New mortgage rule in UAE

Loan ceiling of 80% of property value for Emiratis, 75% for expats

The UAE Central Bank has issued the long-awaited mortgage lending system, which allows the country’s banks to provide a loan of up to 80 per cent of the property value to Emiratis and 75 per cent to expatriates.

The new rules which were released by the Central Bank on Monday will be enforced one month after they are published in the official gazette this week.

A statement by the Central Bank stressed that the 23 national banks and 28 foreign units operating in the second largest Arab economy must take into consideration the debtor’s eligibility and financial resources.

It also told banks to ensure they would not give loans that exceed 50 per cent of the client’s monthly income.
The new rules stipulated that mortgage loans to Emiratis must not exceed 80 per cent in case the property value is Dh5 million or less.

The loan must be cut to a maximum 70 per cent in case the property value is above Dh5 million.
Loans to expatriate clients must not exceed 75 per cent of the property value of Dh5 million or less and 65 per cent if the property value is more than Dh5 million.

As for clients buying property before construction or on the map, the maximum loan they can get is 50 per cent of the unit’s value.

The law set a maximum period of 25 years for a mortgage loan provided that the Emirati debtor must not exceed 70 years of age when repaying the last installment of the loan. As for expatriate clients, the law set the maximum age at 65 years.

“The Central Bank, by issuing this new system, wants to ensure all banks and financial institutions in the country have authorised and credible business criteria and effective frameworks that will control their mortgage loans,” Central Bank governor Sultan bin Nassir Al Suwaidi said on Monday.

Hiring frenzy reaches new high in Dubai realty


The festive season has started early for real estate professionals in the UAE. If the current momentum is sustained in the marketplace, they have every reason to party hard right through to the New Year as well.
Hiring has picked up across the board and for existing personnel there have been sweeteners in the form of pay rises of 3 to 5 percent compared with the same time last year, according to a senior official at Macdonald & Co, the specialist consultancy.
“Large developers are hiring new sales and marketgulf news2.1ing staff as they look to re-brand and re-launch their products and sell off-plan again,” said Ben Waddilove, director. “We have completed 22 percent more placements between April and September compared to the same period last year.”
The salary hikes and better packages are in evidence in specific areas such as development and project management, with developers placing premium on candidates having regional experience. “It is harder to recruit into locations such as Saudi Arabia and Qatar as there is so much going on in Dubai and Abu Dhabi,” said Waddilove. “The rapid increase in rents is also creating upward pressure on salaries as the cost of living increases.
“The positive market sentiment is feeding through to the consultancies that service large developers and we are noticing that some of the smaller players are now looking to hire and expand their teams.”
Despite all signs pointing to the property market remaining tuned to an upbeat mode, real estate firms are still showing a certain reserve on hiring practices. “We do not see a return to the situation in 2005-08 where developers hired very large teams very quickly . . . employers are much more selective.”

Dynamic situation
While developers work with the staffing numbers best suited to their immediate priorities, the situation at estate agencies is much more dynamic. “We have been receiving an increasing number of calls from former agents who, after leaving the industry as a result of the recession, now wish to re-enter the fray,” said Mohanad Al Wadiya, managing director at Harbor Real Estate. “We are also receiving calls from agents in the UK, South Africa and Australia.
“All of them have read about Dubai’s resurgence and are interested in opportunities in the locals market. In addition, the tax-free environment and eventual strengthening of the dirham are major draws.”

Competitive scene
With an eye on ensuring optimum retention, Harbor, currently in the midst of another recruiting drive, has instituted a compensation and benefits package that includes the possibility of agents getting up to 90 percent commission on property sales and leasing.
“The package was developed with the assistance of professionals from several industries including automotive, media and finance; high performers have the opportunity to achieve monthly recognition rewards and annual performance bonuses. In addition, a health insurance and savings scheme has been developed with Dubai’s National Bonds Corporation.”
But with more agents fighting to land deals, it is getting a bit crowded in Dubai realty. “After a point the sweet spot is gone as more players share the spoils,” said Chandrakant Whabi of Acrohouse Properties. “Dubai’s real estate industry is now at that point.”
“With more than 400 registered real estate companies already operating and more in the pipeline, it is going to be lot more competitive.”


ASK THE AGENTI am moving to Dubai and a friend has suggested I live in the Greens or The Views. What would be your advice?

Both The Greens and The Views are very nice places to live in. Situated adjacent to the Emirates Golf Course on Sheikh Zayed Road, they are very well located with all that in Dubai has to offer within easy driving distance.

They offer very nice lifestyle with excellent amenities, retail and dining alternatives in a very well-planned development. If you are lucky, you may be able to procure a view overlooking the Emirates Gold Club Wadi course. Very picturesque indeed, particularly in the evenings.

You will have a wide choice of studio; 1, 2 or 3-bedroom apartments in buildings of varying standards with annual rents ranging from about Dh60K to Dh195K.

If you are thinking of purchasing a property, the time is right as the area has shown excellent capital appreciation over the last year or so. Sale prices will range from around Dh850K for a studio apartment to as much as Dh3 million for the most luxurious three-bedroom apartment.

All in all, great places to live.

Hello, when I tried ti renew my rental contract, my landlord tried to increase my rent by 15%. I consulted with RERA and proved to him that he cannot do this, and now he has instructed me to vacate my apartment because he wants it for a family member. Can he actually do this?

These types of situations are occurring more frequently now that the market is picking up.

Law No. 33, Article 25(2) is very clear and provides protection for you, the tenant, by stipulating under which circumstances a tenant can be evicted.

First of all, the landlord must give you at least 12 months notice of eviction and the reasons and neceary documentation supporting the notice to evict.

Regardless of whether his intention is to use the property for himself, a relative or a friend, he would still need to provide you with a notice of eviction 12 months prior to the effective date.

In this instance, you have every right to remain in the apartment as a paying tenant if you wish to do so.

Some news regarding the return of long queues at project launches, flipping of properties and double digit growth is starting to sound like a bubble might be developing. Is the current growth sustainable?

Dubai’s real estate recovery following the global financial crisis has consolidated from a surge in 2011 that had the Arab Spring and other extraneous events as catalysts, into a trend as evidenced by a strong 2012 performance, with momentum continuing into the first quarter of 2013.

The sustainability of the recovery is being underpinned by an economy which is steadily strengthening, showing strong growth of anywhere between 4% to 4.5% of the GDP, mainly driven by strong performances in the tourism and retail sectors with trade and logistics also growing significantly. Property recovery is being fuelled by growth in these core areas of the economy aided in part by economic or geopolitical problems being experienced elsewhere in the world.

In addition, there is no doubt that investors have returned to Dubai which is being seen as favorable compared to a weak Eurozone, a slowly recovering US and uncertainty regarding the true state of the Chinese economy. 

Expert Eye: Service charges in your control

EXPERT EYEThe issue on service charges never really seems to go away. Virtually every owner or tenant in Dubai has, at some stage, experienced very poor service delivery while the charges associated with even average levels of service have been unacceptable to any right -minded person. The reason why this situation has occurred in many cases is the lack of competition, transparency arid accountability in the appointment and conduct of some service companies.

The establishment of owners associations (OAS) has long been seen as one way to increase the efficiency and effectiveness of service providers. However, in many cases, owners have had a low participation rate in the management of their buildings while many

developers have adopted the role of building management as a profit stream post-completion.

For those properties that have functioning OAs, the new Investor Protection Law, due for implementation in 2015. will strengthen the legal status of OAs by allowing them to operate as separate legal entities when conducting their business. This move can only further
enhance the legal standing of an OA when it goes about selecting, appointing and auditing service suppliers.A well-functioning, legally empowered OA will go a long way in ensuring that owners get what they pay for with regard to service providers.

As with any service, the rate you are charged will depend on the level of service you are receiving along with the configuration of your building. For reference, service charges vary from Dh10.5 per sq.ft. for projects in Dubailand, Dh15 in The Greens, Dh15 in Dubai Marina up to Db22 in Downtown Dubai. There are many factors at play which will determine the rate charged.

Regardless of what is being paid, the objective of any OA must be to control costs and improve the efficiency of service providers. This is one way by which OAs play a very important part in the development of a mature real estate industry and, by having a legal structure to facilitate the representation of owners’ interests in the management and operation of their property assets, help fuel investor confidence by ensuring services are provided in an efficient and effective manner which then helps maximize investor returns, thereby contributing to growth in property value.




Unlocking the landlord- tenant relations complex

UntitledOf the various people in the property industry with direct relations marked with sometimes serious complications, it is that which is between landlord and tenant that is usually rife with complexities and issues.

To help us understand that this relationship need not be so controversial, Mohanad Alwadiya of Harbor Real Estate shares his thoughts.

What are some common issues between landlords and tenants?

The three most common issues that arise from the landlord-tenant relationship usually involve disagreements regarding a proposed
rental increase, unjustified eviction, and delayed rental payments. Most disputes regarding rental increases arise where the landlord attempts to increase the rental significantly in order to capitalize on the revenue potential of the property. There have been a growing number of landlords who have attempted to do this with the recovery of Dubai real estate gathering more momentum and increasing market averages for rental receipts. The issue arises when the gap between the current rent payable and the new proposed rent, while seemingly justified when compared to ascending market averages, is too great for tenants to bear. The obvious issue for tenants is that a sudden and significant hike in rental expenses can put pressure on the family budget and necessitate, in some instances, relocation.

Rental disputes in Dubai are currently managed by the Dubai Rent Committee, a body which resides within the organizational structure of Dubai Municipality. There are specific laws governing the degree to which a landlord can increase rent in Dubai and Decree No.2 of 2011 sets out what a landlord can and cannot do with regard to increasing rentals for existing tenants. Both tenants and landlords can visit and access the RERA Rental Increase Calculator to determine for themselves as to whether any rent increase is applicable in accordance with the law.

What are the ways by which landlord-tenant relations can be improved?

As with all contractual relationships, the operation of the contract will always be more effective and efficient if
each party:

• understands and accepts both parties’ rights and obligations according to the wording, provisions and clauses included in the lease agreement;

• complements the above point with a thorough understanding of the law. Quite often, disputes arise out of ignorance, and not necessarily deliberate or malicious intent;

• has the commitment or willingness to resolve disputes through arbitration and reconciliation, supported by sufficient knowledge of each party’s rights and obligations. Quite often, a mediated discussion can reach a solution without the involvement of the Rent Committee.

Of course, the parties must have recourse or access to arbitration and reconciliation processes and procedures and, where these fail, a judicial process which is empowered to provide decisions bound and enforceable by law. In this regard, we are genuinely excited at the prospect of having a world-class Rental Dispute Settlement Centre, scheduled to be operational from December, which will further the development of Dubai as a global leader in all aspects of the real estate and property industry.




Show villas in Mohammed Bin Rashid City District One nearing completion

Village situated in prime location in heart of Dubai

Meydan Sobha, the developer of Dh21 billion Mohammed Bin Rashid City-District One, said it is making rapid progress with the construction of its show village.

The Show village, which will act as a unique showcase of the development, is already approximately 80 per cent complete and when finished will comprise nine Show villas, a demonstration of the world-leading Crystal Lagoon feature, extensive landscaping and a bespoke sales centre.

District One is an exclusive residential destination situated in a prime location in the heart of Dubai, a mere 2.9 kilometres from the Burj Khalifa. The expansive development is just five minutes from the entertainment and financial centres of the city, but it will be one of the lowest density residential developments in any international city, with over 65 per cent of its 1,100 acres dedicated to open and green space.

Launched by Meydan Sobha, an equally owned joint venture between Meydan Group LLC and Sobha Developers Ltd, the project, which will be delivered in four phases, will be completed in approximately seven years.

The nine actual villas in the show village will offer buyers a preview of what their future life of luxury will look like as they will be identical in every respect to the homes that residents will be able to buy. One of the unique selling propositions of District One will be the world’s biggest manmade lagoon, which is being constructed by globally renowned Crystal Lagoons, and the Show Village will also include a portion of the actual lagoon built using the same technology.

Commenting on the development, Saeed Humaid Al Tayer, Chairman and CEO of Meydan Group said: “Mohammed Bin Rashid City-District One is poised to become a monumental destination in Dubai, offering a residential development in the heart of the city that is currently unique to anything else in the region. The development also includes various attraction points ranging from parks, man-made beaches and the largest Crystal lagoon in the world to sports fields with cycling tracks, an equestrian club and shopping & dinning promenade with an array of restaurants. With master planning, aesthetic design and build of the highest quality, the show villas’ completion provides customers with the ability to physically experience their future lifestyle in a true and meaningful manner.”

Prospective buyers in District One will have the option of distinct villa styles and a vast array of floor plans, ranging from four to eight bedrooms.  The project embodies a lifestyle that blends luxury with natural beauty and nouvelle residential.

“With a three-decade-long pedigree of developing and constructing lifestyle destinations, District One will be the jewel in Sobha’s crown,” said PNC Menon, Founder and Chairman of Sobha Group. “We expect to complete the nine villas by November. Our partnership with Meydan will enable us to deliver expertise, choice and quality to an entirely new community in the heart of Dubai.”

In addition to the stunning villas themselves and the vast lagoon, District One will also deliver a phenomenal range of features and activities including parks, manmade beaches, canals, water sports, and even an equestrian club with riding trails. The development will also feature a promenade with a wide selection of stores, restaurants, cafes, lively bistros and entertainment options.

Source: emirates247

Last day to save 2% on property transfer fees

Nakheel kept its doors open till midnight on Wednesday

Developers in Dubai witnessed an unprecedented rush when customers sought to get registration documents on Wednesday so that they can complete the entire process with the Dubai Land Department on Thursday (today), which is the last working day before transfer fees are hiked to 4 per cent from October 6 (Sunday).

Nakheel, a Dubai-based developer, kept its office open till midnight on Wednesday to provide customers with registration documents, as today (Thursday) is the last day for investors to save 2 per cent on transfer fees.

“We decided to keep our office open till midnight on Wednesday to meet the customers requests. The numbers swelled to almost eight to 10 times more than we usually get,” a company spokesperson told Emirates 24|7.

According to industry sources, Emaar Properties and Deyaar Development offices were flooded with customer requests.

As informed earlier, some registration trustees will also be keeping their offices open till 10 pm to allow investors to register their transfer today.

This website had earlier reported that developers were working extended hours to cope with customer rush, who are seeking no-objection certificates and registration documents to complete the transfer of their properties.

On Sunday, the total real estate transactions had touched Dh5.1 billion at the Dubai Land Department.

The new registration fee, effective October 6, covers all property transactions in the emirate of Dubai except for the industrial sector, including warehouses.

Dubai Land Department’s Director-General Sultan Butti bin Mejren said: “The move is aimed to stop quick transactions (flipping), which is unhealthy for the market and results in sudden price increases.

“The decision has come at the right time. The market has matured and investor confidence is growing. The move is not likely to have any negative impact.”

Source: emirates247

Dubai property owner pays Dh53,000 to buy JLT parking

Claims developer refused to issue NOC unless he bought parking space

A property owner has paid Dh53,000 to buy a parking space in a tower in the Jumeirah Lakes Towers (JLT) master community.

RB, who requested only his initials be used, told Emirates 24|7 that he paid Dh53,000 to buy a parking space in August to get a no-objection certificate (NOC) for the title deed from the developer.

“I tried to convince the developer to issue the NOC, but he insisted that I buy a parking space.”

In 2012, this website reported that a developer refused to issue a NOC to the owner unless he bought a parking space.

“I didn’t have Dh40,000 to buy a parking bay last year, but I decided to buy it now by taking a personal loan. The developer hiked the price by 32 per cent and did not negotiate,” RB said.

However, despite buying the parking space, the developer has still not issued him the NOC, RB claims.

“No reason has been given for the delay. I keep on following up with them, but they aren’t giving any concrete answer,” he claims.

Parking barriers

Dubai Multi-Commodities Centre (DMCC), master developer of JLT, commenced activation of parking barriers in September 2012 with 16 clusters now covered.

This website reported then that in an email sent to a JLT resident, DMCC said the centre was finalising a solution and would issue JLT parking permits for those who require additional parking spaces.

The centre states that parking barriers have been activated to ensure that those people who have purchased the right to exclusive use of parking garages can park their vehicles, sell or lease their spaces.

“Any owner or tenant who has not acquired parking rights is advised to contact their tower developer, owners association, or landlord as soon as possible to avoid any inconvenience.”

Currently, there are free visitor parking bays and street level parking spaces available across the community. DMCC has emphasised there are plenty of parking spaces available for residents, office workers and visitors.

Source: emirates247

Dubai property registration fee doubled to 4%

New property transactions fees structure to kick in from October 6; buyer, seller to pay 2% each

The Dubai Land Department (DLD) on Thursday announced the doubling of the property registration fee to 4 per cent from 2 per cent.

The new registration fees covers all property transactions in the emirate of Dubai except for the industrial sector, including warehouses.

The new fee structure will start to be implemented from October 6, 2013.

DLD Director-General Sultan Butti bin Mejren said: “The move is aimed to stop quick transactions (flipping) which are unhealthy for the market and result in sudden price increases. “The decision has come at the right time… the market has matured and investor confidence is growing. The move in not likely to have any negative impact.”

Mejren pointed out that 110 countries in the world had higher property registration rates than Dubai, citing United Kingdom, which charges 4-10 per cent, France 8 per cent and India 7.3 per cent.

As per the decree, the fee will be split 2 per cent each between the buyer and seller. Although the previous law did specify one per cent each for the seller and buyer, in practice the buyer always paid the two per cent.  Mortgage registration fees remain same at 0.25 per cent of the mortgage value to encourage end-users.

No rollback

Asked if the department would consider delaying the implementation, Mejren asserted in no way the decision would be rolled out.

“The mechanism to issue laws in Dubai has evolved. We took almost three months to finalise the decision and I was been reviewed by the financial and legal department and even by investors. The law has been issued and is being executed. There is no way it will be revised.” Although the government hopes to slow down the price rise and discourage flippers, some experts believe this will not discourage genuine buyers because the price increases are based on real demand in Dubai property and not flipping.

Transaction reach Dh162b

In the last week (Sept 15 to 19), DLD registered property transactions worth Dh1.2 billion apart from Dh990 million in mortgages, the highest recorded in the past 50 years, Mejren revealed, adding that in the first nine months of 2013, Dubai has registered transactions worth Dh162 billion compared to Dh90 billion same period last year. In 2012, total transaction reached Dh145 billion.

Revealing that the Dubai market was on an upswing, Knight Frank, UK-based global consultancy, said on Wednesday growing investor confidence has already led to price increases with villas witnessing price appreciation of 11.4 per cent and apartments rising 15.1 per cent since beginning of 2013.

The Wealth Report 2013, released earlier this year, has revealed Dubai as one of the most favoured ‘safe haven’ locations for global investors.

“There is a definite focus on quality by buyers, which is now recognised clearly by developers. With the resurgence of Dubai real estate has come a more acute awareness of trust, reputation and the ability of developers to deliver a high quality product,” the consultancy said.

Standard Chartered said earlier that Dubai’s property market is not heading towards another crash with market is more sustainable and influenced by an improved economy rather than speculation.

Source: emirates247

Nakheel welcomes Waitrose to Palm Jumeirah mall

Dubai, 3 October 2013: Nakheel today confirmed upscale British supermarket chain Waitrose as a first and flagship tenant at the AED2.5 billion Nakheel Mall on Palm Jumeirah. Waitrose will occupy a 4,200 square metre area at Nakheel’s new retail, dining and entertainment complex, which will open in 2016.  More than 100,000 sqm of shop space, spread over five levels, is available. Ali Rashid Lootah, Chairman of Nakheel, said:  “We are delighted to welcome Waitrose to Nakheel Mall, which will create focal point for Palm Jumeirah and bring a new dimension to shopping, dining and leisure in Dubai.  It will enhance the services and facilities for residents of The Palm, and provide an exciting new destination for people across the UAE, including the millions of tourists who visit each year.” Mr Ali Albwardy, Chairman of Fine Fare Food Market, added: “Nakheel Mall on Palm Jumeirah is an exciting retail development and we are delighted to be represented there. Waitrose aims to combine the convenience of a supermarket with the expertise and service of a specialist shop and we looking forward to bringing this experience closer to the residents and visitors to the Palm.”

Nakheel Mall – endorsed earlier this year by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai – will be built in the centre of Palm Jumeirah’s trunk. Ground work is underway, with construction beginning by the end of 2013. A 50-storey, five star hotel will also be built alongside the Nakheel Mall.

The Nakheel Mall and Hotel complex will have three basement parking levels, 4,000 parking bays, a 1,000 sqm indoor garden and a 180 metre high viewing deck with panoramic views of Palm Jumeirah and the Dubai skyline. There will be more than 300 shops, including Waitrose and two anchor department stores, a nine-screen cinema and six medical clinics.  The Mall will also have a roof plaza with restaurants and cafes as well as a host of eateries inside.