Tag Archives: Data

Dubai Marina is a great place for investment

Dubai Still Sits Pretty Among the World’s Super Rich

Dubai remains one of the favourite cities in the world for the rich and famous, according to the latest research.

The Emirate is listed in the top ten countries which wealth expert felt their clients considered the most important. Of those with more than US$ 30 million in wealth, Dubai came seventh, just behind the likes of London, New York, Singapore, Hong Kong, Geneva and Shanghai.

The detailed annual report suggests that it is the real estate market which has driven the increase in confidence of the rich and famous. It says: ‘Dubai (Property Market) has recovered some of its popularity with Russians, but competition from North Africa, Pakistan, India and Iran has been an important factor in helping to drive process higher this year.

In fact, the report goes on to show that Dubai’s increase in valuations at around 20% is the second highest in the world, behind only Bali in Indonesia. Analysts praise the turnaround in the Dubai property market by stating that the Emirate has gone from: ‘the epitome of the global downturn between 2008 and 2009’, to rebounding spectacularly in 2012 ‘on the back of resurgence in demand.

The main reasons for the return to favour of the worlds most influential HNWI’s (High Net Worth Individuals) was the strategic location linking the East and the West and its position as a safe haven in the region.

Bang for your Buck

The report went on to highlight just how much physical real estate you can get for your cash in each respective city – and in Dubai we do pretty well. For a US$ 1 million investment you can expect to be given around 168 square metres. Doesn’t sound much? Well head to Monaco (16 square metres) or London (23 square metres) and you soon realize that very few cities can match Dubai even for value.

But are these global investors looking at Dubai as a quick win city, where they can ride the second wave, make some tax-free cash and get out before the next collapse? Apparently not. The report asked which cities would be most important to the clients of wealth investors in ten years time, and Dubai still ranked in the top ten in the world! 

This is one of the most important pieces of information in here … for those of us looking to invest in the Dubai property market, as it clearly shows that the uber rich are involved in Dubai for the long-term, they are here to stay. And that injection of liquidity into the market will ensure that Dubai remains not just the leader in the Middle East for property investment, but increasingly on the world stage.

Do you agree? Let us know your thoughts on the report. Follow us on Twitter and join the debate!

UAE-based Bank Reiterates Strength of Dubai Property Market

The Dubai Property market is continuing to grow in line with the wider economic recovery in the Emirate, according to a report out from Citi.

Stronger visitor numbers, and strength in the retail markets is filtering through to the real estate sector says the report, with stronger trade and higher oil prices a key factor in the growth.

The report goes on to say that Dubai has actually benefited from what it calls a ‘misfortune dividend’ where investors have turned to safe havens in a response to the Arab Spring.

Citi’s chief economist Farouk Sousa quoted figures from Cluttons which showed that mid-range properties have increased in value by 20% over the last year.

“This is below the 30%-40% annual gain in property prices during the pre-2009 boom but, according to CBRE, represents one of the sharpest gains in the property sector anywhere globally this year,” he said.

The banks have a critical role to play in the continued resurgence of the markets by providing liquidity to not only end-users, but also contractors and developers.

City says that the increased investment in property in Dubai is allowing real estate companies begin to strengthen their balance sheets and improve credit ratings to be able to refinance loans.

Sousa also added that the recovery has been experienced mainly in prime locations, but that there was still an overhang of supply in both residential and commercial markets.

“Our own estimates suggest that the current stock of housing exceeds demand by some 50,000 units (15% of total supply),” he said.

While current stock may well outstrip the demand in the market in developing areas, these developments will quickly be filled by the growth in the population and the strong increase of expatriates coming to Dubai in the wake of the prolonged European and American economic crisis.

Are you receiving a warmer welcome from your banks? Is nit easier to get mortgages now than a year ago? We would love to hear your thoughts on this and any other news on Dubai Property Invest. And don’t forget to also join us on Twitter @dxbpropinvest

UAE Prosperity Has Direct Impact on Dubai Property Market

The UAE has just been listed as the most prosperous nation in the Middle East and North Africa (MENA) in a report that looks at social and economic well-being.

The 2012 Legatum Institute Prosperity Index placed the UAE 29th in the world, out of a total of 142 countries which were assessed. The next country from the MENA in the rankings was Kuwait in 38th followed by KSA in 52nd.

As the UAE continues to grow in the eyes of the international community, more attention will be drawn back to the Dubai property market which has proved an integral component of the emirates perception around the world. As the market grows, the more favourably Dubai is seen by the global community, and vice-versa.

For a country with a current population of just eight million it is a great achievement to grow in the league tables so dramatically and in such a short period of time.

The economy of the country was the most favourable with a ranking of 17th in the world. Given this, HSBC’s Senior Economist Simon Williams told Gulf News that the UAE still has a way to go: “Given that the UAE has one of the wealthiest GDP’s per capita in the world, this tells you how far the UAE has to go to close the gap between potential and reality.”

Pretty stark words, but a reflection that while Dubai and the UAE has achieved a great deal in its 40 year existence it is not sitting on its laurels and there is still a way to go to realise the opportunities which are abound.

As the economies of the east and the west come closer together, Dubai as a regional hub and influential trading stop off will have ever more international influence.

All of this drives what is still a relatively immature property market and will continue to attract more overseas investment.

The report also shed light on to the UAE’s entrepreneurship opportunities, ranking the country in 30th place, 41st for governance, 37th for education, 32nd in health services and 42nd in social capital which looks at the family and society support.

On a more macro perspective the countries in the MENA region improved their performance in the Entrepreneurship and Opportunity sub-index over the last three years, with the second largest improvement behind Asia.

The report concluded by stating that the improvements: “are partly due to a decrease in start-up costs [which] have decreased throughout the [MENA] region.”

Do reports matter? Where can the UAE realistically hope to be on the chart in five years? We would love to hear your thoughts on this and any other news on Dubai Property Invest. And don’t forget to also join us on Twitter @dxbpropinvest

Top Five Reasons for Dubai Property Market Resurgence

Top Five reasons for the Dubai Property Market recovery

As the Dubai Property Market continues to go from strength to strength, we take a look at the top five reasons why Real Estate in the UAE is seeing a powerful resurgence.

Following the correction in prices back in 2008, the market has slowly improved with 2012 seeing the most impressive growth – around 10-12% in some of the more desirable areas according to recent reports.

There remains a great deal of growth still to come as infrastructure is completed and the influx of foreign investment and foreign workers drives the market.

1.    Increased Liquidity

The Dubai economy remains on a strong recovery path with Gross Domestic Product projected to grow by 4.5% in 2012. This performance is being driven by the strong growth of key sectors such as tourism, commerce, retail, hospitality and logistics.

Banks are now providing funding again – not just for investors in the form of mortgages as low as 3.99% – but also to contractors and developers.

As developers receive funding as well as deposits and further payments on projects they will be able to continue building at pace. Liquidity is the key driver of the Dubai Property market and the banks need to continue to make funding available at all levels to ensure that the current recovery remains on track, at a steady pace.

2.    Comprehensive infrastructure investment

The Dubai Government is again investing heavily in an infrastructure programme, with Dubai World Central spending US$ 4.6 billion on infrastructure alone and terminal two of Jebel Ali Port passed halfway and set for completion next year.

As road networks, schools, hospitals and shopping malls also complete in the new areas of Dubai, investment in the real estate projects will continue to come in. There are many good prices to be achieved in the less developed areas of Dubai which are certain to grow in the coming years as the infrastructure network is finished.

3.    New Job Creation

Nearly one million new jobs are expected to be created before the end of 2020 according to the Dubai Government. As Dubai continues to grow and generate new opportunities, the demand for quality housing will remain. Jones Lang La Salle predicts that around 50,000 additional residential units are expected to be delivered by 2014.

With Europe and America still feeling the effects of a global recession, many ex-pats are looking to Dubai as a place to extend their career opportunities.

According to Hasnain Qazi, Middle East Business Manager at Huxley Associates, “Dubai has evolved into a lifestyle destination of choice for people all over the world looking for a safe, secure, vibrant, cosmopolitan city to live in, providing tax free income and a high standard of living. This is quite a contrast to many other countries in the world where economic and social conditions are not as rosy.”

 4.    Transparency and regulation

The Real Estate Regulatory Agency (RERA) is launching a new service fees index in this month which aims at regulating service fees, reducing disputes about service charges and increasing transparency in the market.

Following the release of the draft investor protection law in Q2, the Dubai Land Department has released a draft Code of Corporate Governance for Developers. The Code defines the responsibilities of developers and requires them to disclose to investors complete information about their properties, including alternatives in case of potential delays. The Code’s ultimate goal is ensuring more transparency and better regulation of the real estate market.

Further regulations ensure that all lease contracts are registered through a government database and all transactions with the Land Department go through a centralised listing site for available property, all of which prompted DAMAC Properties to recently call Dubai’s property market as one of the most regulated in the world.

“DAMAC Properties welcomes recent moves by the Dubai government to tighten regulation in the property market which we believe will sort out the wheat from the chaff,” said Niall McLoughlin, Senior Vice President, DAMAC Properties. “As the market in Dubai recovers strongly, it is important to have clear legislation which will instill confidence in overseas investors in particular.”

5.    Confidence

Investors believe in the Dubai Property market again. Government, banks and developers have worked hard over the past few years to bring back the belief in the growth potential of the market. Cityscape Global this year was a case in point with companies talking confidently about the prospects for the future and bringing back projects which had previously been shelved.

All markets, both financial and real estate are driven by consumer confidence and a return to the belief that Dubai is a thriving international hub will see clients returning in big numbers.

What do you think of our top five list? What have we missed? We would love to hear your thoughts on this and any other news on Dubai Property Invest. And don’t forget to also join us on Twitter @dxbpropinvest

Family enjoying serviced apartments in Dubai

Dubai Hotel Rates on the rise

Dubai hotel room rates continued to rise in July despite a fall off of occupancy during the summer and Ramadan.

According to the latest HotStats survey of full service hotels by TRI Hospitality Consulting the average room rate in Dubai and Abu Dhabi increased by 6.4 per cent to US$188.51 in July 2012, compared to the same period in June.

However, occupancy levels in Dubai fell 11 percent to 70 percent during the same period the report stated.

Dubai Statistics Centre has also recently reported that nearly four million guests stayed in Dubai hotels in the first six months of this year.

There are currently 577 hotels in with the total number of rooms and serviced apartments at 75,171 according to Dubai Tourism and Commerce Marketing (DTCM).

The hotel industry in Dubai is worth US$10.9 billion according to DTCM and is a driver in attracting international tourists and businesses to the Emirate.

Individual investors who traditionally have turned to the Dubai property market have been looking to tap into the hotel sector for a while, but the price point and heavy competition from international chains has made this impossible for all but the very wealthy.

Despite the large number of luxury hotels in Dubai, there are just 200 serviced apartment buildings. This is one area, however, where investors can purchase an apartment within the complex and either rent it themselves or hand it to a management company who will rent it as part of a pool.

Many of Dubai’s tourists come from the GCC where the number of family members is quite high relative to the international average. These families are often looking for more of a homely feel when travelling, instead of paying through the roof for three or four hotel rooms.

The number of serviced apartments is set to grow in the coming years as demand for five-star luxury within a private space increases. DAMAC Properties is already looking to diversify into this area and have stated that they will have 4,000 rooms under development for management by its DAMAC Suites & Spa arm by the end of next year.

Its first serviced apartment building, Burjside Boulevard, will handover in Q1 2013.

As more tourists flock to Dubai – Dubai International airport welcomed nearly 28 million passengers in the first six months of 2012 – demand for hotel accommodation, and the opportunities to invest in this sector will only increase.

To buy or not to buy? Dubai is the question.

As the Dubai property market sees encouraging signs that prices are returning, is it the right time and opportunity to move from a rental property and purchase your own home in Dubai?

As property prices increase, so do rental yields. This is great for investors who can capitalize on extra income, but is it also an opportunity for tenants to purchase property for themselves.

Financial institutions are starting to put liquidity back into the Dubai property market and RERA, the Government Department in charge of legislating the purchase of property has relaxed rules for overseas investors.

So, should we make the big step? Well, consider how much you spend a year on your annual rent in Dubai, with the likelyhood of a 5% increase year on year.

This could well cover the mortgage payments on the same property and you would own it out right within ten to fifteen years. In addition to the fact you would be using your accommodation allowance to buy out your own property, you will also benefit from the growth you could see in the valuation of the proprety.

At the moment your rent goes to a landlord and funds your living year on year. By purchasing now, even if the property did lower in value for a short period, will it drop by the same amount you would have spent in rent? If not, you would still be better off buying?

Also, there are many serviced apartments coming onto the Dubai property market in the next few months which will allow you to live there for as long as you like while receiving the five-star luxury service that comes with it, but the management company would also rent out your property on your behalf should you decide to take a couple of months away, or return permanently back home.

Certainly the financial benefits of buying over renting prove attractive and now that banks are starting to offer finance deals again, the proposition becomes even more attractive.

If you are reading this from outside Dubai; in the UK, India, Russia or USA maybe, how are your investments performing? What are the current interest rates? What has happened to the value of your home? Is it time to look towards your future by investing in a city which is showing strong returns on property investment?

Are you thinking of buying your own place in Dubai? What excited you about having your own property in one of the fastest growing cities in the world? It it the right time to step into the Dubai property market? We would love to hear your comments by posting about the Dubai property market below or you can email us at editor@dubaipropertyinvest.com

Marina Terrace in Dubai Marina

DAMAC Properties Reports Dubai Real Estate Market is on Road to Recovery

Covergae in Khaleej Times 28 August 2012

DAMAC Properties interview with Khaleej Times

One of the largest developers in the Middle East has told Khaleej Times this morning that the Dubai real estate market is on track and expected to see ‘an increase in valuations throughout the rest of the year and into 2013’.

DAMAC Properties Senior Vice President, Niall McLoughlin, said that ‘many areas have already recovered. Prices have stabilised last year and have continued to grow at a steady pace in 2012. Prime real estate areas such as Dubai Marina, Sheikh Zayed Road and the Burj Area are performing strongly as the infrastructure is in place and demand is high.’

As a resident of Dubai for more than five years it is clear to see that the cranes are moving again, towers are growing, floors are being added and more projects are reaching handover stage.

Over the past few years and since the 2008/09 dip there was a period of cynicism with residents and international investors, many who had had their fingers burned, reluctant to accept the commentary of developers who were trying to inject life back into the market.

However with Emaar, Nakeel and Aldar returning to profit and the Land Department announcing the highest number of unit sales and unit value recorded during any July on record, is it time to recognise that Dubai is a strong investment opportunity again?

People are already telling me that if I don’t buy into the market now I will be left behind (again) and projects will be out of my price bracket.

I think the key is to invest in the Dubai property market for the long-term, not the short term ‘flip and win’.

If you are looking at an investment in a prime area such as Dubai Marina or the Burj Area, prices are almost certainly going to grow as the popularity of these areas drives demand. Rental prices are already pushing past the standard 5% pa and while there remains good supply in other areas, people will still want to live in the luxurious areas. The positive comments from DAMAC Properties come on the back of two recent independent reports both pointing to an upward turn in Dubai’s property market valuations.

Knight Frank reported that Dubai’s prime property had seen growth of nearly six per cent in the first half of this year.

According to the report Dubai remains in the top performing 15 cities worldwide and number one in the Middle East throughout Q2 with buoyant Asian markets and resurgence in the main European capitals providing a stimulus for growth.

In a sign of further support to the sentiment that Dubai’s real estate market is on its way back to former glories, a report by Asteco stated average apartment sales prices had increased between eight to nine per cent from Q1 – Q2 2012 in key locations including Dubai Marina and Downtown Dubai.

Foreign Investors Return to Dubai’s Property Market

Foreign investors are returning to the Dubai property market in strong numbers, with the publication in the last week of a report which shows that AED 22 billion of overseas money was injected into the market in the first six months of this year.

Dubai’s Land Department revealed that 12,875 properties, made up of buildings, land, apartments, and residential villas changed hands.

Buyers from India, with a population of more than a billion, were perhaps not surprisingly the heaviest investors purchasing 2,153 properties at a total value of AED 3.75 billion.

With a relaxing in the laws pertaining to foreign investment in the Dubai property market and some great offers on price per square metre at the moment, investors are showing a keen interest.

More than half of the investment came from investors from the GCC, making up AED 12 billion of the total, with Emiratis topping the list of those taking apartments.

With independent reports over the past month reporting growth of anything from 5-9% across Dubai, is it time to say that Dubai’s property market is storming back? While there is still a way to go until we reach the numbers of 2007/8, it is clearly a brighter picture which shows that confidence is returning from investors all over the world.

What are your thoughts on the current state of play in the Dubai property market? Are you an investor thinking of buying now, or is the rental market still attractive.