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by Overseas Property Mall on Tuesday, November 22nd, 2011 in Dubai Property, Travel, UAE Property
The UAE seems well perched on the formidable wings of its soaring aviation industry. Markets are swiftly jetting towards the promise land of both recovery and progress. The region is close to realising its long held ambition of piloting growth independently off its naturally occurring oil reserves (UAE is the 4th largest exporter of oil in the world), and is strategically building upon its tourism industry to provide the necessary traction.
by Overseas Property Mall on Friday, September 9th, 2011 in Dubai Property, UAE Property
Some mixed news for Emaar properties, one of Dubai’s — state owned — master developers. That is, mixed news, not in a share of good and bad news, but rather in the fact that the bad news was tinged with goodness.
The company posted a 69 per cent decline in net profits for the second quarter of this year, which is obviously not good news. However, the decline was largely put down to the equity-hit the company took for writing off its 30 per cent stake in Dubai Bank, which was taken over by the government earlier in the year. This is being reported as good for the company, because it removes a “corporate distraction” and absolves the firm of any further calls for equity injection. In short: allowing the developer to concentrate on development.
by Overseas Property Mall on Thursday, February 24th, 2011 in Dubai Property
During the boom Dubai property became world famous for world firsts; a group of man-made islands in the shape of a palm tree here, the world’s tallest tower there, and a group of man-made islands in the shape of the world somewhere else. However, since then it has become famous for a whole other set of recorded firsts.
by Overseas Property Mall on Tuesday, December 14th, 2010 in Dubai Property
We recently reported on the massive Dubai property buying spree as members of the Afghan government and Kabul Bank directors bought up dozens of properties using suitcases of cash — literally.
But it is only in new US diplomatic cables that have been released by Wikileaks that we find out the true extent of the apparent corruption, theft and the powerlessness of the US government to spend all our money (taxpayers funding the money tap) on luxury properties leaving the Afghan population to live in squalor.
by Overseas Property Mall on Wednesday, December 1st, 2010 in Dubai Property, Florida
We all know about the US real estate bubble bursting in 2006, which was probably one of the largest contributory factors in the US financial crisis, along with the deregulation of lending practices. One of the hardest hit areas is Florida when its huge real estate bubble burst. This was not the first time that a Florida real estate bubble had burst, and in fact there are many parallels between the first Florida real estate boom and bust and the current bust.
by Overseas Property Mall on Sunday, November 14th, 2010 in Dubai Property, Foreclosures
A Dubai law firm has reported that the Dubai Land Department (DLD) will recommence property auctions from this month, including foreclosed properties.
“Recent discussions with the Land Department of Dubai indicated that they are now ready to re-commence property auctions, including foreclosed property, as the number of transactions processed daily by the department increases and they see the market stabilising. They hope to hold the next property auction in November,” Nick Clayson, Partner and head of real estate, Middle East, Norton Rose Group, told Emirates 24/7.
by Overseas Property Mall on Monday, October 25th, 2010 in Dubai Property
For most people no introduction is necessary to the Burj Khalifa. It is the world’s tallest and most glamorous feat of modern sky-scraping architecture. It is what it was always meant to be; prestigious, unfortunately during its five years of construction people’s appetite for prestigious properties in Dubai dried up almost entirely.
Sales apparently weren’t a problem amidst the hype of a tower about to open; developer Emaar had apparently sold 90% of properties in the development before it opened, but now owners of said properties are having great difficulty in finding tenants, so much so that one broker marketing their homes has slashed rental rates by as much as 40 percent.
The cost of renting a luxurious studio (floor to ceiling windows, marble and wooden floors) is down to 6,666 dirhams ($1,815) a month, one-bedroom apartments down to 10,000 dirhams per month ($2,700), and Two-bedroom apartments down to 15,833 dirhams ($4,250) per month, according to Dubai based Better Homes.
by Overseas Property Mall on Monday, October 4th, 2010 in Dubai Property
Experts have reported a surprise fall in vacancy rates in Dubai, after an unexpected but much needed “summer rush”.
Residential vacancy rates fell 25% from 11% to 8% according to analysis of the PropertyFinder.ae website by Peter Cooper, editor of Arabian Money an independently published Dubai investment newsletter.
“It is a big shift,” said Cooper, “this is a significant change in the local property market.”
The figures come from the comparison of the number of apartments for rent and sale as a comparison to the estimated total housing stock in June and on September 7th. Arabian Money found 20,130 units for sale, and 11,797 units for rent in June, 11% of an estimated 300,000 unit-strong housing stock in Dubai.
This is compared to 14,984 units for sale and 9,634 units for rent in September, bringing vacancy down to 8% of supply.
“It is a supply squeeze and quite the opposite of what we expected,” commented Cooper who has been writing about Dubai real estate for more than a decade.
“This could be a sign that people are actually coming back after the summer, and lower rent has brought back the commuters from Sharjah and encouraged those paying high rents in Abu Dhabi in turn to commute from Dubai,” he added.
None the less, looking at Dubai’s 7,561 apartments available for rent, compared to that of Abu Dhabi with 979 apartments, this is still high, but, according to Arabian Money is a reflection of Abu Dhabi’s performance being even stronger over the summer.
“Abu Dhabi stock has got even tighter over the recent weeks. Presently, there are 1,684 units for rent and 1,680 for sale,” Cooper said.
He recalled that in June Elaine Jones, MD of Asteco, one of Dubai’s two leading local estate agencies, commented that the reported ‘new supply’ was hard to identify; her market instinct has now shown up in the hard figures.
The reason for the drop in the vacancy rate is in some doubt, is it because new supply is slow in coming on-line? Or is it because new supply is closer to the lower end of predictions (10,000) rather than the high end (30,000)?
Or yet still, “perhaps the sudden construction halt of two years ago is the explanation,” says Cooper. “Projects that stopped may still be being counted as upcoming completions. Then again many projects seem to be working on a stop-and-go programme as money comes in and that is naturally delaying completion,”
But Cooper thinks the answer is probably Dubai’s reaction to the financial crisis, allowing the housing market to sort out supply, demand and price.
“Dubai has let the market system work,” he said.
“The ‘high’ property and rental prices could not supported and were ‘allowed’ to fall to a level that the market can support, down by up to 50 per cent,” he concluded.
That final statement could be looked upon as bearish. Nobody allows prices to fall, the market demands it; no one really gets a choice in the matter. When the demand balance tips in favour of supply/buyers, price drops almost always become inevitable, it is simply a matter of time.
In this case Dubai prices fell sharply and the market would have recovered in 2009 were it a direct result of the prices falling. Rather it was a massive drop in confidence that triggered falling demand and prices, and it is the restoration of that confidence (with the big developers being bailed out for example) that has led to the rising demand.
At any rate, you can’t argue with the facts. Vacancy rates do appear to have fallen for now, whether they will rise sharply again will depend on just how much new supply is out there, and how quickly it comes online.
by Overseas Property Mall on Monday, September 20th, 2010 in Dubai Property
The Telegraph has unearthed what looks like proof that Hamid Karzai and other senior members of his family, who are also in high ranking positions in the Afghan government or business world have been complicit in the misappropriation of funds given as aid for the impoverished Afghan state.
Afghanistan relies on international aid to pay for more than 50% of public sector wages (including the NATO-backed and trained security forces), yet Karzai and several others have bought properties in Dubai worth millions of pounds.
The impressive portfolio includes 14 villas on Dubai’s premier development; Palm Jumeirah registered in the name of Sher Kahn Farnood, former chairman of Kabul Bank — former because he resigned last week upon orders to hand back the property. Farnood owns and occupies a “Signature” villa valued at £4 million or more.
The Bank — which is heavily implicated in the scandal, as will be explained in more detail — also owns an apartment, two business plots and — loss-making — airline, Pamir Airlines, in Dubai.
Kabul Bank is drenched in the scandal. For instance Mahmoud Karzai, the third largest stakeholder in the bank (and President Karzai’s brother) also owns a Signature Villa, and made £500,000 profit from the sale of a Dubai property which was purchased by a loan from the bank.
According to the Telegraph British ministers are privately furious about the misuse of funds. Well, not all of them are so private:
Adam Holloway, a Conservative member of the Commons defence committee, said: “A lot of people have become very rich on money that was supposed to help Afghanistan.”
On the other hand, another article in the Telegraph blog, by the same author Richard Spencer paints the affair in an entirely different light.
So Kabul Bank invested in foreign property? So did every other bank in the world! Okay, the investments should have gone in the bank’s name not Chairman Farnood, but it’s not like they used their depositors’ money, who have withdrawn 300 million USD in the last 2 weeks without the bank running out.
So those involved are all close to President Karzai, so what? Says Spencer, the links between big business and high government figures is much closer in the US’ allies in the Middle East than in Afghanistan. Look at Dubai where the supreme ruler owns the largest property companies, and has them run by his friends, the same goes for Abu Dhabi, and in Saudi Arabia the distinction between the Royal Family and the biggest corporations is practically none existent.
Those are some good points, but the question remains: where did all this money come from in such an impoverished country?
Mr Spencer closes with this:
“Perhaps if Britain forced Arab royal families to sell their Knightsbridge town houses and country estates, and invest the money in rebuilding Yemen and southern Saudi Arabia and a few other places I could mention, it would have more credibility in telling Mr Farnood he’s not allowed a villa in Dubai. Otherwise, why pick on Afghanistan?”
But Saudi Arabia’s money comes from oil revenues; any fraud involved in where and how that money is spent is Saudi Arabia and its population’s business. Given the impoverished state of Afghanistan and the amount of aid needed just to pay public sector wages, we have every right to demand prove that our aid was not used to fund such a lavish spending spree.
by Overseas Property Mall on Friday, September 3rd, 2010 in Dubai Property
An Austrian developer is to become the first to build on the famous come infamous Dubai World Islands — an archipelago of islands loosely matched to a map of the world; loosely in that the islands are in roughly the same place as the corresponding country on the map, but the islands are not shaped like the nations or cities they represent.
Developer Josef Kleindienst bought six of the islands in 2006, but delayed plans because of the market slump. The fact that he is building now, how he is building now and the success stories he is telling reporters could all become known as significant in a turnaround-of-fortunes for the luxury property sector in Dubai.
It is significant that the firm has reduced investments in countries like South Africa to start building in Dubai. Looking at reports of both property markets South Africa appears to have the most near-term potential, but apparently Kleindienst Group research disagrees, or at least sees more potential in Dubai than most of us do right now.
And, according to statements from Josef Kleindienst, CEO of the family-owned firm, their opening sales have vindicated this decision.
Kleindienst is building The Heart of Europe, including a replica European City, complete with solar-powered climate controlled raining street, a Beach Bar on Monte Carlo, and villas and a hotel on St Petersburg, Germany and Austria.
According to Kleidienst, 12 of the villas on Germany have been sold for between $1.9 million and $5.5 million each. Selling off plan properties in Dubai is incredibly difficult at the moment, but Kleidienst believes the uniqueness of the development will win the day.
“Dubai needs holiday homes,” Kleindienst, chief executive officer of family-owned Kleindienst Group, said in an interview on the island representing Germany. “If you look at the state of the Dubai market right now, I don’t see demand for properties besides holiday homes for many years.”
Kleidienst also said that While Nakheel “did everything they had to do contractually,” the company hasn’t gone ahead with plans to build infrastructure such as transport hubs that would have helped owners of individual islands move forward with construction, Kleindienst said.
In an emailed response to the press Nakheel said:
“All the necessary facilities remain part of the overall plan for The World development and will be available in accordance with the requirements of the development.”
Dubai developer AA Properties, owner of Taiwan is planning to construct villas and houses there later this year, according to statements from the company.
Kleidienst believes that his development, if successful will spur others to start developing on the islands.
“They are watching us to see if we are able to earn money out there,” he said. “The moment they see that we are successful, they will follow.”
Analysts are mixed in their predictions of that success:
Deutsche Bank AG analyst Nabil Ahmed agrees that the uniqueness of the project could be a differentiating factor in its having success while other developments in Dubai falter, he said:
“Occupancy rates in Dubai hotels are pretty low right now and there are a lot of vacancies,” said. “But if you are a billionaire and you want to rent a top-end, very large luxury villa on your own island for a couple of weeks, I don’t believe there is that kind of product in the market.”
Meanwhile Dubai based analyst Martin Kohlhase believes the development will not do any better than those around it:
“The World is probably closely correlated with what happens in consumer sentiment and the real estate market in the Emirates. Given that we don’t expect a revival for the next 12 to 18 months, I think it’s unlikely there will be a revival of The World project,” he said.
One thing is certain, the world will be watching the world very closely, and success for Kleindienst could lead to success for the world.
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