Dubai Rent and Property Information

Rents deliver a knockout blow

2007-11-06T19:04:00.000+04:00

UAE residents are reaching breaking point over the country's mounting rents. In an effort to cut costs, people are moving to cheaper homes, sending their family home or changing their lifestyle. Some have even considered turning their backs on the UAE.

Almost a third of respondents to a survey on UAE accommodation said rent increases have forced them to move out of their home in the past 12 months, while two thirds said the general cost of living has made them consider abandoning the country altogether.

Responding to a YouGov survey commissioned by Gulf News, 64 per cent of Asians said they have considered leaving for good, compared to 70 per cent of Arab expats and 74 per cent of Westerners. Even a quarter of Emirati respondents said they have thought about turning their back on the UAE and 30 per cent said they have been forced to move house within the country in the past 12 months.

The overall response suggests that unless the inflated cost of UAE living is addressed, an exodus is a worse case, but realistic, scenario. The YouGov survey was based on 513 respondents with a representative sample from each nationality grouping, 59 per cent living in Dubai, 20 per cent in Sharjah and 14 per cent in Abu Dhabi.

The figures show that rent is by far the primary cause of residents' concerns. 70 per cent of those renting said they have contemplated leaving, compared to 43 per cent of home owners. When asked whether increasing rents have led them to this view, as opposed to price inflation of other living costs, more than half of all respondents said yes. Almost one in five said they have moved to another emirate, a figure which suggests some success in northern emirates' efforts to bill themselves as a cheap alternative to Dubai. Although some residents will go as far as moving house or leaving the UAE, most will try to adapt their lifestyle to accommodate the cost of renting accommodation. Asked what options they would seek if rent becomes too much to bear, a third said they would move to a smaller home. The response indicates strong demand for low-cost studios and one- or two-bedroom flats - an undersupplied sector of the housing market which real estate developers are only now beginning to turn to. Around a third of all respondents said they would consider moving out of city centres, 26 per cent said they would cut expenditure on other things and 20 per cent said they would share with other people.

The statistic reveals that some people who arrived in the UAE expecting to live a high standard of life in good quality city accommodation are being disappointed. For those with large families, the cost of rent can be much more than just a financial burden. The survey revealed that some families are being broken up as a result of rent increases. 15 per cent of all respondents said they have been forced to send their family back to their home country. Cases of split families were more frequent among Asian respondents (23 per cent) than Westerners (3 per cent), Emiratis (14 per cent) and other Arabs (14 per cent). A break-down of residents' monthly expenses reveals the extent of the rental burden. A staggering one in every five respondents pays more than half of their monthly income on rent. Expat Arabs (19 per cent) and Asians (14 per cent) are the most likely nationalities to do this. One of the main options to paying high rents is to buy property. The survey reveals that this is one the key driver in encouraging people to buy with one in four saying they have bought to avoid renting -good news for the mortgage market. Emiratis are the most likely to do so, perhaps indicating that they are in the best position to buy. In terms of property ownership, close to nine in ten respondents rent their home and of those who own, 57 per cent own outright while the remaining 47 per cent have a loan/mortgage against it.

To combat UAE rental inflation, all seven emirates have introduced caps on rent increases for renewed tenancies. According to the results of the YouGov survey, residents have mixed feeling on the move's effectiveness. Only 9 per cent said they have been very effective, 40 per cent considered the move slightly effective and 41 per cent viewed them as slightly or very ineffective. The mode rent cap recommended is 5 per cent per year. Key to residents' doubts over caps could be a tendency among landlords to evict tenants whose contracts are up for renewal, allowing the landlord to negotiate a rent with a new tenant, which would not be restricted by the cap - a trend which the UAE is tackling. Despite governmental intervention in the rental market, three quarters of respondents called on it to play a stronger role in controlling rate increases. Unsurprisingly, 80 per cent of those renting were in favour of stronger government intervention, compared to just 57 per cent of those who own (and perhaps rent out) property - a sign that landlords prefer rental rates to be dictated by market forces.
Looking ahead to next year, the outlook is grim among residents. More than eight in ten think rents will increase in 2008, with only four per cent expecting them to fall. Views are mixed among nationalities. Only 58 per cent of Emiratis expect a rent hike, compared to 95 per cent of westerners, 78 per cent of Asians and 77 per cent of Arab expats. The situation portrayed by the YouGov survey will not come as a surprise to the UAE population, but we now have the figures to support people's concerns. Residents are awaiting the country's response.

Source: GulfNews

Dubai rents set to soar 26.5%

2007-10-06T18:17:00.000+04:00

Tenants in Dubai have another two years of rocketing rental prices to look forward to before the housing market begins to subside, investment bank EFG-Hermes said on Tuesday.The cost of accommodation will soar between 10 and 15% this year and by up to 10% in 2008 before prices start to decline in 2009, the Egyptian firm said.“Supply in the residential property market is and will continue to be constrained in 2007,” Sana Kapadia, Research Analyst at EFG-Hermes, said in a statement.

“We predict that the peak year for supply will now be 2009 - meaning that the market is unlikely to see a price decline before this occurs.”

EFG-Hermes said Dubai’s real estate market has witnessed a far slower pace of completed project handovers so far in 2007, with approximately only 11,000 units of the expected 57,000 units coming on stream.

The investment banks said this has caused supply to continue to lag behind demand. This supply lag has led to revised housing unit supply forecasts for the next three to four years, with estimates of 25,000 housing units for the whole of 2007, 64,000 in 2008, and 68,000 in 2009, the firm said.

The effect of the delay in units coming on line is being compounded by population growth in Dubai.

EFG said that based on the assumption that the population of Dubai will rise to almost 1.9 million by 2010, up from 1.4 million currently, demand now calls for 45,000 to 50,000 new units per annum. The firm predicts prices will begin to fall in 2009, culminating in a decline of between 15 and 20% by 2011. However the extent of the price correction will depend on the pace at which new units are delivered, it said.

Authorities in Dubai are also pushing hard to bring down the cost of accommodation due to its affect on inflation. The UAE's inflation rate rose by a third last year to 9.3%, driven by the rising cost of accommodation.

The plummeting value of the US dollar, which the UAE and four other of the six GCC member states have their currencies pegged to, has also added to inflationary pressures by pushing up the cost of imports from places like Europe. The fall in the dollar forced Kuwait to depeg its dinar from the US currency in an effort to control inflation, and since then speculation has been rife that other GCC countries will follow suit.

The six GCC members - The UAE, Saudi Arabia, Bahrain, Kuwait, Qatar and Oman - all pegged their currencies to the dollar in a move set to pave the way for a single GCC currency by 2010 - a deadline that the GCC is looking more and more unlikely to meet.

Speculation reached fever pitch this week following the US Federal Reserve decision to cut interest rates for the first time in more than four years, forcing a number of Gulf countries to do the same. The UAE dirham held near a 5-year high on Monday as speculation Saudi Arabia might revalue its currency, which hit a new 21-year high against the dollar on Tuesday, spilled over into other Gulf Arab oil producers that also peg their currencies to the dollar. Dirham bids were as strong as 3.6685 per dollar, the strongest since November 2002.

Source: Arabian Business

Dubai moves to calm soaring rental prices

2007-10-04T20:20:00.000+04:00

The emirate will soon facilitate lands to develop low-cost housing for Dubai's middle class to tackle the current housing shortage and tame rent-related inflation, a top government official said on Tuesday.

Marwan Bin Galita, chief executive of the newly formed Real Estate Regulatory Agency (Rera), told Gulf News in an interview the agency was all set to finalise a three- to five-year tenancy agreement so that the tenants can tackle the rising rental costs.

"It will be a model tenancy agreement in which all the rights and privileges of the tenants will be reserved. We will ensure that everyone strictly adhere to the contracts," he said.

"The long term contracts will be transparent and fix the rents for that period and help the tenants in coping with rising rental costs."

However, these contracts may not be mandatory, but to help the consumers, he said. "We do not want to police the market, rather allow the market forces to reshape in a more professional manner. We will try to enforce this," he said.

Experts say a big part of the problem is that the demand for housing in the emirate remains significantly larger than what is available in the market.

Project delays have deprived the market of 300,000 housing units, according to Syed Ali Anwar, chief executive officer of 3D Venture Real Estate.

"These projects have been delayed by at least one year and will only be ready by December 2009. Some are facing construction delays because of rising material costs, others never got started after being announced," he said.

"The current demand is for 100,000 apartments but we include the number of people who will be coming to Dubai by 2009, then we will require 200,000 more units."

The continued economic growth means demand for housing units will continue to remain strong, says Bermak Besharaty, chief executive officer of Al Mas Capital, a company advising on real estate finance deals.

"There was some overbuilding in the luxury sector. There was not enough building in the middle and lower income segments. More developers are realising this."

To counter that, Rera is developing a comprehensive Real Estate Index to assess the market and make recommendations to the government on proposed regulations, said Bin Galita.

"We have began collecting data on the housing supplies and projected demand to complete the assessment which should be completed by the end of this year," he said.

Based on data, he said, Rera will make a set of recommendations to the Dubai government in which facilitating the low-cost housing would figure prominently.

"Dubai definitely needs to facilitate low-cost housing to support the middle class like any other cities and we will definitely recommend measures to facilitate this," he said.

"Already, a number of leading developers have come forward to launch low-cost housing schemes that will help tame the demand." Bin Galita also stressed that Dubai was in need for a property arbitration centre, he said.

"Although the number of rent disputes will reduce drastically once the long-term tenancy comes into effect, the time is right for Dubai to set up a property arbitration centre," he added. "The rent committee may not be enough to tackle everything."

Source: GulfNews

2007-10-04T20:17:00.001+04:00

800 new residents setting up home in Dubai every day

2007-10-04T17:41:00.000+04:00

House rents in Dubai, the single largest worry among the majority of the emirate's 1.3 million residents, will continue to appreciate in the coming years due to the influx of a whopping 292,000 new entrants - employees and residents every year, officials said yesterday.
Although the market showed signs of softening in recent past, the issuance of more than 800 work and residence visas per day will continue to push the demand upwards, they say.
At this rate, the population of Dubai is to grow at 22.46 per cent, doubling in about four years. The 44,000 new housing supplies in the UAE this year would be inadequate compared to the requirements.

While this might be a good news for investors, developers and landlords, it may not go down well with tenants who are struggling to make both ends meet, making life in Dubai dearer. Abu Dhabi scheme "Some apartment prices in the UAE have already settled in 2007 with a downward adjustment of close to 10 per cent. However, with increasing interest in Dubai as a business location, with inflation remaining high and interests rates remaining low for the foreseeable future coupled with an increase in mortgage business, we believe there is still a strong outlook for positive growth in the medium and long-term," Shahid Umerani of JAJ Consulting, told members of Dubai Quality Group yesterday. The indications come as an alarm bell to Dubai's marginalised middle income group, many of whom are either sending families back home or gradually moving to neighbouring emirates. This will also put pressures on companies' bottomlines as demand for salary hike is going to intensify in the coming months.
The rent cap has failed to make a dent in the alarming situation. Sensing this, Abu Dhabi yesterday announced a new housing scheme for bachelors with a capacity of up to 110,000 people, reflecting a shift in future demographics.

However, there could be ray of light at the end of the tunnel. "Rents would likely have to come down in the near term as they were getting out of reach of the majority of Dubai residents," the panel concluded. But the core property market still had room for healthy growth over the next few years, with no need for a major correction, they said. Key figures 292,000 new residents are entering Dubai every year22.46% is the rate of population growth in Dubai if this influx is taken into account 44,000 new housing units in the UAE this year would be inadequate to meet the demand.

Source: GulfNews

Dubai rents could fall in ’08

2007-10-04T17:37:00.001+04:00

Dubai’s residential rents, which have been on a relentless rally over the past five years, will start declining next year for the first time in a decade as more than 60,000 new housing units come into the market, analysts said.

The rate of increase of rents has already begun to slow. According to EFG-Hermes, Egypt’s largest investment bank, the decline in the pace of rental rate growth observed in the first eight months of this year will sustain into early 2008.

Residential rents across Dubai increased on an average by 16 per cent in the first eight months of this year compared to 30 per cent for the whole of 2006. This trend of slowing rental rate increases, according to analysts, is mainly due to a relief from Dubai’s seven per cent rent cap.
Predicting that the rent cap for 2008 will most likely be reduced to five per cent, an analyst at EFG-Hermes said the decline in the pace of rental rate growth observed in the first eight months of this year, therefore, expected to continue into early 2008, with rents starting to decline in 2008 as new housing comes onto the market.

Revising the bank’s housing unit supply forecast for the next three to four years, the analyst, Sana Kapadia, said due to a far slower pace of project handovers, only 11,000 units or 20 per cent of the expected 57,000 units are coming onstream in 2007 — meaning that supply continues to lag behind demand.

But in 2008, the supply will surge to 64,000 units, and 68,000 in 2009. “Based on the assumption that the population of Dubai will rise to almost 1.9 million by 2010, up from 1.4 million currently, demand now calls for 45,000 to 50,000 new units per annum.”
This means, by end- 2008, supply will outpace the demand.
EFG-Hermes also predicted that a fall in residential property prices, expected to happen in 2008, will now be delayed until 2009. “Supply in the residential property market is and will continue to be constrained in 2007. We predict that the peak year for supply will now be 2009. The market is unlikely to see a price decline before this occurs,” the analyst said.
According to market analysts, rents for luxury housing will fall at a faster pace as end-user demand for mid-income housing is higher than that for luxury housing, which has dominated delivered supply to date.

On the other hand, in the commercial property segment, rents and prices will continue to rise due to capacity limitations. “As Dubai continues to attract businesses from across the globe, we have seen continued pressure in terms of both rents and selling prices of commercial property over the past eight months. “Vacancy rates of around one per cent, in addition to pent-up demand from existing businesses and new tenants wishing to upgrade office premises has allowed rents to rise 40 per cent year to date on average. Prices for freehold office space have risen 17 per cent year to date.“This trend of a sustained increase both in terms of rents and selling prices stems from a prolonged lag in the completion of new commercial supply.”The analyst said with most of the commercial space additions expected to hit the market in 2008 and 2009, she expects to see a marked decline in rents. “As a result, we expect to see Dubai commercial property yields sliding back gradually toward the international average.”

Source: KhaleejTimes

The Soaring Residential Freehold Property Market

2007-10-04T17:23:00.000+04:00

In Dubai, the unprecedented influx of expatriate residents has proved the most si gnificant driver of demand for freehold housing. Annual population growth has hovered around an average of 10°/o for the last five years, and with a suggested 882,000 new jobs likely to be created under the Dubai Strategic Plan 2015, there is little chance of this growth rate slacking - estimates point to a total population of 1.9 million by 2010.

This huge demand has consistently outpaced the speed at which new residential properties have been completed. This has kept prices high, and given forei gn investors a major incentive to invest not just in property from Dubai's primary developers - Nakheel, Emaar and Dubai Properties – but also to undertake their own developments.

Estimates from EFG Hermes suggest that demand for residential units is in the range of 40,000-50,000 per year, with an increase of 270,000, to 530,000, by 2010. Yet with such a large number of units coming onto the market at any given time, and with so many different locations, types and styles of property, successful investment remains a challenge. You need the right information to choose between competing projects - information that has been carefully analyzed and projected well into the future to avoid nasty surprises - as well as access to properties that have been carefully scrutinized prior to sale.

Source: LandMark

Dubai property price boom draws towards an end

2007-09-30T18:07:00.000+04:00

Dubai has a demand for 40,000-50,000 residential units per year, with 69,000 units to be delivered in 2007, said EFG Hermes' 2006 forecast, a figure revised this autumn to 25,000.

More alarmingly the 2006 report said that in 2008 some 139,000 units were due to be handed over, although delivery dates next year were even more likely to slip than in 2007, as only 14 per cent of these units will be completed by large developers, compared with 75 per cent in 2007. The landmark EFG Hermes' 2006 report looking at property in the region found that a period of stability in 2007 would be followed by a cumulative 25-30 per cent fall in values by 2010, albeit the range of potential price decline outcomes is very wide. The major caveat is that this analysis is predicated on there not being any significant slowdown in the economy which would weaken the flow of expatriates into Dubai. So if oil prices came unstuck in the forecast period, the outlook would be very different.

Developer optimism

When the report came out, local property developers generally took no notice, but there was a slowdown in new schemes, particularly after the massive final rush of new projects at last year's Cityscape trade show. One thing that certainly kept the property boom alive into 2007 was the continual delays to major projects, such as the Jumeirah Beach Residence and The Palm, Jumeriah. In practice, it was still hard to find completed accomodation to buy or rent in early 2007. EFG Hermes revised its 2007 completion prediction to 25,000 units in autumn 2007, and saw prices rising moderately until a belated correction in 2009 mainly due to delivery delays. Yet local developers continued to roll out new projects until the summer. There was a change in focus with ultra luxury, high-rise condominiums and high-end villa communities coming to the fore, while commercial property launches in the Business Bay kept on rolling.

Sky high ambitions

It is a notable feature of global property booms that the most ambitious projects usually come late in the cycle, and of course reflect the then very high land values. Another common feature is the building of super tall buildings and Dubai is set to have the world's tallest building, The Burj Dubai. At the time of writing, the market is still booming with participants anticipating a lively autumn once Ramadan is over. No less than five more super-tall buildings, not including the Burj Dubai, are on the drawing board or at the foundation stage. In fact property rentals continued to rise in the summer of 2007 even if capital values seemed to have levelled off since the spike observed in September 2006. The general belief is that after a five year run, the Dubai boom is almost over with modest price rises until a decline in 2009, or at least that is EFG Hermes' view.

Dubai rents hit $3,500 per month

2007-05-24T18:25:00.000+04:00

Rental accommodation in Dubai now averages almost $3,500 (AED 12,850) per month, according to figures from consultancy firm ECA International.

The price tag makes the emirate the 14th most expensive city in the world for tenants, behind places such as Hong Kong, Tokyo, New York City and London. ECA surveyed 92 cities around the world, basing its figures on the average price of renting a three-bedroom apartment.

The firm said rental prices in Dubai have increased approximately 100% in the last decade. This increase was not as high as that in Doha, where the average rent rose 130% in the same period.

Despite such a large increase, Doha still ranks behind Kuwait City, Jeddah and Abu Dhabi, according to the ECA survey. The average rental price in Doha now stands at $2,246, compared to $2,429 in Abu Dhabi, $2,476 in Jeddah, and $2,594 in Kuwait City. Muscat was judged the Gulf's cheapest location in which to rent accommodation, and the sixth cheapest in the world.“Dubai and Doha have seen unprecedented growth in recent years as they establish themselves as premium business centres and luxury cities,” the report stated. “This development, coupled with a continued influx of expatriates, has resulted in new very high standard properties being erected, driving up the average rental price.” In an effort to control rental costs, authorities in Abu Dhabi and Dubai have introduced annual rental caps on residential properties.

In Dubai the government cut the cap by more than half at the beginning of this year. Landlords are now only allowed to increase rents by a maximum of 7% per annum, compared with 15% last year.

Many analysts believe that rental costs in the UAE could fall or at least level as more properties in its well-documented construction boom are completed. A rental cap may then become unnecessary.In another survey released this week, property consultancy CB Richard Ellis found office rents in Abu Dhabi surged by an average of 103% over the 12 months to May this year — a higher increase than anywhere else in the world.

Source: Arabian Business

Business welcomes Dubai rent cap

2007-01-11T18:34:00.000+04:00

The 7% rent cap set at the beginning of the year in the Dubai has been welcomed by the real estate industry. Omar Ayesh, President of Tameer Holding, said that the government’s decision was necessary with skyrocketing rental prices forcing an increasing number of residents and companies to relocate to neighbouring Gulf States.

The government’s main reason behind the rent cap was to reduce inflation rates by 6% or 7% from last year’s double-digit figures, with rents making up around 40% of the total inflation figure. “This was a long-term decision to stabilise the market. The expenses for companies based in Dubai have been doubling in the last two years and it was needed,” Ayesh said.

He dismissed the idea that investors would shy away from buying property now that the returns on rents have lowered. “Rents are still high, and investors make more than enough profits when renting out their properties,” he said. “Properties in Business Bay, for example, sell at US$1200 per sq ft, and they are rented out for US$250 per sq ft — a profit of more than 20%,” Ayesh added. Saima Khan, managing director of Taktical Realty Group, agrees that the cut was desperately needed to keep the property market stable. “The authorities realised that, unless they introduced limitations, high rents would increasingly prompt residents to move to the neighbouring emirates,” she said.Khan added that the Dubai property market would “definitely undergo a price correction”. “A correction is positive. It was predicted to happen this year, but I don’t see it happening until the end of 2008.”According to a study by investment bank EFG Hermes, Dubai has a demand for between 40,000 to 50,000 residential units a year, with 69,000 units set to be delivered in 2007 and 139,000 units in 2008.

The study links Dubai’s property cycles to those of Singapore, which went through a boom between 1998 and 2000 with prices up 37%, and then a short period of stability before a sharp drop of 30%.

Source: Arabian Business

Average Rental Rates for Residential Apartment

2006-12-08T11:09:00.000+04:00

Source: Emiratestodayonline

UAE gets Dh1.7tr freehold injection

2006-12-01T18:53:00.000+04:00

Members of Dubai Property Group (DPG) say Dh1.7 trillion has been injected into UAE freehold market with 30,000 units planned for delivery in 2007, but supply is still lacking for mid-income earners.

The group, which is made up of developers, consultants and real estate agents, also says the enormous growth in the real estate sector should be bolstered with legislation aimed at regulating the market and driving strong future growth

About 14,700 units were planned to be delivered in 2006 and another 30,000 units are expected for 2007.

Source: GulfNews

Dubai real estate ‘needs regulation’

2006-12-01T18:50:00.000+04:00

The tremendous growth witnessed over the past five years in Dubai’s real estate sector should be bolstered with legislation aimed at regulating the market and driving strong future growth. This issue, as well as other developments, was the focus of debate at Dubai Property Group’s (DPG) members’ meeting.

The meeting was aimed at “providing a platform to help increase understanding of the market,” noted Adel Lootah, DPG’s executive director who moderated the dialogue. “Some 14,700 units were planned to be delivered in 2006 and another 30,000 units expected for 2007. This rapid growth requires legislation to help stabilise the market and elevate the trust of all parties involved,” noted Adel Al-Shirawi, CEO of Tamweel. “A total amount of dhs1.7 trillion was injected into the UAE’s freehold market without much regulation. Legislation, and regulations are required to bolster the sector’s strength.

“The recently announced property law is a positive tool that will develop a healthier market,” he said. Al-Shirawi also noted that a substantial increase in home loans occurred, where the dhs1.1 billion in mortgages extended to consumers in the year 2003 has grown to dhs11.5 billion today.

Simon Townsend, director of CB Richard Ellis said: “Dubai’s achievement in having a progressive property law is recognised internationally. However, concrete and detailed regulations are needed to govern the different aspects of buyer-seller rights and obligations such as providing genuine services and collecting service fees from a non-resident owner.”

Source: 7Days

Average rental rates for residential apartments in Abu Dhabi

2006-11-16T16:23:00.000+04:00

Landlords hold key to rent cap

2006-11-16T16:17:00.000+04:00

Last week’s decree to restrict rent increases in Abu Dhabi has been widely applauded by residents, but it is not just people living in Abu Dhabi who will benefit from the imposed seven per cent per ceiling. The new ruling applies to commercial properties too, and that will be an important confidence boost for companies that have struggled to keep pace with rising prices.

The rent cap will definitely provide some respite for tenants who have seen annual rents jump by more than 30 per cent. However, new ten ants will still be liable to pay the prevailing market rate. You could say, of course, that every silver lining has a cloud, and there are concerns that landlords will seek to replace tenants in order to keep rents in line with the market.

The new law allows an annual rent increase of seven per cent, while previous standards permitted an increase of up to 20 per cent after two years. But the general view is that government intervention to keep the cost of living in the capital in line with people’s ability to pay is both sound and sensible.

From an investor’s point of view, the rent cap might be less attractive in the short term, but buyers of properties need a bouyant market of tenants able to afford their properties if the industry is to prosper in the longer term. A rent cap will help to sustain high demand and allow investors to forecast annual gains in rent revenue.

Overall, the legislation is a good thing as it provides clarity, which in turn helps industry confidence. Clearer rules will lead to more professionally structured leases in line with international standards, which remove ambiguities and are ultimately fairer to both the landlord and tenant.

Dubai and Sharjah too have witnessed massive increases in rents over the last year, with average gains of around 25 to 30 per cent. Dubai announced a rent cap last year, and Abu Dhabi is now following its lead. The authorities have done their part and provided clear direction, it is now up to the industry to ensure proper implementation of the guidelines – and this will be key to their

Last week’s decree to restrict rent increases in Abu Dhabi has been widely applauded by res- idents, but it is not just peo- ple living in Abu Dhabi who will benefit from the imposed seven per cent per ceiling. The new ruling applies to commercial properties too, and that will be an important con- fidence boost for companies that have struggled to keep pace with rising prices. The rent cap will definitely provide some respite for ten- ants who have seen annual rents jump by more than 30 per cent. However, new ten- ants will still be liable to pay the prevailing market rate. You could say, of course, that every silver lining has a cloud, and there are concerns that landlords will seek to replace tenants in order to keep rents in line with the market. The new law allows an annu- al rent increase of seven per cent, while previous standards permitted an increase of up to 20 per cent after two years. But the general view is that government intervention to keep the cost of living in the capital in line with people’s ability to pay is both sound and sensible. From an investor’s point of view, the rent cap might be less attractive in the short term, but buyers of proper- ties need a bouyant market of tenants able to afford their properties if the industry is to prosper in the longer term. A rent cap will help to sustain high demand and allow investors to forecast annual gains in rent revenue. Overall, the legislation is a good thing as it provides clarity, which in turn helps indus- try confidence. Clearer rules will lead to more profession- ally structured leases in line with international standards, which remove ambiguities and are ultimately fairer to both the landlord and tenant. Dubai and Sharjah too have witnessed massive increases in rents over the last year, with average gains of around 25 to 30 per cent. Dubai announced a rent cap last year, and Abu Dhabi is now following its lead. The authorities have done their part and provided clear direction, it is now up to the industry to ensure prop- er implementation of the guidelines – and this will be key to their success.

Source: Emiratestodayonline

What to look out for

2006-11-16T16:16:00.000+04:00

With so much development going on in Dubai, it can be difficult to spot the good projects from the bad, so below are some more top tips to help make sure you do not buy a property that was built on the cheap.

Carefully examine the property’s walls and floors for physical imperfections, such as wonky tiling Pay particular attention to the quality of finishes and the thickness of work surfaces Count the plug sockets in each room, especially the kitchen, which should have at least six. Many Dubai kitchens have three plugs or fewer Examine the front door. A good one will be solid and 65 millimetres thick, while some developers will try to get away with a hollow 45mm door Consider the property’s layout. Are there any unusual shaped rooms that would be difficult to place furniture or appliances into?

Try to find out where the wiring is from. European wiring is superior, but don’t be surprised to discover a cheap Chinese alternative has been used. It could be useful to ask an electrician to look for problems such as burned wiring, overfused circuits and improper wiring connections Examine the door and window seals, because your home will be plagued by dust if these are inadequate Tree roots can cause damage to foundations, so check to see if there are any large ones nearby If you are considering a home that has already been lived in, ask the seller probing questions, such as why they are selling, how long they have lived there and what problems they have had with the property Noise can also be a major issue, especially in apartments, so ask the seller about neighbours Look for large cracks in walls, crooked doors and an uneven roof line, because these could be signs of subsidence Examine the light switches. The plastic clip-on ones with the exposed screws are the cheapest and may indicate that other fixtures are of a similar low quality

With so much development going on in Dubai, it can be difficult to spot the good projects from the bad, so below are some more top tips to help make sure you do not buy a property that was built on the cheap. Carefully examine the property’s walls and floors for physical imperfections, such as wonky tiling Pay particular attention to the quality of finishes and the thickness of work surfaces Count the plug sockets in each room, especially the kitchen, which should have at least six. Many Dubai kitchens have three plugs or fewer Examine the front door. A good one will be solid and 65 millimetres thick, while some developers will try to get away with a hollow 45mm door Consider the property’s layout. Are there any unusual shaped rooms that would be difficult to place furniture or appliances into? Try to find out where the wiring is from. European wiring is superior, but don’t be surprised to discover a cheap Chinese alternative has been used. It could be useful to ask an electrician to look for problems such as burned wiring, overfused circuits and improper wiring connections Examine the door and window seals, because your home will be plagued by dust if these are inadequate Tree roots can cause damage to foundations, so check to see if there are any large ones nearby If you are considering a home that has already been lived in, ask the seller probing questions, such as why they are selling, how long they have lived there and what problems they have had with the property Noise can also be a major issue, especially in apartments, so ask the seller about neighbours Look for large cracks in walls, crooked doors and an uneven roof line, because these could be signs of subsidence Examine the light switches. The plastic clip-on ones with the exposed screws are the cheapest and may indicate that other fixtures are of a similar low quality.

Source: Emiratetodayonline

Pitfalls of home ownership

2006-11-16T16:05:00.000+04:00

Buying a property can be a risky business, especially for those entering the market for the first time. According to Roger Wakeham, director at property developers CHI, many buyers have been shortchanged by developers who cut corners to reduce costs, and what may seem like a dream home could well turn in to a nightmare.

“Some developers think the bottom line is the most important thing and have ended up in trouble, making savings on things which cannot be seen, such as wiring and drains,” said Wakeham.

“The quality of construction is often hideous. I know of someone who bought a villa for Dh2.4 million three years ago and recently sold it for Dh6m, but it’s of such poor quality it should be torn down.

“There is an oversimplification of the property market in Dubai. Too much emphasis is placed on square-foot rates, rather than the quality of construction and finishes. Dubai prices are still cheaper than Singapore's, so there’s still room for growth.” Homeowners could be in for a nasty surprise when the first rains arrive, if the developer has scrimped on insulation or water proofing.

Dubai experiences rain about five times a year and this can cause flash flooding.Your villa will flood if its drains are not robust enough.

“Developers in Dubai lack the experience of building villas in wet climates and so don’t have the necessary understanding of managing rainfall.

“In Europe, houses have pitched roofs, not for aesthetics, but to deal with rainfall, whereas Dubai’s flat roofs are ill-equipped to cope with water, and will leak unless properly insulated,” said Wakeham.

When inspecting a property for potential possession, take notes for future reference and comparison, and make at least two visits during daylight and at night. You could be in for a nasty surprise if the road is used as a cut-through by rush-hour motorists, for example. Air conditioning is a crucial factor. Cheaper-built villas will have the uglier, officestyle square ceiling vents, as opposed to less obtrusive recessed units.

Also check to see if each room has its own control unit, otherwise you will be conditioning empty rooms and running up a huge, unnecessary electricity bill. Villas with individual room controllers may be more expensive, but will save you money in the long run.

“All the time, I see people ripping out tiles and fittings because they were so low quality. By being careful, you can save yourself a lot of time, hassle and money,” Wakeham added.

Source: Emiratestodayonline

Agents say Dubai should not follow Abu Dhabi cap

2006-11-11T08:06:00.000+04:00

It's unjustified to harbour hopes of Dubai following Abu Dhabi in lowering the cap on rent increases, real estate observers feel. The reason why is simple: the markets are completely different. Abu Dhabi announced this week the introduction of a seven per cent rent increase cap in the year ahead. Dubai's current 15 per cent cap rule comes to an end on December 31 and a decision on its extension is awaited. Dubai Rent Committee Chairman Saeed Mohammad Al Gandi said, according to a news report, that the it is not contemplating any change at this point. Read More..

Dubai Average Rental Rates for Residential Apartments

2006-11-09T07:36:00.001+04:00

Source: Emiratestodayonline

No Dubai reduced rent cap

2006-11-08T22:50:00.000+04:00

Dubai is unlikely to follow Abu Dhabi's lead and reduce its rental increase cap below 15%, according to the chairman of Dubai Rent Committee quoted by 7Days. Abu Dhabi is capping increases at 7% a year. Dubai's rent cap expires at the end of 2006, but reports suggest rents and property prices will soften by 5% in late 2007

Source: AME Info

Abu Dhabi caps rent rise at 7%

2006-11-07T20:22:00.000+04:00

While this blog is primarily dedicated to providing updates and news on rental and real estate markets in the emirate of Dubai I could not resist posting an article in today's issue of the Gulf News about the rent cap in Abu Dhabi. Who would have guessed! Abu Dhabi has capped rent increases by 7% annually. In my opinion Dubai should follow suit. Read More..

Property prices and residential rents in Dubai to fall 5% in 2007

2006-11-06T07:48:00.000+04:00

Property prices and residential rents in Dubai will ease five per cent in 2007 after hitting a peak early that year as supply of new units will outpace demand, Standard Chartered Bank said yesterday.

Steve Brice, regional head of research for the bank for the Middle East, told reporters the fall in rents in Dubai will be offset by a rise in Abu Dhabi where liberalisation and investment is fuelling a boom. Read More..

History of Freehold Property in the Emirates

2006-11-04T01:55:00.000+04:00

Non-GCC expats living in the United Arab Emirates (UAE) were previously only permitted to rent property, or own property on the federal law approved 99-year leasehold basis. This all changed in 2002, when the Dubai government permitted the ownership of freehold property to expats, which has changed the real estate industry in the Middle East and Gulf regions.

Dubai Freehold Property
As the emirate of Dubai is not rich with oil like Abu Dhabi, Dubai has always focused on the development of its economy by establishing itself as a trading hub between the East and West. In addition to this, it is also establishing itself as the tourism destination for the region, so it has worked heavily on the promotion of real estate development. Read More..

Renting Property in the Emirates

2006-11-04T01:53:00.000+04:00

Not until recently have expats been able to own property in the United Arab Emirates [UAE], which limited non GCC nationals to lease property to live in. Even though it is now possible to own freehold property on Dubai, Ajman, and Ras Al Khaimah, renting of property will always be the dominant property market in the Emirates.

Rental Requirements
In order to rent property in the United Arab Emirates, you will normally have to pay for the entire year of tenancy either in cash or checks. If payment is made by cheques, most landlords will limit it to 2 to 4 cheque payments. In addition to the tenancy payment, if the flat/apartment/condo or house/villa was taken through a property agency, then a 5% commission is required to be paid to them. Most premises will require the payment of a refundable security deposit of 500 to 5,000 dirhams. As utility bills are paid by a tenant, it is normally required that a refundable deposit of 1,000 to 2,000 dirhams be paid to the landlord for usage of water, electricity and gas. Some premises also require the payment of a 10% municipal tax (Sharjah has a 5% municipal tax).

Rental Laws
Tenancy contracts in the United Arab Emirates normally last for a year, with exception to Sharjah which is normally for three years, and within that time landlords are not permitted to increase the rental price until it requires renewal. At the time of renewal, a landlord is not permitted to increase the rent by more than 20% (15% in Dubai as of 12th Nov. 2005). If a dispute happens between a tenant and landlord on the price increase, the issue should be taken to the Municipality's Rent Control Committee to settle. To file a case with the Rent Control Committee will cost 400 or 500 dirhams and will take normally take between a few weeks or months before being summoned to appear before the committee. If the case is won, then the fee paid to file a case will be paid for by the landlord.

Landlord Obligations
Landlords are normally obligated to handle the annual maintenance of their property and they are not permitted to evict a tenant without just cause within the tenancy contract time period.

Source: TEN Real Estate

The Palm Island delay and the coming Dubai property crash

2006-11-01T18:56:00.000+04:00

Delays of six months and more in delivering property on The Palm, Jumeirah underline an important fact about the Dubai property market. Delays are mounting, and each delay puts more pressure on local supply, increasing property prices and rentals. For while construction delays have become a part of Dubai commercial life, the demand from new migrants for places to live continues to grow day after day. The latest delay to arguably the most high profile Dubai real estate project of all, The Palm Jumeirah, is both a factor and a demonstration of this process writ large. Nakheel will now deliver 500 out of 3,900 apartments in November - six months late, 25 per cent by the year end, 75 per cent by April and the remainder by June 2007. Buyers on The Palm, Jumeirah have been offered the option of the original sale price back plus interest. However, as prices have more than doubled since the project was launched there have been no takers.

Reputation damage
This sort of failure to deliver on promises does not enhance the reputation of Dubai developers, and at the margin it could dissuade some international investors from becoming involved. But for many market participants it is just something to be expected in the advanced stages of a major property boom and with a project as complicated as a huge land reclamation. Indeed, this is the normal pattern seen in emerging market construction booms. A rush to develop followed by high levels of construction cost inflation and then late delivery, though the profits already made by most buyers of Palm Island property will ensure that few complaints become public. What is more interesting is the knock-on effect on the rest of the real estate market mentioned at the start of this article. It is another fact of life in the Dubai property market that real estate prices and rentals are continuing to rise this autumn.

Prices still rising
The price of a one-bedroom flat in The Greens is up by $27,000 since the summer and Meadows five-bedroom villas by $40,000, for example. How much of this is due to construction project delays, and how much is due to the pressure of new arrivals in Dubai is hard to tell. But both are clearly factors and as long as both continue so will the boom. Property crash forecasters will surely be right in the end, but when? And how much in rent will would-be local buyers have paid out by then? Those siren expatriate voices from the UK who sold their UK homes in 2000 expecting a property crash should remember that history has a habit of repeating itself, and that real estate booms can run on for a lot longer than is generally expected. What if oil prices stay relatively high for the next few years and the Middle East economic boom holds? Then we can put back the year of the Dubai property crash yet again, especially if more projects get delayed as seems inevitable and people continue to migrate to Dubai from other parts of this troubled region.

Source: AME Info

GrapeShisha - Information & Insight on the UAE

2006-10-31T21:46:00.000+04:00

While searching for rent information in Dubai I came across a very interesting web site (Grapeshisha) that has a very informative spreadhseet about rent information for people considering staying in the UAE for a period of time. The spreadsheet gives a general indication of what rentals in certain areas would cost but it does not account for furnished accommodation or short term leases. To view the spreadsheet, click here and scroll all the way down until you see the excel file attachment.

Rental Costs - How much does renting cost in Dubai?

2006-10-29T22:27:00.000+04:00

Rental costs vary enormously for villas of different sizes, some with swimming pools, others without, and between old and new apartment blocks, in good, bad and indifferent locations. With plenty of new property being built, supply usually keeps pace with demand, and many Arabs are keen to rent property to expatriates, as it provides them with a regular, reliable income. Average monthly rents for good-quality unfurnished accommodation are shown below. Read More..

Comparing Dubai and UK house prices

2006-10-29T22:25:00.000+04:00

One way of telling whether prices are high or low is to compare different markets. So what does an overview of Dubai and UK property tell us about valuations?

Take a typical South-West England market town like Salisbury and compare the housing market to Dubai. In Salisbury you can rent a substantial family home for $2,900 a month. A similar five-bedroom villa in Dubai might be $3,100 per month. So the UK just about wins on rental costs. Read More..

Rental costs are the key reason to buy in Dubai

2006-10-29T22:17:00.000+04:00

Soaring rental costs this year have encouraged more expatriates to buy in Dubai. With the total cost of buying a house on a mortgage now lower than renting, is this a compelling argument? It depends on how long you intend to stay and what happens to the local real estate market. Let us take a concrete example here, and homes in the Meadows are made of the stuff.

Say you buy a typical five-bed villa for $700,000 and take-up an 80% interest-only mortgage at 6% over 15 years, this gives you a monthly mortgage repayment of roughly $2,500, plus you will have $165 in service charge and municipal tax of around $160, making a total of $2,825. Read More..

5% Dubai Municipality Fee if you rent and/or own property in Dubai

2006-10-28T17:11:00.000+04:00

Ok, so here is the inside scoop about the DM (Dubai Municipality) 5% property tax (a.k.a. Housing Fee). If you rented a property after January 1st 2005 chances are you had to visit DEWA (Dubai Electricity and Water Authority) to get connected for water and electricity. Once you make that trip your residential contract gets "captured" in both the Dubai Municipality as well as DEWA systems and you will start getting your 5% of the residential contract value on a monthly basis as part of your DEWA bill. This charge will be displayed on the bill in a separate column titled "Housing Fees". Now, if you have not moved out from your apartment before January 1st, 2005 then DON'T because presently you should not be paying any housing fee but once you move out and into a new residence you will start receiving the fee on a monthly basis.

However, if you own a property here in Dubai then your housing fee is calculated as 5% of the 10% of your property market value. For example, if you bought a 2,000,000 Dirham property then 10% of that is 200,000 Dirhams and 5% is 10,000 Dirhams as a housing fee paid in 12 month period.

Here are additional links about the housing fee:

High time to pay housing fee
Housing fees to be paid with utility bills
Housing fee 'is a big burden'

So where is the property market heading?

2006-10-23T00:17:00.000+04:00

Following the scary hikes of 2005, residential rental and price increases may have to stabilise to keep expatriates on board the Dubai express. Ask Dubai residents about their concerns for 2007 and you may hear unease over North Korea's nuclear capabilities, Iraq's continuing descent into chaos or the volatility of the global economy.

But closer to home the most pressing concern is whether the explosive rental increases which characterised the 2006 property market will be repeated next year. Read more..

Rent Comparison for 1, 2 and 3 Bedrooms (Dubai)

2006-10-20T19:26:00.000+04:00

This is a recent comparison for rent values in various areas in Dubai. Information found in a recent article in the Emiratestodayonline newspaper.

1 UAE Dirham = 0.27232 US Dollar
1 US Dollar = 3.67216 UAE Dirham

Dubai Location Indicator Map

2006-10-19T15:30:00.000+04:00

Great map tool to find out where the various landmarks, communities and development projects are located in Dubai. Try the Map courtesy of ASTECO.

Dubai in 2009

2006-10-19T11:37:00.000+04:00

This is a short video about Dubai and how it will look like in 2009.

Project Dubai

2006-10-19T00:39:00.000+04:00

Project Dubai is a great web site to search for Rentals in Dubai. I have used it recently to find an apartment for a friend of mine who just arrived in Dubai. Project company provides many services including: Property Finder's Guide Magazine, Personal Property Listings, Interactive Tour of Dubai and up to date listings (individual and Real Estate company listings) of properties.

GoWealthy Property Portal

2006-10-17T20:34:00.000+04:00

This is another great web site for information on renting, selling and buying properties in Dubai. Gowealthy.com is a global lifestyle portal, providing comprehensive information on international real estate and freehold properties in Dubai.

One bedroom apartments record highest rental increase

2006-10-17T00:18:00.000+04:00

One-bedroom apartments in the UAE have recorded the highest increase in residential rents, driven mainly by heavy demand from single expatriates migrating to the country.

This was the conclusion of the annual research carried out by Dubai-based property services company, Asteco. The report shows that one-bedroom apartments in Dubai, Abu Dhabi and Sharjah saw an average increase in annual rental prices of 29 per cent, 33 per cent and 40 per cent respectively in comparison to last year.

Asteco’s research team compared the 2006 second quarter residential rental prices of one, two and three-bedroom apartments in Dubai, Abu Dhabi and Sharjah over a 12-month period.

“The majority of the working population in Dubai have been compelled to move to Sharjah due to the unavailability of apartments and high rents in Dubai. This is one of the main reasons why demand for apartments in Sharjah has risen so much, subsequently pushing up rent prices,” said John Allen, Director Consultation, Research and Valuations, Asteco.

Sharjah’s Al Rolla area recorded the highest increase in one bedroom rents from AED18,000 in 2005 to AED32,000 this year – a jump of approximately 78 per cent.

This year, the highest annual rental increase for one, two and three-bedroom apartments was reported in Sharjah with an average increase of 35 per cent, followed by Abu Dhabi and Dubai at 29 per cent and 25 per cent respectively.

Areas in Dubai commanding the highest annual rent include the much sought after Sheikh Zayed Road, Dubai Marina and The Greens. The average rent for a three-bedroom pad on Sheikh Zayed Road shot up from AED120,000 last year to AED170,000 today, while two bedroom rents in Dubai Marina shot up an average of AED23,000.

The Greens recorded the highest increase in rents for two and three-bedroom apartments with rents at around AED125,000 and AED145,000 – a 74 per cent and 53 per cent increase over last year’s prices respectively.

Allen added: “More than 280,000 residential units are expected to come up by 2009. This will definitely meet increasing demand and help stabilise rental prices in the UAE.”

Projects such as Discovery Gardens, Green Community, The Views, International City, Jumeirah Lake Towers and Dubai Festival City will definitely help ease the pressure, added Allen.

In Abu Dhabi, prime locations include the Corniche and Hamdan Street with prevailing rents of AED80,000 for a two-bed and AED150,000 for a three-bedroom apartment. Popular areas in Sharjah include Al Nahda and Majaz areas while Al Khan recorded the lowest residential rent increase – approximately 5 per cent.

Rent cap rule 'will remain until the end of this year

2006-10-16T23:20:00.000+04:00

Dubai's 15 per cent rent cap rule will be applicable until December 31 this year, said a senior official.

The rent cap condition [which states ] landlords cannot increase rents of residential and commercial units by more than 15 per cent will be valid until end of this year," said Mohammad Al Shaikh, General Secretary of the Dubai Rent Committee. He said the committee so far has no instructions whether the same rent increase restrictions would continue after the expiry of the given time period.

We are just an implementing body and have to ensure that landlords and real estate agencies are following the orders," he said.

He denied reports that rent cap would be implemented all over the UAE. "We can only talk about Dubai and as far as I know the 15 per cent rent cap rule is for Dubai only and it will end on December 31. I don't know what will happen next," he said.

His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, ordered on November 11 last year that rents should not be increased by more than 15 per cent of the annual rent until the end of 2006.
He said there was no significant increase in the number of cases regarding rent disputes.

Landlords know about the rule and they don't tend to violate this," said Al Shaikh.

But if both the landlord and tenant agree on rent increase, we can't do anything about it. However, if a tenant does not agree, he should file a case with the rent committee because he cannot be forced to sign such a contract," he said.

Al Shaikh also clarified that 15 per cent increase is the maximum limit. "Even if a tenant does not agree on this increase and he thinks that it is unjustified, he can file a case with the rent committee," he said.

Whenever a tenant comes to us to complain about a rent increase, we tell him to discuss the case with the landlord and file the case if he does not agree," Al Shaikh said.
A complainant has to pay 3.5 per cent of his annual rent as fee to the committee. If a tenant wins the case the fee is adjusted with the rent.

Tenants 'have the right to complain'

Fifteen per cent is the maximum rent increase permitted. If a tenant does not agree even on the 15 per cent increase, he can contact the rent committee and file a formal complaint.
The committee will send its team to visit the building and then determine whether the 15 per cent increase is justified or not. The official said tenants should not fear landlords because their rights are well protected.

No landlord can evict tenants without any solid reason which is non-payment of rent or other complaint. Even for eviction, the landlord has to file a case with the rent committee to decide whether he is justified," said Mohammad Al Shaikh, General Secretary of the Dubai Rent Committee. Residents can call 04-223 2323 to complain against rent hikes.

Woe is rent

2006-09-05T17:55:00.000+04:00

The annual rent increases throughout Dubai have been widely reported and the subject of much discussion as to when this increase will either show a slower ascent or even start to decline. These discussions have continued this week with the comments from the UAE central bank in respect of the levels of inflation and the effect rental rates have on pushing this to artificially high levels. The rising cost of residential rents in Dubai has been one of the biggest contributors to inflation since 2004. Read More..

To rent or to buy is the big question

2006-09-03T15:51:00.000+04:00

Like many, upon arriving in Dubai you may need to find accommodation. You might well then ask yourself: "Which is a better option: renting or buying a place?" Though there are several variables involved, it largely depends on one's personal situation. The two factors which loom largest are: how long you plan to stay, and what is your financial capability. The general consensus among property consultants and brokers is that renting is a better option for those who are here for a shorter period, whereas buying is the way to go for those who have a long-term horizon. Read More...

Will Dubai property prices reach European levels?

2006-08-21T12:42:00.000+04:00

A luxury apartment in the Dubai Marina can still be bought for around half what you would pay in a European city like Copenhagen. But are prices too high or too low by international standards?

This conundrum is faced by many potential buyers. And perhaps the main problem is not an immediate one of supply and demand but trying to get a vision of the future with Dubai as a very different sort of city.

The price of property in a city depends wholly on the income of its residents, and the supply available to satisfy that demand. Now supply and demand can be adjusted over time by the commercial decisions of developers and will always move towards an equilibrium situation.

More important is the actual spending power of a city’s residents and visitors. If they are poor then landlords can not charge high rents if they want tenants. Similarly developers can not sell highly priced property to people who can not afford it, and potential landlords will not pay high prices for long if prospective tenants have little income.

Disposable income
Thus the real determinant of house prices in Dubai will be the prosperity of its existing citizens and new citizens. Why are house prices so high in New York, London and Hong Kong? It is because these cities have concentrations of the highest earners in the world.

With its cluster-model of development Dubai is making a bold attempt to become a cluster of the highest earners in the Middle East. Whether that would be medical consultants in the Dubai Healthcare City or investment bankers in the Dubai International Financial Centre.

Dubai already has a wealthy media and IT community in the Tecom zone, and the Dubai Multi Commodities Centre is building up a trading hub for precious metals, diamonds, oil and even currencies.

Therefore house buyers who are looking to do more than turn a profit in a year or two should examine the future of Dubai. For if the future residents are going to have European style salaries, and tax-free too, then this will justify real estate prices at a far higher level than those seen today.

Location, location, Location
In particular, the unique locations will be in short supply, and the very best property will sell at a premium far higher than that seen in the market now. And certainly over the next few years the flow of supply of property in the Dubai market should be an opportunity and not a threat to investors if they play their hand wisely.

For once Dubai has achieved critical mass it will be a highly competitive location for many businesses, regional and international, and property that is cheap now by comparison with Europe will be expensive and possibly more expensive than in Europe and perhaps more on a par with Hong Kong or Shanghai.

Source: www.ameinfo.com

Dubai Waterfront

2006-08-16T13:10:00.000+04:00

A short promotional Nakheel film about the on going development of the Dubai Waterfront.

Dubai Property Law

2006-03-20T16:55:00.000+04:00

LAW NO (7) OF 2006 CONCERNING REAL PROPERTY REGISTRATION IN THE EMIRATE OF DUBAI

We, Mohammad Bin Rashid Al Maktoum, Ruler of Dubai:

Upon cognizance of the Federal Law No. 5 of 1985 issuing the Civil Transactions Law, as amended,The Federal Law No. 11 of 1992 issuing the Civil Procedures Law, as amended,The local Law No. 7 of 1997 concerning the charges for the registration of lands,And the local Decree of 1960 concerning the formation of the Lands Committee,Have issued the following Law:

Chapter One
Name and Definitions

Article (1)

This Law shall be called the “Law No. (7) of 2006 concerning Real Property Registration in the Emirate of Dubai".

Article (2)

Unless the context requires otherwise, the following terms and expressions in this Law shall have the meanings as shown against them respectively:

“State” means United Arab Emirates;

“Emirate” means the Emirate of Dubai;

“Government” means the Government of Dubai, including any of its departments, authorities or public establishments;

“Ruler” means H. H. the Ruler of the Emirate of Dubai;

"Department" means the Department of Lands and Properties;

“Chairman” means the Chairman of the Department;

“Manager” means the General Manager of the Department;

“Real Property” means anything immovable fixed within its boundaries which cannot be moved without damaging or changing its features;

“Real Property Rights” means any right in rem, whether principal or collateral, over a Real Property;

“Real Property Register” means a set of documents held in written or electronic format in the electronic register at the Department, which point out the description and location of each Real Property and the rights attached thereto;

“Real Property Unit” means any plot of land and any constructions, plants and other things thereon located in a single Real Property Area without any part thereof being separated from the other parts by any public or private property and without having any rights or liabilities on any part thereof other than the rights and liabilities of the other parts;

“Real Property Area” means a group of Real Property Units identified by main streets or fixed and clear landmarks, bearing an approved name and independent serial number in accordance with the regulations applied by the Department;

“Person” means a natural or legal person.

Chapter Two
Scope of Application and Right to Hold Title

Article (3)

The provisions of this Law shall apply to the Real Properties in the Emirate.

Article (4)

The right to own Real Property in the Emirate shall be restricted to UAE and GCC nationals and to companies owned in full by them and to public joint stock companies. Subject to the Ruler's approval and in specific areas in the Emirate as determined by him, non-national persons may be granted the following rights:

A. The right to freehold ownership without time restrictions; or

B. Usufruct right or leasehold right over a Real Property for a period not exceeding 99 years.

Chapter Three
General Provisions

Article (5)

The original documents and judgments under which registrations are made shall be maintained at the Department, and removing them outside the Department is prohibited. Any party having an interest, the judicial authorities or any experts appointed by them and the competent committees may inspect the documents maintained in the Register and obtain a certified copy of them in accordance with the provisions of this Law.

Chapter Four
Competence of the Department

Article (6)

The Department shall solely, to the exclusion of others, be authorized to register the Real Property Rights and long term leases as provided under Article 4 hereof. For this purpose, the Department shall undertake the following:

1. determine areas for survey or re- survey and approve maps prepared thereof;
2. determine the rules in connection with the survey, inspection and issue of maps related to Real Property Units;
3. prepare standard contracts in relation to Real Property transactions;
4. lay down the rules in connection with organizing, maintaining and destroying documents;
5. lay down the rules in connection with the use of computers for saving and registering data;
6. lay down the rules in connection with regulating and maintaining a register for real estate brokers;
7. lay down the rules in connection with the evaluation of Real Properties;
8. lay down the rules in connection with the sale of a Real Property at optional public auction and the supervision thereof;
9. determine the charges payable for services provided by the Department; and
10. establish branches for the Department as the Manager may deem fit.

Chapter Five
Real Property Register

Article (7)

A Real Property Register shall be established at the Department. All Real Property Rights and any amendments thereon shall be registered in the Register, which shall have absolute power of evidence against all parties. No objections against the data of the Register may be made other than on the grounds of fraud or forgery.

Article (8)

Subject to the provisions of Article 7 hereof, documents and instruments of the Real Property Register registered electronically in a computer shall be acceptable for the purpose of evidence as original documents and instruments.

Chapter Six
Registration

Article (9)

All dispositions that may create, transfer, vary or terminate a Real Property Right and all final judgments confirming any such dispositions shall be registered in the Real Property Register. Such dispositions shall not be valid unless they are registered in the Real Property Register.

Article (10)

The liability for breaching an undertaking to transfer any Real Property Right shall be limited to payment of indemnity, whether or not such undertaking provides for an indemnity.

Article (11)

Any inheritance declaration shall be registered in the Real Property Register if the inheritance includes Real Property Rights. No dispositions by any heir in connection with any such rights shall be valid or effective against third parties unless such dispositions are registered in the Real Property Register.

Article (12)

The Department may, in accordance with procedures to be issued under a resolution by the Chairman of the Department, consider applications for registration submitted by holders of lands that are not registered in their names in order to settle the position of such lands.

Chapter Seven
Alteration or Correction of Data in the Real Property Register

Article (13)

The Department may correct purely material errors in the folios of the Real Property Register upon a request from an interested party or on its own initiative and shall inform the concerned parties of such corrections.

Article (14)

The Department shall, in coordination with the relevant authorities, update the data in relation to Real Property Units together with the buildings, plantations or other structures thereon.

Chapter Eight
Maps

Article (15)

1. Upon the registration of the Real Property Areas and Units in the Real Property Register, the following maps shall be relied upon:

(a) The base topographic map;
(b) The Real Property Unit map;
(c) The Real Property Area map.

2. Every Real Property Area shall have a separate map showing the Real Property Units in that area together with their numbers.

3. Every Real Property Unit shall have a separate map indicating its location, boundaries, dimensions, area, features and the structures thereon together with the numbers of the adjacent units.

Chapter Nine
Division and Merger

Article (16)

If a dominant Real Property Unit is divided, the easement right shall persist for each part of the Unit, provided that such division shall not increase the burden on the servient Real Property Unit. However, if the easement is actually beneficial to only one of those parts, the owner of the servient Real Property Unit may apply to the Department to terminate the easement right of the other parts.

Article (17)

If a servient Real Property Unit is divided, the easement right shall persist on each part of the Unit. However, if the easement is actually used on some parts or cannot be used thereon, the owner of each part thereof may apply to the Department in accordance with the provisions of this Law to terminate the easement right on the part owned by him.

Article (18)

Easement rights shall terminate if the servient Real Property Unit and the dominant Real Property Unit become under the possession of a single owner.

Article (19)

If a Real Property Unit burdened with a collateral right in rem is divided to two or more Real Property Units, each new Real Property Unit shall bear the right in full. The new owners and the holder of the collateral right in rem may agree to divide such right so that each of the new Real Property Units will bear only part thereof as agreed.

Article (20)

If two Real Property Units are merged, where one of them is burdened with a collateral right in rem and the other unit is free of such right, the collateral right in rem shall extend to the new Real Property Unit in full without the consent of the holder of the right to merger.
However, if each of the Units is burdened with a separate collateral right in rem, the consent of the holders of such rights to the merger shall be obtained prior to such merger.

Article (21)

Any amendment of merger or division on the Real Property Unit shall be registered in the Real Property Register.

Chapter Ten
Title Deeds

Article (22)

The Department shall issue title deeds of Real Property Rights in accordance with the current records in the Real Property Register.

Article (23)

Subject to the provisions of any other law, a multi floor or apartment Real Property shall be considered as a single Real Property Unit and a folio shall be designated thereto in the Real Property Register. Supplementary folios in the names of the owners of such apartments and floors and common areas shall be added to the original folio.

Article (24)
1. Title deeds referred to under Article (22) of this Law shall have absolute power of evidence to establish Real Property Rights.

2. Any conditions, undertakings, encumbrances or any other liabilities related to Real Property Rights shall be stated in the designated folio of the Real Property Unit.

Chapter Eleven
Final Provisions

Article (25)

The provisions of the Federal Civil Procedures Law No. 5 of 1985, as amended, shall apply to anything not provided for in this Law.

Article (26)
1. Any agreement or disposal made in violation to the provisions of this Law or with the intent to circumvent its provisions shall be null and void.

2. Any party having interest or the Department or the Public Prosecution may demand to invalidate such agreement or disposal and the courts shall rule as such on its own initiative.

Article (27)
The Decree dated 6 November 1977 concerning civil and criminal cases relating to land transactions in the Emirate of Dubai is repealed.

Article (28)

The Chairman shall issue the required regulations, orders and instructions for the enforcement of the provisions of this Law.

Article (29)

This Law shall be published in the Official Gazette and shall come in force as of the date of its publication.

Mohammad Bin Rashid Al Maktoum
Ruler of Dubai

Issued in Dubai on 13 March 2006

High rental yields likely to support Dubai property prices

2006-03-13T12:51:00.000+04:00

In the global search for investment returns the pricing of major asset classes has increased to reflect much lower interest rate levels. Interest rates are now on the way back up again but this has so far had little impact on asset pricing. So the search is still on for assets with a good yield like Dubai property. Consider the case of a newly arrived expatriate family arriving from the UK. They have just sold the family home and wants to re-invest the funds in bricks-and-mortar. But the dilemma is simple: should they buy in Dubai, or go for a UK buy-to-let property?

Now let us answer this from an investment perspective, quite apart from the fact that owning your own home has an attraction of its own.

If you buy in Dubai and save on your rent then your saving will be equivalent to the yield, or rent paid, on the property, presently around 7-8%. Now in the UK and buy-to-let investment will probably not cover the cost of the mortgage and return 3-4%, and property prices look stagnant and possible falling.

Dubai yields good value
Unless Dubai rentals collapse - and they would need to fall by an unprecedented amount - the Dubai option looks the better investment. Indeed, in the Dubai property you have a margin of safety in that the rental yield has a long way to fall to reach UK rates.

It has to be said that with a 7-8% rental yield Dubai property appears fairly valued, while UK and many other major property markets have rental yields that suggest they are 50% or so overvalued.

This is not rocket science: with a 4% yield it takes 25 years to re-pay the value of a house; and 12.5 years at an 8% yield. It is not hard to see the better deal, or the more sustainable investment case.

Sustainability
Now it may well be that this equation shifts in the future, against the Dubai model. The population growth of the city might not absorb the available property supply at some point, but you still have to ask which market out of the UK and Dubai is the high growth emerging market, positioned on the cross-roads of world trade and which is the debt-ridden service economy?

Another way to look at this is to consider the property cycle, and to ask whether property is priced closer to ‘fair value’ in the UK or Dubai. From this perspective Dubai property prices still have higher to go while the UK may have already topped out.

So property investors in search of value should still consider Dubai seriously. Of course you need to be selective and pick the right location and do your due diligence. But the market fundamentals are still strong at the moment.

Source: AME Info

Dubai property prices are still going up?

2006-03-05T13:04:00.000+04:00

Academic discussions about the future of Dubai property are one thing. But have you noticed how prices are moving in 2006? So far there is no sign of supply catching up with demand and house prices are still on the way up.

One advertisement for a Dubai apartment tower last week presented readers with the chance to buy before prices went up by 10% on April 1. Now either this is a very clever marketing ploy to get people to sign up to beat a price rise, or this indicates that the Dubai property market is rather stronger than some believe.

A brief glance through the ever-thick pages of the Gulf News property sections, and there are three of them, confirms that price levels are up in 2006. If you look at apartments in The Greens or villas in The Meadows you will find that 10% is about the going rate of house price inflation so far this year.

How can this be explained? Well we are looking at completed property, available for occupation, and not one of the many towers emerging from the ground in the Dubai Marina and Jumeirah Lake Towers district. But this does not explain the advertisement proclaiming a 10% rise for off-plan apartment prices.

New investors
Perhaps there is a second wave of investor interest in the Dubai market now that Gulf stock markets are turning downwards. In classic investment theory a real estate boom will typically accelerate after a stock market crash due to a shifting of funds from one asset class to another in a search for solid value.

It has to be said that Dubai property is still attractively or at most fairly valued, and that does leave some room for speculators to drive prices to more exceptional levels. Yields on Dubai villas of 7.5% compare very favorably with 2-3% available in more mature markets like the UK, and are therefore attractive to investors who will drive prices higher and rental returns downwards.

There is also the case that the oversupply of property in Dubai remains somewhere in the future. At present apartments and villas available for rental are snapped up in days as people are still flooding into Dubai to participate in the economic boom.

This lively rental market again encourages investors, and indeed the upward pressure on rentals is still very clear, despite the 15% Government cap on increases which is widely side-stepped by vacating property and re-letting it. Thus buoyant letting conditions are another support for property prices.

Delivery delays
Constant delays to the delivery of new property also boost the demand for available property, and hence rental and property values. This still represents an upward cycle - and the fall off in demand required to dampen the market is just not evident, even if the market is slower than it was 18 months ago.

The difficult thing for buyers is to know whether to jump in now before prices and rents go higher, or to wait and hope that the real estate market has a correction like the local stock market. But that could turn out to be a long and expensive wait, even if this is the logical and inevitable outcome in the end.

Source: AME Info

Rental Prices in the Emirate of Dubai in US Dollar

2005-11-17T00:50:00.000+04:00

Effective January 2005, payment of housing fees with Electricity and Water bills

2005-01-01T17:09:00.000+04:00

In line with our policy to simplify procedures for our customers, it has been decided to collect the housing fees through Dubai Electricity and Water Authority (DEWA) bills, as from the beginning of 2005.

The fees shall be at the rate of 5% of the rental value or the value estimated by Dubai Municipality.

Registration: DEWA's offices (at Head office & all branches).

Categories required to register: Tenants, real estate companies, landlords.

Fess payable by: All tenants & residential owners within Dubai Emirate.

For inquiries or further information, please call 8004567.