Capitalization rate card for investment

Many investors use gross yield and net yield to assess differing property investments in order to determine which course of action represents the best decision from a financial point of view.

But there is another calculation which is often ignored which is instrumental in determining how to deliver the best returns on an investor’s equity. This calculation is called the Capitalization Rate and is an important indicator for investors to consider. In the post Global Financial Crisis (GFC) period, yields from any type of investments became increasingly harder to find and without doubt, the post global recession environment saw investors having to take greater levels of risk to generate acceptable and goal satisfying yields. Dubai’s rental yields have always been strong, particularly when compared to countries where rental income is taxed at high marginal tax rates. With a market that boasts an Average Gross Yield of around 7 percent, it has for some time stood as a beacon for those who appreciate the significant structural and regulatory development that the market has undertaken which, in reality, decreases the risk perception associated with investing in the market. A close look at Gross Yields can reveal a number of insights. It can provide a retrospective view or learning opportunity by revealing how accurately market factors were comprehended, analyzed, forecast and modeled when planning a particular development. Gross Yields can also highlight inefficiencies because inefficiencies, unless corrected, must be eventually supported by either Gross Yield or margin reduction. Investors are concerned with what can be put into his wallet and expectations of Net Yield will always pressure Gross Yield and the cost of resources required to generate that Gross Yield. In times of tight supply, inefficiencies in construction, administration, maintenance and operating methodologies are hidden because elevated Gross Yields driven by excessive market demand are more likely to drive acceptable Net Yields for investors. However, the real test as to effective Yield management is when supply exceeds demand. But really, what is the true meaning of Gross Yield? Gross Yield is the income on an investment prior to expenses being deducted expressed as a percentage. Simple. But Gross Yield only measures the income as a percentage of the original purchase price and does not reflect the effects of significant underlying fluctuations in underlying asset values such as those that have been witnessed in Dubai during the last 5 years. Now, what is the Capitalization Rate (Cap Rate) of an existing property? Cap Rate is the rate of return on a real estate investment based on the income that the property is expected to generate. The capitalization rate is used to estimate the investor’s potential return on investment. The Cap Rate may be calculated by dividing the investment’s net operating income (NOI) by the current market value of the property, where NOI is the total revenue derived from leasing the property less operating costs. Simply put, the Cap Rate = Net Operating Income/ Current Market Value. Given that the capital values for property in Dubai has, in many cases, shown significantly greater volatility than the income being derived from the property, we need to look at the Net Operating Income being generated from the property at today’s value. This allows us to see whether the property’s wealth generating performance is improving or declining by referring to the Cap Rate. If the Cap Rate is declining, it may lead us to conclude that to sell the property and reinvest elsewhere would generate greater income and/or overall wealth even if the Gross or Net Yield still looks impressive.

Cap Rate is used as part of the objective when establishing a client’s property portfolio. We will determine the lowest cap rate that the client should accept in order to make the investment worth-while. Typically, we will suggest a Cap Rate of between 5 and 10 per cent depending on expectations of asset value fluctuations going forward. As revenues are typically locked in line with rental contracts, the ability to accurately forecast the potential and likely shifts in property asset values will be essential to establishing realistic Cap Rates and forming longer term portfolio strategies. Another useful application of the Cap rate is to determine an estimation of the payback period of an investment. When you divide 100 by the estimated Cap Rate you arrive at an estimate, expressed in years, which will provide an indication of the payback period of the investment. For example, an investment with a cap rate of 7 per cent will have an estimated payback period of 20 years. Caution must be used when using this ratio, however, and it must be reviewed periodically as the underlying asset value and the revenues generated from the asset will always exhibit different rates of volatility.


Mohanad Alwadiya, MD of Harbor Real Estate & Instructor at the Dubai Real Estate institute, the official training 81 cortication arm of the Dubai Land Department

The UAE property market slowdown aside, it is great to know that the country’s real estate landscape has gone a long way from its humble beginnings. Aside from the landmark development in 2002, when UAE property (specifically in Dubai) was initially offered to be sold on freehold basis to expatriates by the Dubai government, another important milestone and sign of industry maturity, though relatively untapped, was the introduction of real estate investment trusts (REITs) into the country, with the first REIT entity, Arabian Real Estate Investment Trust (Areit) established in 2006.

And as people continue to agonize over the current market state of affairs, l would advise ambitious though financially limited would-be investors to look into the viability of investing in REITs rather than sitting and waiting for chance to buy property they can actually afford. But what differentiates a REIT-owned property from traditional property out for sale in the market? Before moving any further, let us try to understand what REITs are first and foremost, beyond the words that make up the acronym itself a REIT is a trust company which accumulates a pool of money through an initial public offering (/PO) and buys, develops, manages and sells real estate assets. REIT5 allow both small and large investors the ability to invest in real estate without investing large amounts of capital or devoting a lot of time in directly managing a property portfolio. Investors have the opportunity to buy a unit in a REIT which is actually a portion of a managed pool of real estate; this pool of real estate then generates income through the renting, leasing, selling and financing of property and distributes it directly to the REIT investor on a regular basis. Investors in REITs can expect returns without having to deal with the headaches of maintaining, managing and marketing their real estate assets. Units held in a REIT can be bought and sold like a stock on a stock exchange so investors also have the option to make a safe exit from the property marketplace whenever they decide to do so. There are three types of REITs: equity REITs, mortgage REITs, and hybrid REITs. Equity REITs invest in and own properties and, therefore, are focused on increasing the value of those properties while also accumulating revenues from their properties’ rents. Mortgage REITs deal in the investment and ownership of property mortgages while hybrid REITs combine the investment strategies of equity REITs

And mortgage REITs by investing in both properties and mortgages. A REIT can provide portfolio diversification because of the large amounts of pooled funds available to the REIT management team which, in turn, enables the accumulation and operation of different types of property assets in different locales. This provides the REIT management greater flexibility to minimize the effects of any cyclical downturn by enabling them to focus on opportunities that always exist and emerge from any correctional period to provide a superior return. If you are a landlord or building owner,

the advantages of getting into business with a REIT are manifold; because, in effect, property owners become “shareholders” in a single real estate company, landlords can reasonably expect a safer, more secure and regular source of income in the form of rent through an easy, fuss-less, flexible, liquid and maintenance-free investment. For tenants, REIT—owned buildings, whether they are malls, business parks or towers, are usually well maintained and professionally managed, so being part of or being under a REIT establishment is a win-win for both landlords and building tenants.

التقارير العقارية تبث الضبابية وتخلق حالة من الإرباك بين المستثمرين

:دبي ملحم الزبيدي
أكد عاملون في السوق العقارية بدبي أن تضارب واختلاف التقارير الصادرة عن شركات الاستشارات والوساطة حول واقع القطاع وأدائه في الوقت الراهن والسنوات المقبلة تبث الضبابية وتخلق حالة من الإرباك بين مختلف شرائح الجهات والأطراف المعنية بالقطاع كالمطورين والمستثمرين والمستخدمين النهائيين.

وأوضح العاملون أن تضارب بيانات ونتائج هذه التقارير حول المعروض الذي سيدخل إلى السوق في الفترة المقبلة وتأثيره في عامل الطلب ونسب النمو أو التصحيح السعري يثبت عدم دقتها وشفافيتها، كما أنها لا تستند في الوقت ذاته الى قاعدة بيانات موحدة، إنما الى معلومات داخلية تخدم بالدرجة الأولى أجندة وأهدافا خاصة للجهات المصدرة لهذه التقارير التي تحاول رسم خط اتجاه لأداء السوق.

اختلفت المصادر حول الجهة الحكومية المعنية بالدرجة الأولى بتوفير قاعدة بيانات ثابتة حول معادلة العرض والطلب التي يعتمد عليها أغلبية المطورين والمستثمرين في رسم خريطة مستقبل القطاع في السنوات المقبلة، حيث رجحت جهة كفة «دائرة الأراضي والأملاك» كونها المعنية بتنظيم وضبط القطاع وتسجيل التصرفات وعقود البيع والتأجير وغيرها، فيما فضلت جهة أخرى تكليف «بلدية دبي» لاختصاصها بمنح تصاريح البناء وشهادات إنجاز المشاريع.

وطالبت المصادر أن تتبنى جهة حكومية رسمية إصدار تقرير فصلي كل ثلاثة أشهر يختص بتوضيح الأرقام والمعلومات المرتبطة بمعادلة العرض والطلب لتفنيد ودحض مزاعم شركات الاستشارات والوساطة العقارية الخاصة التي تتبنى أهدافا ومصالح داخلية بها فقط بعيداً عن تحقيق الصالح العام للقطاع العقاري برمته.

علي لوتاه: تحكيم العقل بالدرجة الأولى

قال علي راشد لوتاه، رئيس مجلس إدارة شركة نخيل العقارية: «إن تضارب واختلاف الأرقام والبيانات الصادرة عن شركات الاستشارات العقارية بشأن منحنى أداء السوق المحلي خلال الفترة المقبلة وتحديداً بشأن عدد الوحدات السكنية التي ستدخل القطاع تؤكد عدم شفافيتها وصدقها».
وأضاف لوتاه قائلاً: «إن غياب إحصاءات واضحة ودقيقة وثابتة بنفس الوقت سينعكس نسبياً بشكل سلبي على قرارات المشترين والمستخدمين النهائيين، كما سيدفع بحالة من الضبابية وعدم الوضوح أمام هذه الشريحة من أطراف صناعة العمل العقاري في سوق دبي».
وطالب لوتاه مختلف الأطراف التي تستند وتتأثر بتقارير شركات الاستشارات العقارية بالتأني وعدم التسرع والانجراف وراءها، وتحكيم العقل بالدرجة الأولى والعودة لأصحاب الخبرة والدراية في هذا القطاع من أصحاب السمعة الطيبة.
وأكد رئيس مجلس إدارة «نخيل» أن هذه التقارير والشركات المصدرة لها لا تتطلب وضع الضوابط والأنظمة من قبل الجهات الحكومية المعنية المتمثّلة بدائرة الأراضي والأملاك ومؤسسة التنظيم العقاري (ريرا)، مستنداً بذلك الى قاعدة السوق الحر والدور الذي يقع على الشرائح المستهدفة بهذه التقارير.

ماجدة علي راشد: يجب الاستناد إلى أرضية معلومات صلبة

دعت ماجدة علي راشد، مساعدة المدير العام، ورئيسة مركز تشجيع الاستثمار العقاري في «أراضي وأملاك دبي»، كافة الأطراف العاملة في السوق العقاري المحلي بالإمارة إلى الاستناد إلى قاعدة البيانات المتوافرة في الدائرة كجهة رسمية تعنى بتنظيم القطاع للحصول على المعلومات المطلوبة لرسم خططهم وتوجهاتهم المستقبلية المتعلقة بتنفيذ وتطوير المشاريع العقارية وعدم الانجراف وراء التقارير الصادرة من الشركات الخاصة التي اتسمت بتضارب نتائجها ما يثبت عدم اتسامها بالشفافية والدقة.
وأوضحت راشد أن إعداد الخطط المستقبلية لشركات التطوير العقاري وتنفيذ المشاريع الجديدة يجب أن يستند إلى أرضية صلبة ودراسات صحيحة مركزها «دائرة الأراضي والأملاك» في دبي التي تملك قاعدة بيانات ضخمة تتعلق بالتصرفات العقارية والتسجيل والتأجير والتثمين وغيرها من الخدمات الكثيرة.
وأشارت مساعدة المدير العام، ورئيسة مركز تشجيع الاستثمار العقاري في «أراضي وأملاك دبي»، إلى انه لا يمكن التحرك باتجاه إصدار تشريع قانوني أو لائحة تنظيمية او عقوبات على شركات الاستشارات العقارية الخاصة بشأن إصدار التقارير حول واقع وأداء القطاع في الوقت الراهن ومستقبله في السنوات المقبلة.

محمد المطوع: تبث التشويش والضبابية

أشار رجل الأعمال محمد عبد الرزاق المطوع، الرئيس التنفيذي ل«مجموعة الوليد الاستثمارية»، إلى أن التقارير المتضاربة من حيث الأرقام الصادرة عن شركات الاستشارات العقارية المختلفة تبث حالة من التشويش والضبابية في السوق المحلي. والسؤال الذي يطرح نفسه، من أين تحصل هذه الشركات على البيانات التي تعتمد عليها للتوصل إلى هذه النتائج، هل استندوا لقسم المباني والتراخيص التابع لبلدية دبي، وهنا نطالب المسؤولين في هذه الدائرة بإصدار تقرير شهري أو فصلي كل ثلاثة أشهر ليوضح الصورة الحقيقية عن عدد الوحدات السكنية التي ستدخل القطاع في الفترة المقبلة، وتكون في الوقت نفسه السلطة الحكومية الوحيدة المعنية في والمعتمدة لمنح تصاريح البناء والإنجاز وترقيم المباني.
وأضاف المطوع قائلاً: «إن التقرير الوحيد الذي يفترض الاستناد إليه والاعتماد عليه، وهو ما يغفل عنه الكثيرون، هو التقرير الواجب صدوره من قسم المباني والتراخيص التابع لبلدية دبي، المعني بإصدار شهادات الإنجاز للمباني والمشاريع وعدد الوحدات التي ستضيفها إلى السوق خلال المرحلة المقبلة، حيث إن كل مشروع مرتبط بموعد للإنجاز والتسليم مع وضع هامش تأخير يتراوح بين 6 أشهر وسنة كاملة لأسباب فنية وتعاقدية بين أطراف معادلة البناء».
وأوضح أيضاً أن «أراضي ودبي» و«التنظيم العقاري» وشركات التطوير ليست الجهات المعنية في توفير البيانات والأرقام المتعلقة بعدد الوحدات السكنية أو المساحات المكتبية والتجزئة التي ستنضم إلى المعروض في سوق عقارات دبي، مع الأخذ بعين الاعتبار أن القطاع الخاص يشكل النسبة الأكبر من المشاريع المنجزة وقيد الإنشاء.
وقال المطوع: «إن الأرقام المختلفة عن بعضها بعضا التي نقرأها ونسمع عنها بين الحين والآخر من بعض شركات الاستشارات العقارية، والتي يتكلم بعضها عن 20 ألف وحدة ستدخل السوق قبل نهاية العام الجاري 2015، وهناك من يتوقع 25 ألفا، وطرف ثالث يتنبأ بين 8 و 10 آلاف، بعيدة جداً عن المنطق في ظل طفرة البناء التي يشهدها سوق دبي في الوقت الراهن».
ودعا الرئيس التنفيذي ل«مجموعة الوليد الاستثمارية» وسائل الإعلام المحلية المقروءة والمسموعة والمرئية أن تضع هذه التقارير المتضاربة والمغرضة والتي تحاول الإساءة إلى سمعة بيئتنا الاستثمارية العقارية ضمن الموضوعات الحمراء وحظرها عن النشر لما له من تأثير سلبي في مختلف أطراف صناعة العقار وتحديداً المستثمر والمستخدم النهائي من حيث اتخاذ القرار بالشراء.

زياد الشعار: لا تتحرى الدقة ولا تستند للواقع

قال زياد الشعار، المدير التنفيذي والعضو المنتدب في «داماك العقارية»، «إن الأرقام الصادرة عن تقارير لشركات أبحاث وتسويق عقارية في الدولة باتت تحمل الكثير من التناقض وعدم الدقة في البيانات التي تنشرها، مشيراً إلى أن أغلب هذه التقارير لا تتحرى الدقة ولا تستخدم مصادر ذات صلة حقيقية بالقطاع العقاري».
وأوضح «أن العديد من التقارير لا تذكر مصادر بياناتها، ولا تحدد المشروعات الرئيسية التي سيتم تسليمها في دبي خلال الفترة المعلن عنها في التقرير، إلا أنه ينشر إجمالي الأرقام في العموم، ولا يوثق ما ينشر من معلومات، على الرغم من أن دقة المعلومة هو الهدف الأول من الدراسات والأبحاث التي تقدم للسوق العقارية».

وأشار الشعار «الى أن هناك فروقات كبيرة في البيانات ذاتها إذا ما تمت مقارنتها بين تقارير مختلفة، على سبيل المثال بلغ فارق عدد الوحدات السكنية التي تم تسليمها خلال النصف الأول من عام 2015، لأكثر من 5000 وحدة بين تقريرين، وهو رقم يغير في معادلة العرض والطلب».

ولفت إلى أن أكبر شركتي عقارات في دبي وهما «داماك» و«إعمار»، واللتان تمثلان نحو 50% من السوق العقارية، أعلنتا أن تسليم الوحدات خلال عام 2015 لن يزيد على 3000 وحدة سكنية، فكيف يصل إجمالي الوحدات المتوقع تسليمها خلال العام الجاري 22000 وحدة. حيث سلمت «داماك» نحو 1511 وحدة خلال النصف الأول منها 999 وحدة فقط في دبي.

وبين العضو المنتدب في «داماك العقارية»، «أن من اللازم أن يكون هناك تفرقة بين التسليمات في مناطق التملك الحر وبقية المناطق، حيث إن التسليمات فقط في مناطق التملك الحر هي التي تؤثر في العرض والطلب في السوق العقارية».
وقال الشعار: «إن تضارب وارتباك الأرقام الخاصة بالسوق العقارية في دبي لا يصب في مصلحة القطاع، إذ يخلق حالة من التشويش على القرارات الاستثمارية للمشترين لا سيما غير المقيمين في الدولة، الأمر الذي يتطلب الرقابة والدقة حتى يتم رفد السوق ببيانات تساعد المشترين على اتخاذ قرارات صحيحة ومدروسة».

مهند الوادية: تنعكس سلباً على البيئة الاستثمارية العقارية

ذكر الخبير العقاري، مهند الوادية، المدير الإداري في شركة «هاربور العقارية»، وأستاذ محاضر معتمد وعضو في «كلية دبي العقارية»، أن التقارير العقارية الصادرة عن مصادر مختلفة كشركات الاستشارات والوساطة العقارية تأتي أغلبيتها باتجاه خدمة مصالح خاصة بهذه الجهات وتنفيذ أجندة معينة لها.

وأفاد الوادية أن هذه التقارير هي اجتهادات جيدة ولا بأس بها، لكن كثرتها وتضاربها من حيث النتائج تنعكس بشكل سلبي على البيئة الاستثمارية العقارية في السوق المحلي، لذلك تأتي «دائرة الأراضي والأملاك» في دبي على رأس الجهات الحكومية المعنية في ضبط وتنظيم هذه التقارير.

حالة من الإرباك وعدم التوازن

أكد المهندس فارس سعيد، رئيس مجلس إدارة «دايموند ديفلوبرز»، وعضو التجمع العقاري التابع ل«دائرة الأراضي والأملاك» في دبي أن تضارب التقارير الصادرة عن بعض شركات الاستشارات العقارية حول السوق المحلي في دبي يبعث إلى حالة من الإرباك وفقدان التوازن لدى أغلبية المستثمرين والمستخدمين النهائيين، الأمر الذي يؤثر بشكل سلبي في منحنى أداء السوق.

وأوضح سعيد أن تضارب التقارير العقارية ليست مشكلة حديثة، وإنما نواجه صناعة القطاع منذ أكثر من عقد من الزمن الأمر الذي بات يتطلب تحركا فوريا من قبل الجهات الحكومية المعنية بتنظيم وضبط السوق العقاري في إمارة دبي والمتمثلة ب«دائرة الأراضي الأملاك» و«مؤسسة التنظيم العقاري» (ريرا) من حيث وضع ضوابط ومعايير للتدقيق على هذه التقارير ومراجعتها قبل صدورها والموافقة عليها، ونقترح هنا تشكيل لجنه تحت مظلة الدائرة أو المؤسسة.

وتساءل سعيد عن الأسس والمعايير التي تعتمد عليها هذه الشركات في إصدار تقاريرها، وعلى ماذا تعتمد في نفس الوقت أيضا؟ وما الدوائر التي تستند إليها للحصول على قاعدة بياناتها للتوصل إلى نتائجها النهائية؟ ومن وجهة نظرنا أن تضارب النتائج هو دليل قاطع على عدم صحتها وأمانتها.

وقال رئيس مجلس إدارة شركة «دايموند ديفلوبرز»: «إن النمو الذي تشهده دولة الإمارات ودبي خصوصاً يستند إلى النمو الذي تشهده المؤشرات الفعلية للاقتصاد الكلي المتمثلة بمعدل نمو الناتج المحلي الإجمالي ومساهمات القطاعات الرئيسية في هذا الناتج ونموه، إضافة إلى تدفق الاستثمارات ونمو السيولة، وزيادة الاستثمارات الحكومية في مشاريع البنى التحتية».

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 marketing 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.”

Stable prices push sales up at Springs, Meadows

Communities have highest sales and leasing activity due to stable prices and rentals, say agents.

Prices of villas in Emirates Hills range between Dh10 million and Dh25m. (SATISH KUMAR)

The Springs and The Meadows have seen the highest sales and leasing activity within Emirates Living since the beginning of this year owing to stable prices and rentals, according to real estate agents.

Vineet Kumar, Head of Sales, Dubai, Asteco Property Management, said: “The Springs and The Meadows have seen increased sales and leasing activity since the beginning of this year as ongoing sales prices and rental rates for these properties have been stable for the past two months.”

According to Mohanad Alwadiya, Managing Director, Harbor Real Estate, between January 1 and March 18, The Springs and The Meadows recorded 66 sales transactions, marking a 50 per cent increase for the corresponding period in 2009.

He said between January 1 and March 18 last year, The Springs and The Meadows saw 44 sales transactions and during October 1 to Dec 31, 2009, 89 sales transactions were recorded.

Sales transactions up

Alwadiya disclosed that The Greens, The Lakes and The Views recorded 79 sales transactions between January 1 and March 18 this year, marking a 103 per cent increase over the corresponding period last year. “The Greens, The Lakes and The Views recorded 39 sales transactions between January 1 and March 18 last year and a total of 109 sales transactions in these communities between October 1 and December 31, 2009,” he said.

Paul Musson, Residential Sales Consultant, Better Homes, said current sale prices for a two-bedroom and three-bedroom apartment with study and maid’s room in The Springs were at Dh1.1 million and Dh2.2m, respectively. “In The Meadows, current sale prices for a three-bedroom and five-bedroom villa with a study and maid’s room are around Dh2.8m and Dh5.4m,” he said.

“In The Lakes, prices are currently at Dh3m and Dh4.5m for a three-bedroom villa with a study and maid’s room and for a five-bedroom villa with a study and maid’s room, respectively,” he added. In Emirates Hills, prices of villas range between Dh10m and Dh25m, but Musson said the villas are not selling at Dh25m. In The Greens, a one-bedroom apartment is currently selling for Dh680,000 while a three-bedroom apartment is selling for about Dh2.8m.

Musson said the bottom-end of the apartment market is still falling slightly in the studios and one-bedroom apartment segments. “The two-bedroom apartments are still holding up.”

He said demand from buyers in the market today was largely for villas and was no longer just price-driven. “Villas are what buyers want now and not just at the best price. Early this year, buyers were only looking for the best price, now however, end-users want the best unit for the best price.”

Rentals on a slide

Tamara Stubbs, Residential Leasing Consultant for Better Homes, said: “Annual rentals in The Springs range from Dh90,000 for a two-bedroom villa to Dh150,000 for a full lake-view three-bedroom villa.”

She said in The Meadows, rents ranged from Dh180,000 per annum for a standard three-bedroom villa to Dh375,000 per annum for a five-bedroom to six-bedroom villa. In The Lakes, annual rents for a three-bedroom townhouse were at Dh130,000 while for an upgraded three-bedroom villa, rents were at Dh160,000.

In Emirates Hills, annual rents are at Dh280,000 for a four-bedroom villa and at Dh400,000 for a four-bedroom to five-bedroom villa. In Dubai Marina, annual rents are at Dh60,000 for studios to Dh250,000 for a four-bedroom penthouse. In The Greens, annual rents are an approximate Dh40,000 for studios and Dh120,000 for a four-bedroom villa.

Stubbs added: “You can get higher rents for different units depending on the finishing and interiors.”

Alwadiya said the current rental prices within the development are lower than those prevailing six months back by an average of five per cent to 10 per cent. “Sale prices in The Greens and The Views are lower by 13 per cent to 15 per cent. But for villas, prices are slightly higher by around five per cent.”

He added: “Due to the decrease in rental and sale prices by around 35 per cent and 45 per cent that this area witnessed during the past 15 months, we have noticed an increase in demand for all the communities within Emirates Living with a focus on The Greens, The Views and The Springs. This trend was carried over during the first few months of 2010.”

Sahali Saleem, Residential Leasing Consultant, Al Barsha, Better Homes said among the communities, The Greens and The Springs had the lowest number of rentals when compared to the other sub-communities in Emirates Living because of the ongoing road construction.”

Occupancies within the Emirates Living district vary from one community to another. According to Harbor Real Estate, occupancy in The Greens is highest at 85 per cent, followed by The Springs with 80 per cent occupancy levels.

The Views and The Links have about 75 per cent occupancy followed by The Meadows which have 80 per cent occupancy. The Lakes currently has about 60 per cent while Emirates Hills has about 55 per cent occupancy levels.

“The rate of people moving in and out of the development is almost equal. Emirates Living did not witness a sharp drop or a drastic increase in population compared to the same period last year. This was mainly fuelled by the influx of new tenants who upgraded their homes taking advantage of the newly reduced prices,” said Alwadiya.

High occupancy levels

According to Asteco, occupancy levels within Emirates Living have been given a push and currently stand at 75 per cent overall levels as many owners held back selling their properties and instead looked to lease them. “Occupancy is quite high as a majority of inventory has been handed over for more than a year. In our estimate, the occupancy level is above 75 per cent as a lot of inventory has been held back for sale and owners have decided to lease their villas. This has given a push to occupancy levels,” said Kumar.

The villas only pay community fees for the use of common facilities such as parks, pool, landscaping, use and upkeep of roads. “This fee ranges from Dh7,500 to Dh16,000 a year. Maintenance of villas, like any other property, is on the owners’ account,” added Kumar.

Alwadiya said: “The community service fee charges for villas and townhouses are more or less the same. For The Greens, service charges continue to increase. However, the option of payment over four instalments was highly appreciated by many owners in the development.”

Asteco said the overall buyer profile of Emirates Living was a mix of families from all over the world. “The development has a strong presence of clients from Europe, Asia, the GCC, Lebanon and Iran,” said Kumar. “The community is ready and offers convenience for occupants. Villas of two-bedrooms to five-bedrooms are popular for family living.”

Alwadiya said: “For The Lakes, The Meadows and The Springs you cannot define a buyer profile. Nowadays we see different nationalities with different professional and income profiles moving into these areas.”

In Emirates Hills, high demand continues from wealthy South Asian, Russian and GCC nationals. “All of these buyers come with very high budgets and ready cash to pay for their luxury dream homes,” he said.

Master plan overview

Emirates Living comprises The Springs, The Meadows, The Lakes, Hattan, Ghadeer, Montgomery and Emirates Hills. The Emirates Living district also comprises The Views and The Greens.

The Greens are mid-rise apartment blocks comprising nine projects in all – Al Sidr, Al Jaz, Al Nakheel, Al Ghaf, Al Samar, Al Dhafrah, Al Arta, Al Thayyal and Al Ghozlan.

The Views are apartment buildings comprising eight projects in all – Arno, Travo, Turia, Una, The Fairways, The Links, Golf Towers and Mosela.
The Springs comprises townhouses built around man-made lakes. The properties in The Springs range from two-bedroom to four-bedroom townhouses and are located close to The Greens, The Lakes and The Meadows.

The Meadows are detached villas offering double-storeyed villas from three to seven rooms, each surrounded by a garden and garage.

The Lakes are detached villas and townhouses comprising Deema, Furat, Maeen, Zulal and The Ghadeer which was the last to be handed over recently. The Lakes has been built around a lake, located near the Emirates Golf Club and The Greens development. Initially, properties in The Lakes were only for rent, but in 2007, Emaar offered freehold titles to the properties, with first refusal granted to the then existing tenants.

Emirates Hills are luxury-detached villas that have been sold as plots to investor to build their properties on.

The community also includes schools such as the Dubai International Academy, Emirates International School, Dubai British School, Regents School, a community centre, restaurants and supermarkets, children’s playgrounds, and communal swimming pools

Emirates Living residents also have access to the Emirates Hills’ Montgomerie Golf Course and its Golf Academy which includes a clubhouse and other facilities.

JLT and Marina to have 10,200 new units in two years

Nearly 10,200 units will be released in Dubai Marina and Jumeirah Lakes Towers alone in the next two years, according to Harbor Real Estate.

“In 2010, oversupply will be an issue in the market. An estimated 60,000 residential units and 30 million square foot of office space are coming on stream by the end of 2011,” the real estate consultancy said in a report.

“The property scene is facing some significant oversupply challenges. With prices in Dubai for residential properties climbing five per cent from the previous quarter, the perception of the effect of looming oversupply, common knowledge to most people, suggests that for certain investors seeking certain property types, the price is just about right. The first quarter results will bear testimony as to whether this is the beginning of a sustainable recovery trend or a minor blip in the stabilisation process.”

However, the satisfaction of demand has been hindered throughout 2009 by the lack of available credit, tightening of lending policies and the inability of potential consumers to comply with such policies, the report said.

In 2010, the increase in the flow of credit into the market place will be gradual at best. In addition to not having sufficient funds on hand for lending, mortgage providers and investment financiers are still not in a position to fully and confidently assess the level of risk they can prudently assume, mainly due to uncertainty, which surrounds the risk inherent in their current loan portfolios. One of the consequences of a recession is that industries are rationalised.

In 2010, consumers and investors will be extremely cautious, the report said.

“Gone are the days of the easy sale to the investor. Simply put, many people have been hurt by the real estate price correction. In effect, they have developed a risk aversion which will take some time to overcome.”

Confidence in overall investment opportunities will only be achieved this year with increasing levels of transparency. Industry data and laws and regulations regarding developer disclosure and developer communicaons are the bare minimum. In addition, economic data, released in a timely fashion will assist investors assess the feasibility of their intended investment activity by gaining an appreciation of the economic strategies being deployed.

“The legal framework which surrounds and supports the commercialisation of real estate in Dubai has come a long way. The challenge has been to keep pace with the rapid development of the industry. Investors, especially those from overseas need to feel that their rights will be protected and, in case a dispute arises, resolution will be equitable, accessible and timely. There has been significant progress but there is still a way to go.”

Rera has been inundated with disputes arising from project delays, cancellations and investor dissatisfaction with alterations to payment plans and has been successful in providing the facility for dispute resolution. The efficient settling of cases will be critical to restoring confidence looking forward.

The balance of power within Dubai’s real estate scene will have dramatically tipped towards the buyer, probably for a long time.

“Buyers, particularly those with cash are the new kings. This year, real estate professionals will need to serve the customer and serve them well. The main drivers of buyer dissatisfaction have been in the areas of knowledge, consultative ability and empathy. This responsibility does not only lie with brokers but also with developers who must ensure that end-consumer needs are understood,” the report said.

“In addition, they will need to be creative with regards to how they ‘package’ their product to potential consumers because, in the vast number of instances, the consumer now has a myriad of alternatives. And alternatives for investors will not just be located within the local market or even regionally.”

China, for example, is experiencing a real estate recovery of significant proportions, while other nations such as Australia are also recovering well. In the competition for the global dollar, developers need to understand where they stand in the value comparison and ensure that the mistakes made over the past five years where lack of planning, customer focus and attention to market fundamentals are not repeated, the report said.

Meanwhile, landlords and sellers of existing properties will have a role to play as well. The initial presentation of a property is the key to gaining buyer interest. They will have to understand that every potential customer who is dissatisfied results in less revenue for a landlord or seller. In 2010, the professional relationship between a broker and seller is an important one and if both parties actively contribute and collaborate in successfully selling a property, greater returns can be realised, Harbor said.

Last year has been quite challenging for anyone wanting to obtain a mortgage in Dubai. In response to the global financial turmoil, banks tightened their credit policies, reduced lending ratios and increased interest rates.

“It appers the worst may now be behind us and lenders are once again opening up their credit policies. While obtaining a mortgage is still not simple and may not be so for a while, lenders are now more willing to consider applications. Interest rates are also on the way down. The average rate is now approximately 7.5 per cent, down from about 8.5 per cent a few months ago. As the property market stabilises and banks improve their liquidity, we should see further improvements in the mortgage market,” said the report.

In 2010, Harbor expects to see further industry rationalisation and additional considerations being given to mergers and acquisitions similar to the recently abandoned venture between Emaar and Dubai Holding’s real estate subsidiaries.

“The decision not to go ahead with the merger is an interesting one as it still leaves the question as to what degree of rationalisation and restructuring is still to be undertaken within these entities and throughout the industry as a whole. Clearly, a lot of work is still to be done.

“One benefit that the merger would have provided would have been an increased ability to control supply coming into the Dubai market. It is estimated that once the merger was completed, the new entity would have controlled more than 50 per cent of the supply currently in the pipeline causing anti-monopolists to shake their head in disapproval. But the issue remains as supply in the short term will remain as a prime determinant of any progress made to restoring confidence in Dubai’s real estate industry,” said the report.

The year 2010 will be a challenging one for everybody associated with the Dubai real estate industry. The only exceptions are those who have sufficient cash to buy or invest because they will be in an enviable position to exploit the considerable opportunities arising from recession.

World economies in 2010 will emerge from the recession at different levels. And so will Dubai’s economy. Globally, competition will be intense as every country in the world will be looking to grab a lion’s share of the world’s capital as the recovery gathers momentum. Singapore, Shanghai and Hong Kong spring to mind.

However, competition within the Middle East will be just as fierce. In 2010, infrastructural spending will continue to drive the economy funded by an oil price that will annualise at a price of between $75 (Dh275.25) and $85 per barrel.

The real estate industry in Dubai will continue to be stressed as more projects are completed. The Dubai economy will be reliant upon other forms of revenue-generating activities as the economic model of the emirate is re-configured in response to the new realities. Dubai will need population growth, and fast, Harbor said.

It will be the key to economic prosperity and will be determined by the success of growth strategies in its commercial, trade and tourism sectors. With a population declining anywhere between five per cent and eight per cent in 2009, population growth is the primary factor in generating the demand needed to kick start the industry again, the report said.


The introduction of property consolidations and credit notes last year by developers has been positive for the real estate market as it has helped many investors gain ownership of a property more quickly than if they had continued to remain invested in a deferred project, Harbor said.

The practice of credit notes and property consolidations has allowed developers to either cancel or delay projects without totally dissolving the investor’s capital. It has allowed investors to realise returns on their investment a lot earlier than if they had continued to remain invested in a deferred project. Even if some investors lost out on some of their investment, taking the bigger picture in view reveals that more projects are likely to be put on hold or cancelled in Dubai.

In such a scenario, property consolidations and credit notes are helping investors to remain invested in Dubai and start to gain a return on their investment. “We will need to wait and see as Rera is assessing which projects are unviable and should be cancelled,” said the report.

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New property laws help turn Dubai into global destination

Laws and regulations introduced under the directives of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, have transformed the emirate into a more mature market and global real estate destination.

“The vision and leadership of Sheikh Mohammed has positioned Dubai as a global city and one of the most renowned business hubs in a record time. His Highness focused on attracting international investors and building a world-class infrastructure which made Dubai, as we know it today, the location of choice for residents, businesses and visitors,” said Mohanad Alwadiya, Managing Director, Harbor Real Estate.

When it comes to real estate, Dubai set a new global benchmark and has introduced iconic projects to the world that covered all kinds of asset types and interests including the Dubai Media City, Dubai Internet City, Knowledge Village, Burj Al Arab, Emirates Towers, Dubai Marina, Business Bay, Dubai Festival City, Dubai Silicon Oasis, Downtown Burj Dubai, Emirates Living, Dubai International Financial Centre (DIFC), Burj Dubai and the Palm Trilogy.

Sheikh Mohammed’s vision did not start with the real estate developments, he ensured establishing the suitable infrastructure to support the real estate boom and its sustainability. The development of the Dubai Ports Authority, the introduction of Roads and Transport Authority (RTA) and industrial and specialised business zones have contributed to setting Dubai up to become one of the main trading, tourism and culturally rich cities of the world, he added.

Dubai, under Sheikh Mohammed, became the first city in the Gulf Co-operation Council to introduce a real estate regulatory body under the auspices of the Land Department.

The Land Department has continuously strived to keep up with the development and prosperity of the emirate. Through the leadership of Sheikh Mohammed, who always strives to be the best and definitely world-class in everything he plans, guiding with an extraordinary skill, passion and intelligence, the “vision of Dubai” has become the world’s most incredible reality and yet still, there is even more to come.

Supported by Sheikh Mohammed, the Land Department is planning and implementing services to participate towards making Dubai the leading city of the world, the Department said on its website.

The Government of Dubai instituted new rules, regulations and laws in the emirate to regulate the market, to protect the rights and interests of consumers, and to ensure Dubai property investors are assured the highest possible service standards from real estate agents, brokers and property developers transacting business in Dubai and maintain the integrity of all the developments.

The Department launched a number of laws and regulations that regulate the property sector. Starting with Law No7 concerning land registration in Dubai, Law No3 concerning areas of properties that can be owned by non-UAE nationals in Dubai, Law No8 concerning property trust account in Dubai, Law No 85 concerning real ease agent regulation and the upcoming strata law.

Alwadiya said: “The young Dubai property market has come a long way with regards to regulating the real estate industry. While the efforts to protect rights, lift standards of professionalism and establish a transparent, credible and functional framework are to be applauded, there is still a long way to go before the industry can be said to be in the final stages of maturation.

“Over the past years, the government has adopted numerous legislations and regulations to protect everyone in the real estate sector, and most importantly establish a safe environment for investors. Dubai has proven to be the world’s greatest improver in terms of real estate transparency over the past two years. With the establishment of regulatory bodies such as Rera, investor representative bodies, the establishment of codes of practice for real estate practitioners combined with laws relating to freehold ownership, escrow accounts and strata titling, Dubai has reduced drastically the concerns of expatriate and foreign investors,” he added.

Transparency has also been given a boost with the introduction of the credit information law, a positive step towards transparency and risk mitigation for banks. The law will create a framework of rights and obligations for data providers, information users and individuals alike, Alwadiya said.
Saeed Mirsaeedi, Investment Manager of Sherwoods Real Estate, said: “Introduction of new laws has been a positive development and has helped Dubai’s emergence as a mature and prosperous economy.

“Clear-cut regulations and increasing transparency make Dubai property most attractive to overseas investors,” he said.
Although previously non-Gulf Co-operation Council expatriates were only permitted to rent property, or own property on a 99-year leasehold basis, all changed in 2002 when the Dubai Government took the initiative and permitted the ownership of freehold property to expatriates. This bold initiative changed the perception of the real estate industry in the Middle East and the Gulf.

The Dubai Government began the promotion in 1997 by setting up Emaar Properties. The next year, Emaar began work on Dubai Marina followed by the Emirates Living Community developments such as the Springs, the Meadows, Emirates Hills, etc. However, the major property boom in Dubai occurred in May 2002, when Sheikh Mohammed issued a decree to allow foreigners to buy and own freehold property in selected areas of the city, now referred to as New Dubai.
On March 14, 2006, Dubai’s Government issued a law legalising foreign ownership of properties in designated areas of Dubai.

“It was the adoption of freehold tenure in general, and foreign ownership in particular, that sparked the great real estate boom in the Dubai property market,” said Alwadiya.

The introduction of the freehold law by the Ruler transformed Dubai into a true success story capturing the imagination and admiration of countries worldwide. Many countries followed the Dubai model and benefited greatly from its visionary experience.

Dubai has developed several iconic real estate projects, which have acquired international recognition, marketing the emirate as a destination of choice for business and travel and for investment in real estate.

The Palm trilogy and other iconic projects such as The World have put Dubai in international limelight. Furthermore, prospective developments of creative concepts, which are likely to attract significant visitors in the coming years, continue to take shape. Burj Dubai, the tallest tower in the world, will be opens today. Although Dubai International Financial Centre formally opened as a global financial centre in 2004 with the aim to become the global hub for financial services in the Middle East, it has also emerged as one of the most expensive addresses for real estate in the emirate.

In fact, property prices on residential units in the DIFC are becoming increasingly comparable with the leading capitals of the world. Dubai’s real estate industry dynamics are firmly entrenched in Dubai Strategic Plan, which strives to achieve a medium-long term objective of diversifying the economic base of the emirate in key growth areas, which have been defined as priority sectors within the associated blue print. Of particular significance is the focus of the plan on the real estate development and the construction sector, as well as travel and tourism, with the former providing necessary infrastructure for growth of all other businesses, and the latter ensuring sustained economic buoyancy through continuous and aggressive growth in visitors to the emirate.

The investor-friendly business environment in Dubai has promoted not only businesses but also a demand for office space, and the high real incomes have ensured that the labour force is increasingly imported from abroad, thus catalysing requirements for housing and retail.

Iconic projects

Dubai has introduced some of the most iconic destinations that cater for different lifestyles and asset categories. Some of them in the business and commerce segment are the DIFC, Business Bay, Dubai Internet City, Dubai Media City, Knowledge Village, Dubai Silicon Oasis, Dubai Maritime City, Tecom, Jebel Ali Free Zone and Dubai Healthcare City.

In entertainment, lifestyle and culture segment falls the Dubai Festival City, Downtown Burj Dubai, Emirates Living, Dubai Mall, Ibn Battuta Mall, Palm Jumeirah, Burj Dubai and Dubai Marina.


Residential prices to stabilise on long-term buying

Residential real estate prices are likely to stabilise in 2010, with buyers investing for the long term, according to property agents.

“Prices across villas and apartments will stabilise in 2010. Moreover, buyers investing in residences in Dubai will enter on a long-term basis, indicating a less speculative interest in the emirate,” said Mohanad Alwadiya, Managing Director of Harbor Real Estate.

However, challenges to the real estate sector continue to remain. Alwadiya said: “While mortgage financing is easing, it is still limited in availability. Banks are lending but only to people with certain fixed profiles and according to rigid criteria. For example, people working in the real estate sector find it hard to source funding because of the risk associated to their job. Also, infrastructure in many developments needs to keep pace with the progress of the development.”

Vineet Kumar, Head of Sales at Asteco, said: “The buying trend has been towards ready properties, and mortgage finance is available for most projects from leading mortgage providers. Interest rates are in the range of 6.5 per cent to 10 per cent. Occupancy levels in developments handed over are generally in excess of 70 per cent. Locations such as Dubai Marina and Downtown Burj Dubai are being preferred by young families, while larger families have a preference for large villas in locations such as Emirates Hills and Jumeirah Islands.”

Just ahead of the new year, Emirates Business picked 12 residential projects in Dubai that received interest from potential property owners and tenants in the past 12 months. Some of these projects saw increased sales and rental transactions while some projects, such as Burj Dubai by Emaar Properties and the Villa Project in Dubailand by Al Mazaya Real Estate, are gathering a lot of interest just ahead of their handover.

Other major factors noted have been population shifts from other emirates and other developments in Dubai’s Discovery Gardens and International City projects.

“The reason for this is the attractive rental prices within these developments. In fact, recently, large corporates have looked to lease multiple units for their mid-level staff in International City,” said Alwadiya.

“The Motor City development, too, has witnessed an increase in occupancy rates from end-users and tenants seeking affordable and value-for-money residential units. Influx of people from neighbouring emirates, such as Sharjah, Ajman and Abu Dhabi, has further fuelled growth in occupancy rates within the development.”

How mergers could save the property and financial sectors

Mohanad Al Wadiya, Managing Director of Harbor Real Estate Brokerage, shares his thoughts on upcoming mergers

For many players in the local market, mergers and acquisitions appear to be a logical solution to stay afloat during the global financial crisis. Opinion is divided as to whether these mergers and acquisitions will have a positive or negative impact in the short and medium terms, and it is too early at this stage to predict success or failure. Nevertheless, it seems clear that without these actions, the result would be a freeze in financing facilities and diminishing activity in the property sector, which would have an adverse effect on the overall economy.

Within the financial sector, these kinds of mergers really started as early as last year. It all began when Amlak and Tamweel announced a merger to create Emirates Development Bank in November 2008. The new bank will have access to federal funds and hopes to strengthen the UAE’s home finance sector. The merger news gained considerable media attention and created veryhigh expectations.

In terms of property development, we have seen similar mergers within the last year. Dubai World, the major property and ports conglomerate, recently consolidated its management and property operations of Leisurecorp, Dubai Maritime City, and the Dubai Multi Commodities Centre, all of which it owns. The property divisions of these companies will now be run by Nakheel, another property arm of Dubai World.

There is also continued discussion of a merger between Deyaar Development and Union Properties, with news about the latter having liquidity problems and losing its long-time chief executive recently.

While these developments are important for the sector, the most significant merger in the region is currently being discussed between Dubai Holdings’ ‘Big 3’ companies and Emaar, a most popular developer in the Middle East. Dubai Properties, Tatweer, and Sama Dubai—collectively known as ‘The Big 3’—are fully-owned subsidiariesof Dubai Holding Commercial Operations, a holding company of Dubai Holding Group with total assets of Dh126bn at the end of 2008, as quotes by Emaar.

There is a growing consensus among the officials involved that allowing healthy businesses to acquire companies in jeopardy of failing could stabilise the economy by bolstering confidence in both the financial and property sectors. For some of these companies, merging with a partner that has a strong balance sheet is a pressing and essential step in preventing dissolution. Other benefits include leveraging economies of scale and having stronger negotiation positions with regard to suppliers and contractors. The mergers will allow companies to work together to achieve long-term, strategic benefits by uniting complementary businesses into a single, sufficient and more successful operation. For the property sector, these mergers will also allow consolidated companies to have better control of the overall supply introduced into the marketplace and the quality of the products and services offered. This will definitely have a positive impact on the market in the long run.

On the other hand, there are concerns that these mergers will place heavy burdens on the stronger companies
involved. These partners are not just taking over assets, but may also be inheriting large liabilities and debts. Furthermore, these mergers are likely to generate a lot of uncertainty among the investors and shareholders involved. Investors might have to accept further delays until these mergers are finalised, and will then have to evaluate the impact of the mergers on their investment.

Whatever the impact, the number of mergers involving financial and property organisations is increasing. For these new companies, the ability to provide prompt, transparent, and practical information that guide all stakeholders through the merger process and expected outcomes could make the difference between success and failure from the public’s point of view.

Meadows, Jumeirah Islands top sales transactions

Villlas in The Meadows, Jumeirah Islands and Arabian Ranches have seen increased sales transactions in the past one month. Among apartment buildings, Dubai Marina, Jumeirah Beach Residence (JBR), Downtown Burj Dubai and Jumeirah Lake Towers (JLT) have recorded the maximum number of sales transactions.

“Among villas, Meadows, Jumeirah Islands, Arabian ranches recorded the highest transactions, while from an apartment perspective, Dubai Marina, JBR, Downtown Burj Dubai and JLT have recorded the highest transaction,” Peter Penhall, Chief Executive, Gowealthy.

Gowealthy recorded 20 per cent incremental growth in transactions for November, from October figures.

Vineet Kumar, Head of Sales, Asteco Property Management, said: “The top three residential areas, which have witnessed the most transactional activity in the month of November for apartments sales, have been The Palm Jumeirah, Dubai Marina and Downtown Burj Dubai areas. “The locations which witnessed the most transactional activity in the month of November for villa sales are The Emirates Living Area, Arabian Ranches and The Green Community.”

Kumar said the total number of transactions Asteco supported in the month of November was 48 individual sales. However, some of these transactions were single investors purchasing multiple units so the overall unit numbers were higher than this.”

Liz O’Connor, Director-Residential Sales and Leasing, said: “From a sales perspective, among the villas, Springs/Meadows, Jumeirah Village, Jumeirah Islands stood apart and in the apartments category, it were Downtown Burj Dubai, Jumeirah Beach Residence and Dubai Marina.

“From a rental perspective, Emirates Living [Springs, Meadows, JLT, Discovery Gardens, Jumeirah Village], Marina [JBR, Marina], Dubai Land [Arabian Ranches, Motor City, Sports City] have recorded high number of transactions.”

The sales were about 40 and leases are about 250, according to Better Homes.

According to Mohanad Alwadiya, Managing Director, Harbor Real Estate, Emirates Hills Third and Palm Jumeirah are the areas that have recorded maximum transactions.

According to Penhall, predominantly South Asian (Indians, followed by Pakistanis) have invested into these areas. The GCC nationals form the next largest set, followed by South East Asians/Chinese. “Most of them were end users and finance buyers,” he added.

According to Kumar, the buyer profile has been predominantly the end user. However, there were a few buyers based overseas who have bought properties for rental income purposes with a view to holding their real estate assets for the mid-term (5-7 years). “The buyers on these projects were mixture of individuals from the GCC countries, Russia, India, Pakistan and Western Europe,” he said.

O’Connor said these areas have mostly seen end-users, pre-qualified for a mortgage but those who have access to additional funds to cover the difference if the evaluation of the property was less. We deal with many cash buyers who are looking for the best priced properties in today’s market.”

With respect to price floor in these areas, Penhall said that for a higher trading areas such as well-located villas in Meadows and apartments in certain towers at Marina, expectations are being met to a large extent due to the relatively higher availability and demand parameters. “The selling prices are neither too far out of present reach-market getting more matured, buyers and sellers are getting quite pragmatic on their price expectation factors.”

He added that however, the point to be noted here is that currently, price factors are an indication of distress levels of individual sellers and should not necessarily be construed as a market price index for a particular type of property in a particular community.

Kumar said the sales activity on these projects have tended to revolve around the owners and sellers of properties who have purchased them in the years prior 2008. “Typically these properties can be sold in today’s market with some expectation of premium,” said Kumar.

Alwadiya said mixed nationalities of end-users and investors have invested into these areas. “In general, buyers are more demanding and careful nowadays compared to last year and the previous years and hence they do enough due diligence before purchasing any properties.”

According to Better Homes, the buyer is always looking for the best priced property/value for money.

“We have not seen major prices changes sine the last three month – prices have stabilized in certain areas and you can always find very well priced properties in all areas of Dubai,” she said.