Gulf News Freehold – Ask the Agent


I bought a studio in 2008 financed by a lending firm. Since it is not furnished yet, my lawyer told me to cancel the SPA but the lending firm did not agree.

Visit RERA first to sort out the registration issue in Oqood as this is a prerequisite to any further action. Once the property is registered, meet with the lending company. Explain to them that you would like to terminate the finance agreement due to project delay. They will share with you the status of your liability. You then need to obtain compensation from the developer for the delay. Appoint a lawyer to determine if your contract has the proper compensation clause to support your case. If so, plot a course of action to receive what is rightfully yours under the contract. From the information you have provided, it appears that once the course of action is determined, you need to engage all parties and alert them of your intentions. It is then a case of you and your lawyer taking the necessary legal steps to resolve it.

I have an apartment that I have let through an agent. Despite numerous reminders, the agent has refused to pay me. What actions can I take?

The issue here is that you allowed the checks to be issued under the agent’s name. There is no reason to have allowed this and, unfortunately, the decision to do so has placed you in a vulnerable position.

I am not sure of the details of the contract that you have with your agent, but unless you have a proper property management agreement in place with a licensed property management firm, you should never allow the checks to be issued under the agent’s name.

Even if you have a property management agreement, you should stipulate that all cheques be issued in your favour and the property management firm is authorised to receive, issue receipts and bank the cheques into your account.

I am afraid your only option is to hire a legal consultant and go to court and file a legal case against the agent.

My husband and I bought an unfinished penthouse from a non-Emirati guy. Does he have to register it first so he can sell it?

Whatever happens, the penthouse must be registered first. Nothing can happen to affect the legal transfer of ownership of a property unless it is registered first. With regard to MOUs, they come in different formats with different content to suit the particular transaction at hand and each party’s wishes. If you want to ensure that it is legally binding, l suggest you hire a lawyer to draft it for you. Once the property is registered, you should visit the Dubai Land Department office or any of the trustee transfer offices and conduct the transfer of the property there. It appears to me that you have limited experience in concluding a property transaction such as this. My best advice for you is to hire a professional property consultant to take you through this journey in a professional and smooth manner.

I want to modify and extend my villa. What are the documents required and the procedures to be followed when it comes to making alterations?

You need to establish that the amendments do not threaten the structural integrity or safe habitation of your villa by you or by future owners should you decide to sell it one day. Therefore, you should prepare the architectural and MEP drawings for the proposed concept. These need to be viewed in conjunction with the architectural and MEP “as—built drawings” by different authorities and regulatory bodies  to ensure the proposed designs are structurally sound and meet the building codes. You need to obtain NOCs from the owners association, zoning authorities, Civil Defence and even the project developer and DEWA. If the renovation is extensive, you may be required to have the work inspected by the Civil Defence and the Building Department. Your architect or contractor can arrange for all  approvals on your behalf. Engage professionals who can achieve this for you.


I know that the market has slowed but is the slowdown being experienced across the board, or do some areas still look promising?

There is no doubt that the affordable segment in Dubai still shows a lot of promise. The properties In this segment will be in high demand as the emirate’s strong population continues to grow on the back of a strong recovery.

Properties located in non-prime areas continue to do very well. With the recovery in real estate going from strength to strength, we have witnessed the more affordable or secondary areas of the market continue to do well.

The demand for this type of affordable accommodation has been growing steadily as Dubai’s population swells in the run-up to the Expo and the demand for affordable housing increases.

Examples of affordable projects that are providing good rental returns and expected capital appreciation are the Skycourts and Queue Point located in Dubailand.

Other affordable residential destinations are the International Media Production Zone, International City and Discovery Gardens. These established communities offer a wide range of housing options for families and singles alike.

There is also the new project Town Square offering “value” apartments to newcomers in the city and families.

Gulf News Freehold – Ask the Agent

Mohanad Alwadiya

With the Dubai property market undergoing a correction, does it make sense to invest or wait until the market is showing signs of picking up?

While the market is cooling a little, there are advantages to be gained from purchasing now. The market will pick up again as the next five years are expected to see strong economic growth, but picking the exact timing is difficult. Start your property search immediately as a property investment requires the same approach regardless of the state of the market. Know what you can afford. If you have the cash, pay for it outright, but don’t be afraid to take a mortgage. Think about location, infrastructure, construction quality, developer reputation and building amenities. Consider the effectivity of the owners association, service charges and quality of maintenance services. Be purposeful, persistent, patient and pragmatic in your approach to make a sound investment decision.

There seems to be a lot of press and activity regarding the Expo 2020. How can I, as a landlord of four apartments, capitalise on any new opportunities?

Seek professional advice on to how to manage your portfolio. Many landlords across Dubai are bound to miss out on the revenue generating opportunities that the Expo will bring because of poor or non-existent planning.

A competent property manager will provide you with the best opportunity to maximise your financial gains. Do not make the mistake of leaving your planning too late. Know the current and likely future market conditions and events, risk factors that may enable or inhibit revenue growth, inflation and cost increases and a complete comprehension of financial modeling and the ever-developing area of industry policy and regulation. Depending on the size and complexity of your portfolio, make a five-year plan which covers pricing, cost management and maintenance schedules and several other considerations.

I have 14 apartments which are becoming too large to manage. I am considering hiring a property manager. What type of fees can I expect to pay?

It will vary by provider. It may be between 3% and 6% of the rental receipts; some will have an administrative fee. Understand what you expect from your property manager as the depth and breadth of their services vary greatly. You can negotiate a fee structure based on your actual requirements. Ask for referrals and make sure you follow up with some existing clients to check their efficiency and professionalism. A competent property manager will provide an assessment, strategy and activity plan designed to harness the financial potential of your property. You should have a rolling five-year activity plan which covers pricing, marketing and tenant management among others. A competent property manager will also provide you with review schedules regular financial reporting and many more.

With many new projects and off-plan opportunities, I am nervous about the quality of end products. Can we expect an improvement in quality?

During the global financial crisis, many developers realised that properties of poor quality were dealt the harshest of value declines. As a result, many developers did not survive. Having said that, the old caveat of “buyer beware” still applies. Deal with a reputable developer. Ask around or seek professional guidance. Ask what proactive measures are taken to ensure the end product has been built to an acceptable standard. Warranties and any quality assurance policies should be discussed in detail and have the sales and purchase agreement reviewed by a professional. Engage an expert to inspect (snag) your property and report any legitimate issues to the developer for rectification. Remember, once you have taken ownership of the apartment, the developer is still obliged to fix any issues that may arise during the full 12 months following the transfer of ownership.

Now that the market has corrected, there are many good opportunities in completed assets. Given the rising value of finished properties, are there advantages of buying off-plan now?

Purchasing an off-plan property. can provide you with superior capital gains by the time of completion, provided you are buying at a discount to today’s finished inventory and the market is expected to strengthen up to the completion date for the particular property that you are considering. This, of course, will depend on an estimation of economic growth, population expansion, the number of competing projects in the pipeline and the eventual industry inventory position.

Be smart about the product that you buy and try to avail yourself of a payment plan.

Look for certain property types complete with amenities and facilities in locations you believe will be keenly sought in the future. Do not assume that all property types in all locations will improve their values homogeneously. No market works this way. Also check the latest Metro route planning.

Deal with reputable developers only and check the status of the escrow account of the development. Escrow accounts were introduced under Law No.  8 whereby all property developers in Dubai must be registered with RERA and hold an escrow account which protects the funds of the buyers and ensures safety of the purchase.

التخطيط المالي الحذر والواقعي العامل الأهم لشراء منزل الأحلام

تخصيص 40% من الدخل لسداد دفعات الرهن العقاري

التخطيط المالي الحذر والواقعي العامل الأهم لشراء منزل الأحلام

دبي_ملحم الزبيدي:

  كشفت دراسة حديثة لشركة “هاربور العقارية”، أن التخطيط المالي الحذر المبني على الواقعية والصدق مع النفس هو العامل الأهم عند البدء بالتفكير لشراء منزل الأحلام على الرغم من إجراءات التصحيح الراهنة في السوق، والفرص الثمينة المتاحة، وتوفر التمويل بتكلفة رخيصة.

  وأشارت الدراسة التي أصدرتها مؤخرا شركة “هاربور” إلى أن النسبة الأفضل للاقتطاع من الدخل الشهري لسداد دفعات الرهن العقاري يجب أن لا تتجاوز 40% لتحقيق الهدف المرجو بامتلاك منزل العمر دون الوقوع في مشاكل التعثر المالي مستقبلا والذي قد تنتج عنه تحديات وخلافات مع الطرف البائع والغير محبذة.

  وأيدت الدراسة أنه مع دخول السوق العقاري المحلي في دبي، قد حان الوقت للتفكير في استغلال الفرص الثمينة التي بدأت بالظهور والاستفادة من تراكم رأس المال المتوقع أن يستمر لفترة من الزمن تمتد من 5 إلى 7 سنوات.

  وأوضحت أن الخطوة الأولى للأفراد الذين لا يملكون النقد الفوري للشراء هي تنظيم رهن عقاري لمنازلهم. فمن الأفضل أن تتوفر القدرة على تقديم عرض لشراء منزل مع وجود رهن عقاري قائم بدلاً من توقع ترتيب الرهن أثناء خوض غمار عملية التفاوض.

إذن، ما هي الطريقة المثلى لاختيار الرهن العقاري المناسب؟

  أولاً، علينا أن ننظر إلى أحوالنا الاقتصادية خلال العامين المقبلين على الأقل، ونطرح على أنفسنا السؤال التالي: “بالنظر إلى الدخل المتوقع ونمط الحياة المنشود، كم يبلغ مقدار دفعة الرهن العقاري التي نستطيع تحملها خلال السنتين المقبلتين؟”.

  لماذا نركز على فترة سنتين؟ … لأن غالبية أسعار الفائدة على الرهون العقارية ثابتة حالياً لمدة عامين، وبعد ذلك من المتوقع أن ترتفع هذه الأسعار لأن الرهن يخضع حينئذ لمعدلات متغيرة بدلاً من المعدل الحالي الثابت.

  ثانيا، تقدير الدخل المتوقع. وهنا يجب أن نكون واقعيين. كلنا نأمل في التقدم بسرعة في مساراتنا الوظيفية (والمالية بالطبع) لكن غالبية الناس يتعرضون لخيبة الأمل في هذا الصدد والقليل منهم ينعمون بالنجاح. وبالرغم مما ورد في التقارير حول زيادة رواتب العاملين في دبي بنسبة 5% خلال عام 2015، تدل التجارب على أن زيادات الرواتب إنما تترافق مع زيادة في تكاليف المعيشة بحيث يتوجب اتخاذ منهج متحفظ في تقدير التدفقات النقدية المستقبلية.

  وهذا يحيلنا إلى دراسة مسار ونمط المعيشة في السنوات القليلة المقبلة، مثل، هل هناك نية لإنجاب طفل جديد في المستقبل القريب؟ ….أو ربما شراء سيارة جديدة؟ أو كيف ستؤثر الأحداث العائلية الهامة أو التطورات في نمط المعيشة على الدخل المتاح للإنفاق؟ هل لديك أطفال سيدخلون المدرسة خلال الفترة الزمنية المذكورة؟ سوف يكون لجميع هذه الأحداث أثر على الدخل المتاح للإنفاق، وهذا سوف يضعف المرونة المالية اللازمة لامتصاص صدمات أسعار الفائدة.

  وأخيراً، فإن الخطة المجدية من الناحية المالية قد لا تكون مقبولة لمن يرغب بالشراء أو لدى شريكة حياته. والأسئلة المطروحة التي يجب الإجابة عليها هنا، ما مدى الاستعداد للتضحية في سبيل سداد أقساط الرهن العقاري؟ ما هي الأمور التي نستطيع التخلي عنها وما هي التغييرات التي يمكن أن نجريها على نمط حياتك؟ من جديد، وهنا لا بد من أن نوظف الصادق مع أنفسنا.

  وبمجرد اختيار طريقة السداد والتقيد بها، حسب دراسة “هاربور” فإن الأمر يتعلق بتحديد مبلغ الرهن الذي يمكننا لالتزام بسداده. وهذا يتحدد وفق معدل القرض إلى القيمة الذي يمكن أن نقبل به، وقيمة المدخرات النقدية التي نستعد لدفعها مقابل العقار، ومدة القرض وسعر الفائدة المتوقع دفعه في البداية وفي المستقبل بعد ذلك.

  عند اللجوء إلى مختصي شركات الرهن العقاري، سوف يقدمون المساعدة على تقييم نوع الرهن العقاري الأفضل من خلال تقييم عدد من العوامل المحددة مثل الديون الأخرى (ومنها البطاقات الائتمانية) التي قد تكون مترتبة على المستفيد، ومدى إمكانية الاعتماد على مسارات الدخل الحالية والمستقبلية، ومعدل القرض إلى القيمة الأفضل، ونوع الرهن العقاري، والدخل الحقيقي القابل للإنفاق، والأصول الأخرى المملوكة. ولا نستغرب هنا إذا ما تم الحصول على حلول مغايرة من شركات الرهن العقاري المختلفة بما في ذلك خيارات السداد. وتشتمل هذه الخيارات على النوع الأكثر شيوعاَ من الرهن العقاري وهو طريقة رأس المال والفائدة (الرصيد القابل للتخفيض)، وهناك أيضاً طريقة دفعات الفائدة فقط، وطريقة الدفعات الجزئية، وطريقة الفائدة الجزئية فقط، على الرغم من أن هذه الأصناف تستخدم غالباً لأغراض استثمارية معينة فحسب.

  وفي تلك الحالة يتعين الاختيار بين الرهن العقاري بالسعر الثابت أو السعر المتغير أو السعر المختلط (الثابت والمتغير). ومن جديد، علينا أن نفكر ضمن استراتيجية المدى الطويل. فإذا كان من المتوقع تغير أو ارتفاع أسعار الرهن العقاري، وفي العديد من الحالات يكون المعدل المتغير أكبر من الثابت، لذا لا بد من التخطيط السليم.

  وفي المقابل، إذا كان متوقعا انخفاض أسعار الفائدة في المستقبل القريب، فإن اعتماد سعر الفائدة المتغير هو الحل الأكثر منطقية ما دام الراغب بالشراء يتمتع بالمرونة في التعامل مع زيادة دفعات الرهن العقاري إذا ما خالفت أسعار الفائدة توقعاته واتجهت للارتفاع.

  ولفتت الدراسة إلى أن هنالك عدد من البنود التي ينبغي دراستها في إطار مفاوضات للحصول على الرهن العقاري. وهنا يجب محاولة الحصول على إعفاء من رسوم مؤسسة التمويل العقاري، حيث تختلف هذه الرسوم من مؤسسة لأخرى، وبالإمكان توفير 3 آلاف درهم بفضل هذا الإجراء.

  أيضاً، على من يرغب بالشراء طلب تفعيل بند الإعفاء من الغرامة في حال القيام بسداد الرهن العقاري بوتيرة أسرع من المقرر أو دفعة واحدة. ينص القانون على أن شركة الرهن العقاري لا يحق لها أن تستوفي أكثر من 1% من القيمة القائمة أو ما لا يتجاوز 10 آلاف درهم، لكن يجب السعي لإسقاط هذا النص من عقد الرهن العقاري مع الشركة.

  وأخيراً، يجب التأكد من أن شركة التمويل العقاري سوف تسمح بالاستفادة من حقوق الملكية الناشئة على المنزل بالتزامن مع الالتزام بسداد المستحقات. سوف تكون هذه الحقوق مفيدة جداً إذا ما ازدادت قيمة العقار نتيجة لتحسن الظروف الاقتصادية أو عوامل السوق. وسوف تسمح بعض البنوك باستخدام هذه الحقوق كضمان للقروض في المستقبل. ويمكن أن يعود ذلك بالنفع على المشتري إذا ما كان راغبا في إجراء تحسينات كبيرة في المنزل أو شراء سيارة جديدة أو حتى الاستثمار في عقار آخر.

  واختتمت الدراسة بالتأكيد على أن العامل الأهم عند اختيار الرهن العقاري هو معرفة ما نريد بالدرجة الأولى واختيار الرهن الأكثر ملاءمة لنا على المدى الطويل بالدرجة الثانية.

Property Weekly


July 2015: Where are we?

For the past six months, headlines have been making many and varied references to a real estate correction in Dubai. This is not surprising as indeed Dubai’s real estate industry is in the midst of one. Many view the term correction with suspicion and trepidation, particularly those with a more tactical and less strategic short-term point of view.

Those who take a long-term perspective look at a correction with anticipation as it refers to the elimination of systemic issues and making the necessary adjustments to deal with impacts of external issues on the efficient operation of the real estate market.

There is no doubt that a correction was overdue. The year 2013 will be remembered as Dubai’s comeback year as the total value of real estate transactions reached Dh234 billion, a 52 per cent increase on 2012, which was clearly unsustainable as witnessed when the correction began last year when Dh218 billion worth of real estate assets were sold, a reduction of over Dh16 billion on the previous year. At the time of writing, just over Dh63 billion worth of transactions has taken place this year, indicating that the market is well and truly entered its correctional phase.

Changing cash flows

The market definitely benefited from high levels of liquidity during 2012 and 2013. Capital inflows seeking safe haven from regional conflicts were strong. However, they were sure to weaken and have. Geopolitical events such as the Ukraine conflict and subsequent economic sanctions imposed on Russia by the West sent the rouble rapidly declining in value, making investing in Dubai an increasingly expensive proposition for Russians, who historically have been prevalent in the investing community.

In addition, changes to mortgage laws also dampened the availability of capital for investors wishing to use leverage to capitalise on attractive property valuations and the promise of high and sustainable rental yields.

Vying for investment

A slew of new projects being launched as a result of renewed developer optimism also placed pressure on liquidity levels and, eventually, prices market wide. Initially, launches were made with prices for off plan units consistent and supportive to prices for completed units.

However, with each additional launch, competition for the investor money intensified, leading to a gradual reduction in prices for off plan units and making the risk reward equation more palatable for off plan units versus completed units.

In addition, the shift of developer focus in response to the call for more affordable housing also meant that investors gravitated towards this – perhaps the most important structural correction in the market to date.

The number of new launches has been impressive, leaving many to question whether over – exuberance on behalf of developers will result in a significant oversupply. Calculating optimal supply levels, especially when emerging from a recessionary period, is particularly challenging. It depends on an accurate estimation of demand for real estate assets that will emanate from Dubai’s population growth, which will be largely driven by overall economic growth. In addition, supply needs to factor in a lag effect from the time that conditions conducive to development are identified by developers and when properties are completed and are released on to the market.

We at Harbor take a minimum five year view when looking at equilibrium or imbalances in the market. When taking into account the nature of its resurgence, the strong growth in fundamental economic drivers such as tourism and trade, the levels of investment into infrastructure and initiatives and stakeholder commitment to sustainable growth, we believe that while inventory levels may spike in the interim, they will not be excessive at the end of our five year forecast period.

Steady supply

There will be about 11,000 villas, 7,500 town houses and 35,000 apartments delivered between now and 2020. While this may seem a lot, remember that we are entering a period where demand for property – particularly those that are affordable is expected to rise significantly and given average occupation rates are currently about 80-85 per cent, there is not much margin for error in terms of satisfying expected demand.

Put simply, Dubai needs people to support an economy that is expected to grow at an estimated 5 per cent annually for the remainder of the decade and to deliver initiatives such as the World Expo 2020. The expo alone is expected to generate an additional 270,000 jobs and drive demand for housing and commercial facilities that don’t exist.

Much of the city’s planning estimates the number of people living in the emir ate to grow to 3.4 million by 2020 – a 7 per cent annual increase from today’s population of 2.25 million.

Expo led growth

There is no doubt that a stabilised real estate market will provide a much better launch pad for what will be a period of significant economic and commercial activity over the next five to seven years. The structural shift towards more affordable housing will not only accommodate the expected rapid population growth associated with the Expo 2020, but is also an important factor in the development of Dubai’s economy. Every emerging market needs to develop a strong middle class, whose expansion is critical to growing a sustainable economy and developing resilience in the face of external financial and economic shocks.

In addition, for Dubai to compete effectively in the region and globally, it needs to ensure that the cost of doing business in the emirate does not position it as an outlier when entrepreneurs or corporations are considering alternative locations for their operations.

When taking this perspective, the correction could not have come at a better time.