Tag Archives: Research

Property investors upbeat

Investors are upbeat on UAE real estate as demand for residential and commercial space is expected to remain strong in the coming years with new projects coming into the market, according to new reports.

Leading fund managers, property consultants and executives said demand for real estate projects will increase as the economy improves, population figures rise and tourism increases.

Al Masah Capital, an alternative asset manager, said Dubai’s real estate market is ripe for investment as it enjoyed good growth in the residential and hospitality segments last year.

“Residential development continued to remain high in Dubai on higher sales prices, while the hospitality segment remained robust through the year with a rise in daily and occupancy rates,” the Cayman Islands-based company with an office in Dubai said in its Mena – Alternative Investment Strategy 2013 report.

In another report, Business Monitor International, or BMI, said government-backed investments, especially in transport infrastructure, will support the UAE’s real estate sector as well as the construction sector. In its first-quarter report on UAE real estate, BMI said a clear regulatory environment and governing of private investments in real estate create a favourable investment climate.

“The UAE benefits from its strategic importance in the GCC and of the strategic importance of the region to the world. Regional unrest has benefited the emirates as they are seen as much safer than their neighbours,” the BMI report said.

Referring to a recent survey conducted by real estate consultants Cluttons placing Dubai as the most attractive destination to most private investors, Al Masah Capital’s report said the real estate market in Dubai is to be driven mainly by residential and hospitality segments in 2013. Recent projects, launched by major property developers including Emaar and Damac, sold out on its launch days, indicating the recovery in the sector. Damac managing director Ziad El Chaar said Dubai’s real estate sector recorded around 10 per cent growth in 2012 and this is likely to further accelerate this year.

Michael Lahyani, founder and chief executive of leading UAE portal propertyfinder.ae, expressed similar views and said the real estate sector has witnessed a strong start in first quarter of this year.

“The strengthening fiscal environment in Europe, along with the political instability in the Middle East is pushing more and more people towards Dubai, renowned for its tax haven and secure environment,” he said.

“Dubai continues to lead the way, with ever popular locations such as Dubai Marina, Downtown Dubai and Palm Jumeirah being joined by relatively new developments like Jumeirah Village Circle. The outlook for the rest of the year remains positive with demand is expected to remain strong with new projects coming on to the market,” Lahyani told Khaleej Times.

Shailesh Dash, chief executive of Al Masah Capital, said projects like Mohammed bin Rashid City show that Dubai has recovered its swagger and the renowned confidence allows for them to start dreaming again. “We do believe that the implementation of these new projects will be done according to the demands of the market as well as the prevailing credit and cash conditions which are far different from 2007.”

The BMI report also cautioned that limited supply of credit affects project finance. “Our core view for the UAE is that the economy and real estate sector will experience relatively moderate levels of growth over the coming decade,” it said.

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!

Dubai Marina is a great place for investment

Top Tips For The First-Time UAE Real Estate Buyer

Buying real estate overseas, especially for the first time, can be a daunting prospect, but who hasn’t aspired to owning their own home or apartment in the sun? The monumental investment indicates that you’ve accomplished your financial goals and are looking forward to a life of security. When you buy a property in the United Arab Emirates (UAE), that security is taken a notch higher with visions of a luxurious life in sumptuously designed apartments or high-end hotel penthouses. Whether you’re looking to live a lavish life in an apartment or a penthouse, you’ll want to ensure your property investment is the right one.

While there are many laws designed to protect real estate buyers in the UAE, it still pays to do your due diligence to avoid any problems. Here are our top tips to consider when you’re looking to buy UAE real estate property.

Clarity

Transact with the actual owner or the official broker. You want to be able to deal with people who either own the property or have a legal standing to sell the property. Make sure that you are communicating with the right people before you even visit the property or make further inquiries  When you’re looking at real estate development, ensure that the developer and the project are registered with the relevant local government agency and can supply you with details of Escrow accounts, and agreements with the main contractor.

Research

Take your time. Consider the market value against the location and potential growth of the area. This will help you buy an apartment or a villa at the best possible price, with a potential for considerable profits when you decide to resell it in the future. Bloomberg Businessweek reported that the UAE real estate market has been experiencing falling property values by 65 percent during its four-year turn. But the glamorous emirate is seeing strong signs of recovery as prices for residential properties in the Burj Khalifa and Marina area shoot up 15 percent in 2012 alone.

Use Experts

Get the expertise of a surveyor when inspecting the property you want to buy. This will allow you to have a better idea of the property’s actual value, and not its projected market value.

Read

And finally, always read the contract before you sign it. If you’re able to, get a lawyer to look at it to make sure that everything is as you expect before you step in.

Buying property in the UAE is a great accomplishment. Ensure your financial security by making the right property purchase. Consider these tips and find your dream home today.

 

Follow us on Twitter for more great tips for buying in Dubai.

UAE Construction Sector Set for Growth in 2013 as Increase in Middle East’s HNWI’s Drives Investment

The construction sector in the Middle East is expected to grow again this year, providing a significant boost to the countries non-oil contribution to GDP, the latest report from KFH-Research suggests.

Analysts stated that industrial production will ‘improve gradually’, but the non-oil sector will be ‘more significant.

All signs point to a resurgence in the real estate market, particularly in the well-developed luxury areas within Dubai. 2012 saw the most growth in pricing across the board in more than four years.

“We forecast moderate economic growth for the UAE, at three percent in 2012, conservatively lower than the Central Bank’s forecast that growth maybe exceeding 3.5 percent,” KFH-Research said.

The strength in the market is supported by the growth of HNMI’s in the Middle East who are again looking to the property asset classes as a means of secure long-term capital growth.

The report showed that in the Middle East, the number of HNWI’s has increased by 2.7 percent year-on-year to 450,000. Total financial wealth of the Middle East HNWI’s grew by 0.7% year-on-year to US$ 1.7 trillion.

It is thought there are around one million wealthy households in the GCC region, with total investable assets of between US$ one trillion to US$ 1.2 trillion. Of these, around 260,000 to 280,000 households have total assets of more than US$ one million in each household.

By country, Saudi Arabia has the most number of wealthy households, estimated between 600,000 and 625,000, followed by the UAE (200,000-220,000) and Kuwait (120,000-130,000). Naturally, Saudi Arabia also has the highest total investable assets in the region, estimated at US$ 500 billion to US$ 550 billion, followed by the UAE (US$ 260 billion to US$ 280 billion) and Kuwait (US$ 140 billion to US$ 150 billion).

As the wealth of the GCC high spenders increases again we expect to see further investment in the Dubai property market, which is considered a safe haven within the region and secure place for investment. This will support the continued growth in the luxury sector of the market, with serviced hotel apartments a prime investment opportunity for those looking to own a high-end, well serviced property and the flexibility of earning rental returns while they are not living in the apartment.

What impact do you see on the Dubai Property Market in 2013? What is your own personal experience of the price rises seen over the past 12 months? We would love to hear from you in the comments section below, or joining us on Twitter, @dxbpropinvest

Dubai Property Market – 2013 Outlook

As we turn the corner into the home straight of 2012, www.dubaipropertyinvest.com dusted off its crystal ball and took a look at what to expect in the Dubai property market in 2013.

Recent announcements by the Dubai Government are an additional fillip to a market which has seen sustained and improved growth throughout 2012.

That key word we keep talking about here: Confidence is again riding high (hopefully not too high) and the market is more stable than it has been in the past three to four years.

Executives are starting to think about the direction of the market in Dubai and lay out their plans for the coming year, and supporting that with investment.

Ziad Al Chaar, DAMAC Properties Managing Director, told us that growth is sustainable in the near future, if you know where to look: “2012 has delivered on our predictions at the start of the year – prices in the Dubai market steadily grew with each quarter outperforming the last. In 2013 buyers will definitely be able to benefit from this capital growth, but will need to be very savvy about where they invest and in which projects in each area.”

And this is a key element. While we often look at numbers and data across the board in Dubai, the market remains fragmented with some areas driving premium prices and others yet to fire into action. This creates opportunity for investment, but new clients to the market should be careful and do their research.

Look for the areas where the Government have committed to infrastructure investment over 2013 to provide a guide to where the latest projects will not only be completed in good time, but where services will also be close to hand.

“Encouragingly, there are indications that some of the lessons of the last real estate crisis have been learned,” said Jones Lang LaSalle in its latest look at the Dubai market.

“This is still Dubai and it is as ambitious as ever but we are also seeing a more mature and considered approach which is only going to benefit the long term health and credibility of the real estate sector amongst domestic and international investors and stakeholders,” added Alan Robertson, chief executive officer, of Jones Lang LaSalle in the Middle East and North Africa.

This more stable take on development should hold Dubai in good stead through 2013 with job opportunities created as the cranes swing back into action. There will also be a host of projects actually coming on line next year from developers who focused on delivery rather than new announcements over the past couple of years.

Next year could turn out to be one of the most consistent of recent years. We expect to see less erratic movement in prices across the twelve months with a steady climb of 4-5% per quarter in the most sought after locations.

Do you agree with our assessment of what is to come in 2013? We would love to hear from you in the comments section below, or joining us on Twitter, @dxbpropinvest.

Dubai’s Economic Recovery Drives Forward

Senior officials within the Dubai government are reaffirming the emirates growth estimates with renewed forecasts outstripping projections made prior to the downturn in 2008.

The government says nominal growth domestic product will hit AED490 billion (US$133 billion) by 2015, up from AED367 billion in 2011, with Dubai averaging real growth of 4.5 – 5% a year through 2015.

In 2007, Sheikh Mohammed bin Rashid Al Maktoum targeted a GDP of US$108 billion for 2015.

“Dubai’s economy is well diversified and resilient to external as well as domestic shocks,” said Sami al-Qamzi, director general of Dubai’s department of economic development. “We think that growth will be more sustainable, albeit at a more moderate pace than in previous years.”

Given the Dubai property  market is so closely tied to the overall economy, a further recovery in the real estate sector would allow Dubai to return to its pre-2008 strategy of raising cash through land sales.

The economy minister, Sultan al-Mansoori, says the UAE is also introducing laws to boost investor confidence and better provide for its nationals. The country is also working finalise a companies’ law, which will open up some sectors to 100% foreign ownership.

There appears to more bullish tone from the Dubai government with the traditional revenue streams from trade, tourism and transportation have now been followed by the signs of recovery in real estate and construction.

Confidence has grown since the Arab Spring restored Dubai’s status as a regional haven, prompting a tourism revival with arrivals up another 10% in the first half of 2012.

While the recovery remains relatively slow, it is also returning at a stronger and more stable pace, allowing companies to built their operations for the medium to long term wit a renewed confidence.

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

Is there a two-tier Dubai Property Market?

Prime locations throughout Dubai, including Downtown Dubai, Palm Jumeirah and Dubai Marina are driving the rental markets with growth around five percent in Q3 alone, says CB Richard Ellis.

The latest report from the global real estate firm shows that demand in key areas remains strong, but that there is still good value in other locations throughout the Emirate.

This is a further proof point that Dubai is seeing a two-tier property market with areas which have completed infrastructure and facilities seeing strong growth and areas still under development experiencing high vacancy rates.
The report stated that rents were now “fixed on an upward path in the majority of sub-markets”.

Data for the year to date also continues to show a sharp incline in activity with the value of all residential transactions at AED 10.3 billion, compared to just AED 6.9 billion for the same period in 2011.

You only need to take a drive around the city to see cranes moving again, traffic delays and a generally more confident air. Recruitment is currently strong, we are entering the peak tourism period and new off-plan developments are reporting strong uptake in early purchases.

Indeed, the growth in the market has generated stories of the return of the speculator. While most developers are trying to play down the return to a boom and bust real estate economy and focus more on ‘steady and consistent growth’, there are certainly international investors coming back into the market in a big way, as they see the turning point in the market.

The increased liquidity in the market in general is going to allow developers and government contractors to move quickly in areas still under development and this is where we see the greatest opportunity to the investor.

In areas such as Jumeirah Lakes Towers and Arabian Ranches where roads and shops are currently under construction, prices remain highly competitive. An investment now will create the greatest opportunity for capital growth as projects complete and an increase in population fills the vacant apartments.

It is good to be talking positively about the Dubai property market again and while we have to keep a check on over-talking the market into an unrealistic position, there are clearly signs of revival.

While traditional powerhouses in Europe, America, and even China to some extent, struggles to break free from global austerity measures brought in to deal with the downturn, Dubai is much more nimble  and able to recover much quicker. International investors seem to recognize that and are moving fast to place their money here.

Are you getting back into the market, or is it too much too soon? 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

Dubai Property Market outperforms Singapore, London and Hong Kong

The Dubai property market has been performing strongly during the first half of the year, with prime rents increasing 3.3% during the first half of 2012.

The latest report from the one of the world’s largest privately owned property companies, Knight Frank, says that Dubai is ninth in the Prime Global Rental Index, which was released this weekend.

The emirate outperformed the likes of Singapore, Geneva, London and Hong Kong over the same period the report added.

In a further sign that the luxury rental market is picking up pace, the index also shows that rents had risen by two percent in the second quarter of 2012 alone.

The global report showed that the top performing city was Nairobi in Kenya where rents had shot up more than 17 percent in the first half of the year and five percent in Q2.

While the numbers only reflect the first half of the year, it is a further sign which shows that the Dubai property market is not only growing again, but it is outstripping many more established cities around the world.

Knight Frank adds that a surge in foreign investment into the world’s developing markets will ensure that the likes of Dubai continue to perform strongly in the medium term.

Another signal in the report which could hint at Dubai’s continued growth is at the bottom of the list. Manama, the capital of Bahrain has seen prices drop back 18 percent in the last year although that rate slowed off significantly in Q2 (down just 0.2 percent).

The protests in other Middle East countries could be encouraging regional investors to move their money to the safe haven of Dubai.

As Dubai’s property market continues to receive reassurance from all quarters are you now looking to get back in to the real estate sector? How has your portfolio performed over the past year? Are the more positive signs in the market being reflected in reality?

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