufficient funds at our disposal for the next few years,’ he said.

Al Qadi said RAK Properties was looking to form a joint venture with one or two firms in Dubai or Abu Dhabi and would seek to enter the medium to lower end of the market.

‘We’ve been talking but it hasn’t taken (on) seriousness yet,’ Al Qadi said. ‘It will likely be with one or two companies… If a good opportunity comes I may move tomorrow.’

Al Qadi said he saw strong demand continuing in the next five to 10 years in the Dubai property market but much of the growth would come in the medium-to-low cost sectors because of an oversupply of luxury projects.

‘In Ras Al Khaimah, we want to show something unique, but if we go somewhere else they may not need deluxe or super-deluxe, they may need middle or lower, and we’ll need to meet that demand,’ he said.

Source: Trade Arabia

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Dubai: The Dubai government is expected to announce its new property law this month. The law awaits the Ruler’s approval, a report said. The new law is expected to allow a combination of 99-year renewable lease and freehold rights in limited locations in Dubai.

The law will be followed by a decree that will regulate the freehold market for expatriates and limit it to certain projects being developed by a handful of developers. “The proposed law is in final shape and is awaiting the signature of Dubai Ruler and UAE Vice-President and Prime Minister Shaikh Mohammad bin Rashid Al Maktoum, to become a law,”

Mohammad Sultan Thani, director development and marketing administration in the Dubai Lands Department, was quoted as saying by the report. “We expect the new law to be approved any time following the mourning period that ends in the second week of February. Once the new law is issued, Dubai Land Department will facilitate the registration of freehold properties in the name of respective owners.”

He said, the Land Department will publish booklets on the fee structure on transactions and step-by-step guide on registering properties, inheritance, mortgage and change of ownership of properties for the expatriates once the new law is issued. Currently, Emaar Properties, Nakheel and Dubai Properties are the only three mandated master developers allowed to offer freehold properties.

Source: Gulf Daily News Vol XXVIII NO. 321 Saturday 4 February 2006

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Source: AMEInfo – The slowdown reported in apartment sales in Dubai has not been apparent for villas. Even off-plan villa sales are still going strong, and the re-sale market remains a seller’s market. This new dynamic to the market has been developing for some time. 

The mismatch between the supply of villas and the latent demand has been apparent for many years. In the early days of the first Dubai Marina apartment sales Emaar Properties noted huge demand for the very small number of villa units at the base of the development.

This is one reason why Emaar went on to build the 2,000 villa Meadows and 4,000 town-house Springs developments, and then the very successful Arabian Ranches project. The first two schemes sold out long ago, though the release of villas at The Arabian Ranches continues. Nakheel enjoyed similar success with its 6,000 Jumeirah Islands villas.

Victory Heights

Only last week-end the Victory Heights villas – a 900 villa development in seven villages as a part of the Dubai Sports City – sold 164 villas or 70% of its first phase, with town-houses priced from $350,000 up to six-bedroom villas at $2.2 million.

Now the Victory Heights is a nice project around an Ernie Els designed golf course called The Dunes, and villas near to golf courses tend to sell at a premium. Emaar has certainly used this to advantage with its projects facing on to the Emirates Golf Club and The Montgomerie, as well as the desert golf course at The Arabian Ranches.

However, investors are interested in more than an attractive location. For over the past year there has been a realization that villas may well offer the best investment returns in the long-run in Dubai.

For a start pricing per square foot is generally cheaper for villas than apartments, despite the fact that villas come with a plot of land and a garden. In most cities of the world this factor makes villas more expensive than apartments and not vice-versa.

Stable villa rental yields

The rental market for villas in Dubai is also well established and given that the supply of villas built in recent years is, if anything, behind the demand curve then the outlook for rental yields on villas should be considered more stable. In short, there is not a massive oversupply of villas about to hit the market whereas the same can not be said for apartments.

This is one explanation why the re-sale market for villas in Dubai is currently strong, with properties not remaining on the market very long, while re-sales of off-plan apartments in a number of projects is difficult.

So it looks as though two different property markets now exist in Dubai: villas and apartments; although to be fair completed apartments in The Greens, for example, are still in demand, and the off-plan apartment market is where the main problems exist.

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DUBAI – The fast growth in the local leisure boat market is being sparked by the numerous waterfront developments in Dubai, a source in the industry told Khaleej Times yesterday.

An estimated 25,000 new berths for boats will be built over the next five years in the UAE. In Dubai alone, mega- projects such as the Dubai Marina, The Palms and the Dubai Festival City will feature large marinas, capable of hosting thousands of boats.

“The general demand in this region is for boats which are usable for watersports, fishing, diving and snorkelling; multi-functional boats which are suitable for beginners and advanced drivers,” the industry official said.

According to the Gulf Boating Market Report, this strong incline in marina leisure is projected for the UAE, Kuwait and Qatar. Around the Gulf, experts estimate one boat for every 423 local people.

Leisure fishing is on of the main drivers for boating in the Gulf, due to the traditional aspect of fishing and pearl-diving in the past. However, with the increasing number of overseas property purchasers in Dubai, imported boats from leading European and US builders are on the increase. Sailing boats, which have had only a small market share in the Gulf in the past, are showing an increasing trend in the UAE.

The market leader in the supply of leisure boats in the Gulf is the UAE-based Gulf Craft, which has built some 4,500 boats in twenty years of production and has a boat park market share of 16 per cent. Bayliner, a member of the UK Brunswick Boat Group, has the largest share of the imported boat park with an estimated market share of 3.6 per cent.

Italy-based manufactures Azimut, Ferretti and Pershing and Princess and Fairline from the UK are the most established brands in the region.

There are currently three Arabic boating magazines, The World of Yachts and Boats, Bahry and Knotika, besides a few web sites that service the marine leisure market.

World wide, it is estimated that 30% of the world’s mega-yachts are owned by AGCC nationals, yet many keep them in the Mediterranean.

Local and international banks have been quick to realise the opportunity, offering a range of financing options for potential boat owners.

UK-based HSBC requires a 30 per cent down payment and a valid boat and life insurance. The National Bank of Abu Dhabi (NBAD) also offers two types of boat financing loans.

This year’s boat show, scheduled from March 14-18, is set to break records with over 90 per cent of exhibitor space already booked, and more than 25,000 visitors anticipated.
Source: khaleejtimes.com

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Dubai is becoming increasingly popular with British property investors looking for some sun.

Currency specialist HIFX’s new Global Property Hot Spots report finds that the Middle Eastern state, along with Bulgaria, is increasingly popular with UK residents looking for a second home.

Since last year the number of Britons buying homes in Dubai has increased 60 per cent, with the number of people buying a property in Bulgaria rising 77 per cent.

Traditional favourites France and Spain are still the most popular places for UK residents to buy second homes in, but interest there is on the wane.

“Although France and Spain remain the most popular destinations to buy abroad, due to their proximity and the cheap price of travel, British citizens are starting to look further afield,” said Alex Wright, director of HIFX.

“Dubai is an attractive location for Brits with the winter sun averaging eight hours a day. Property prices are relatively cheap compared to international standards and rental yields are still high. Dubai has many grand projects to increase its visitor numbers which should sustain rental incomes for investors.”

But, overall, Britons owning property abroad tend to cluster closer to home.

Thirty-five per cent of Brits with homes overseas have a place in Spain and 24 per cent have a property in France.

But interest in buying in Spain has now dropped 26 per cent, HFIX reveals, with the number of Brits asking about France falling 24 per cent.

By contrast, the number of people enquiring about Bulgaria rose eight per cent.

“Bulgaria is booming and the Black Sea resorts are reminiscent of Spain 20 years ago; investors are buying in their droves and there is similar activity in some of the ski resorts,” said HIFX’s Mr Wright.

“Supply is in danger of outstripping demand from a rental perspective so investors should be wary; capital growth is what most speculative investors are chasing at the moment. Traditional areas such as Spain and France are still popular with families looking for a holiday home and retirees who plan to spend the majority of their time abroad but the younger generation are becoming more adventurous.”

Source: myfinances.co.uk