Blog

ASK THE AGENT.

Q 1: Given the recent rise in demand, are there any advantages now by buying “off plan”?
Michael P. – Dubai

A 1: Off plan opportunities should not be dismissed and an increasing number of astute buyers are buying properties which are nearing completion, usually within the ensuing six months.

These buyers are very discerning. They are usually looking for certain property types which they believe will be keenly sought in the future, and villas are now heavily in vogue for the “off plan” opportunists.

Relative to other property types, demand for villas has been grown rapidly in the last 18 months and, given the current short supply and limited number in the pipeline, that trend is expected to continue going forward.

By buying “off plan”, the buyer hopes to reap the benefits of price rises once the villa is completed and making an immediate return on investment of anywhere up to 20% just 6 months after purchase. The key is to picking the right asset type, in the right development at the right price.

Q 2. which would be the better investment, purchasing a 2 bedroom apartment in the Dubai Marina or something similar in JLT?
Marcus Z.

A 2. Apartments in Dubai Marina have witnessed strong capital appreciation of around 15% since the start of 2012. This growth is a continuation of a trend which began early in 2011 and we expect it to continue as demand for properties in prime locations continues to strengthen so, if purchased wisely, you are likely to enjoy healthy capital growth going forward.

You can purchase a good quality apartment in a well managed building for around AED1000 to AED 1,300 per sq. ft. Once owned, you can expect to pay around AED15 per sq. ft in service charges and can expect to generate anywhere between a net return of 5.5% and 7.0%.

Apartments in JLT have not fared as well as their Marina counterparts. While cheaper at anywhere between AED750 and AED950 per sq. ft., the rate of capital growth in JLT has been nowhere near that of the Dubai Marina. Service charges will be lower at around AED11 per sq. ft. and net rental returns of 5% to 7% can be achieved particularly if you purchase in one of the better quality buildings.

On balance, I believe Dubai Marina, particularly those buildings located within easy walking distance to the JBR walk, to be the better alternative.

Q 3. The Rental Scam in Dubai has been all over the news recently. What precautions should I take to ensure I don’t get scammed?
Mike H, Dubai

A 3.
1. If renting directly from the owner, verify the owners identity

2. Make sure the person claiming to be the owner actually does own the property

3. Utilize a standard form of contract. See www.ejari.ae/PublicPages/DownloadPdfTemplates.aspx

4. Ask to see the agent’s Dubai Real Estate Institute registration credentials or go to www.dubailand.gov.ae/English/Real_Estate_Licenses/EngLessons.aspx which displays a complete list of registered Real Estate Agents

5. If the broker is a signatory to the rental contract, make sure that you see a notarized Power of Attorney from the owner

6. Check out the Real Estate Company credentials by accessing www.dubailand.gov.ae/English/Real_Estate_Licenses/EngLessons.aspx

7. Ensure the name of the owner on the contract is the same as the owner on the title deed

8. Ask to see proof that Service Charges have been paid and are up to date

9. Make sure you register new rental contracts with the Land Department on www.ejari.ae/TenantCertificate/Tc_certificate_registration.aspx

10. Read the contract terms and conditions carefully and understand your rights and liabilities as a tenant. These can come directly from the landlord or imposed by the OA of the community you rented within.

visit : http://www.harbordubai.com/presspage.php?pg=press&cat=A&nid=223

The protection of tenants against unjust eviction

With the recent surge in rental rates in areas such as Dubai Marina, Downtown and The Palm, stories are starting to emerge of landlords wishing to evict tenants in order to, presumably, take advantage of the opportunity to place hefty rental increases on properties. This practice is not new and was around in the pre-recession period when rental increases desired by landlords were out of control.

Law No.33, Article 25(2) provides protection to the tenant by stipulating under which circumstances a tenant can be evicted.

If the landlord wishes to demolish the property or conduct construction which makes it impossible for the tenant to use the property, the landlord has grounds to affect an eviction.

Similarly, if comprehensive maintenance needs to be carried out on the property which cannot be undertaken while the tenant is in situ, the landlord can evict the tenant upon the provision of a technical report accredited by the Dubai Municipality.

Meanwhile, the landlord has the right to evict a tenant if the landlord wishes to use the property for his or her personal use and for the use by a next of kin. The landlord will have to prove that the landlord does not have access to an alternative property as a suitable alternative.

Finally, if the landlord wishes to sell the property, he or she is entitled to evict the tenant.

In all of the above cases, the tenant must be given at least 12 months’ notice of the eviction and the reasons and necessary documentation supporting the notice to evict, at least 12 months prior to the expiry date of the tenancy contract.

BY MOHANAD ALWADIYA
Managing Director
Harbor Real Estate.

UAE’s real estate market robust

DUBAI: Sentiment in the UAE real estate investment market improved during the second quarter (Q2) of 2012, boosted by the rising availability of funds for investments, reports RICS in its latest Global Commercial Property Survey.

On the investment side, purchaser enquiries rose for the second consecutive quarter and transactions are forecast to rise in the coming months. Significantly, expectations for capital values in the UAE for the third quarter show a modest increase for the first time since 2008.

According to the RICS survey, 16 per cent more respondents indicated that money available for investment in real estate increased during the second quarter of the year.

Meanwhile occupier demand, led by an active retail sector, continued its rise, though at a slightly slower pace.

New supply coming on to the office market adds to existing stocks so that despite the recovery in demand the oversupply situation continues to impact upon rental expectations.

Elsewhere, following on from strong first quarter results, the real estate market in North America and Canada has remained buoyant in both occupier and investor markets despite the global economic slowdown.

China and Hong Kong also appear to have relatively resilient occupier markets for the time being. However, once again, the survey shows a generally weaker picture across Europe, with signs of stress spreading from the periphery to other markets.

Greece, Spain, Portugal, France and Italy in particular showed signs of distress during this quarter of the year, with both sentiment and activity levels suffering on the back of elevated uncertainty.

Commenting on the latest survey results, Simon Rubinsohn, RICS Chief Economist, said: “It is encouraging that there are now some tentative signs of a turn in the real estate market in the UAE. At the moment, this is more visible in the investment market and it will take some time to work off the excess space that has built up in recent years.” “As a result, it may be premature to envisage any upturn in rent levels but after a torrid period, the indications are that that they are at least now close to stabilising,” Simon Rubinsohn added.

In a continuation of its recent strong performance and with a total value of over Dhs2 billion, Dubai’s Real Estate industry achieved the highest number of unit sales and corresponding total unit value for any month of July on record according to data sourced from the Dubai Land Department.

With 1,767 transactions, the industry saw over 193,629 sqm (2.084Mill sq ft.) of property units sold during the month showing demand for Dubai property units continues.

Consistent with recent trends, the top performing areas were Dubai Marina, Downtown and JLT where the combined value of the transactions from these areas accounted for approximately 67 per cent of the total value of unit transactions during the month.

“The recovery is certainly with us,” said Mohanad Alwadiya, Managing Director of Harbor Real Estate in Dubai. “Confidence is returning to the market and, when considering the latest reports regarding healthy profits and renewed activity by several leading developers, the industry is certainly looking vibrant again.”

Alwadiya was referring to announcements made recently by Emaar regarding an 82 per cent surge in profits in the first half of 2012 along with renewed interest in developing a townhouse project in Dubailand.

Nakheel has also returned strong profit growth for the first half of 2012 up 36 per cent from the same period last year.

The company, restructured as a result of the global financial crisis, is also planning new developments based upon the resurgence in demand for Dubai property.

“We have all been waiting for this time, when optimism based on growing confidence would return to the market,” said Alwadiya, who added, “The growth trend is looking very exciting.”

Dubai’s Real Estate industry achieve total value of over Dhs2bn

Harbor Real Estate in Brief:
Harbor Real Estate is a fully integrated real estate service provider based in Dubai and part of an established world class group of real estate companies since 2001. With a strong reputation and a veteran team with over 15 years of experience in the industry, Harbor Real Estate provides Integrated Marketing, Sales and Leasing Services, Innovative Property Supervision Management Services and Complete Property Inspection & Snagging services.

Having served over 5,000 satisfied customers, Harbor has an extensive clientele base that consists of public and private entities, major developers, private and institutional investors and owner-occupiers.

In 2009, Harbor Real Estate Brokerage established a quarterly real estate report “The Harbor Report”. This candid report covers the latest news, developments and trends in the real estate industry with an in-depth analysis of the latest topics and current affairs.

For More Information, please contact:
Lorie Ann Paul
Office Manager – Harbor Communications
T: +971 4 325 1616
Source Article from http://www.ameinfo.com/strong-july-dubai-real-estate-308114

Strong July for Dubai Real Estate

In a continuation of its recent strong performance and with a total value of over 2 billion dirhams, Dubai’s Real Estate industry achieved the highest number of unit sales and corresponding total unit value for any month of July on record according to data sourced from the Dubai Land Department.

With 1,767 transactions, the industry saw over 193,629 sqm (2.084Mill sq ft.) of property units sold during the month showing demand for Dubai property units continues.

Consistent with recent trends, the top performing areas were Dubai Marina, Downtown and JLT where the combined value of the transactions from these areas accounted for approximately 67% of the total value of unit transactions during the month.

“The recovery is certainly with us” said Mohanad Alwadiya, Managing Director of Harbor Real Estate in Dubai. “Confidence is returning to the market and, when considering the latest reports regarding healthy profits and renewed activity by several leading developers, the industry is certainly looking vibrant again”
Alwadiya was referring to announcements made recently by EMAAR regarding an 82% surge in profits in the first half of 2012 along with renewed interest in developing a townhouse project in Dubailand.

Nakheel has also returned strong profit growth for the first half of 2012 up 36% on 2011. The company, restructured as a result of the global financial crisis, is also planning new developments based upon the resurgence in demand for Dubai property.

“We have all been waiting for this time, when optimism based on growing confidence would return to the market” said Alwadiya, who added “The growth trend is looking very exciting”.

To read live news open this link: http://www.ameinfo.com/strong-july-dubai-real-estate-308114

I am domiciled in Germany and thinking of investing in an apartment in Dubai. I would rent out the property initially, and intend to use it myself when I retire. Can you advice me on what I should consider?

Q1: I am domiciled in Germany and thinking of investing in an apartment in Dubai. I would rent out the property initially, and intend to use it myself when I retire. Can you advice me on what I should consider?

A1: I am assuming that proximity to the beach would be preferable for you. The income you will receive from this investment will be greater since the majority of tenants aspire to live near a beach. It also opens up the option for short-term rentals. If the property is managed well by a professional agent, this strategy can provide you superior returns.

Jumeirah Beach Residence. Dubai Marina or the Palm Jumeirah all offer a sought-after lifestyle, while providing excellent amenities and entertainment options. These developments are very popular with holiday makers, residents and retirees alike. Quality properties are available in the range of Dh 800 per sq.ft to Dh 2,500 per sq.ft.

You should expect a minimum net rental return of around 7%, which makes for a solid investment in preparation for outright ownership upon your retirement. Diligence is required with factors such as location, the developer’s record, quality, service fees, building management and the existence of a functioning owner’s association.

Q2: There is news that Dubai’s real estate decline has bottomed out and excellent opportunities exist in villa investment. I am looking for a villa in the Dh 3 million to Dh5 million price range. Can you make a recommendation?

A2: After years of decline, research shows that prices for villas in Dubai are starting to stabilize and have even increased in sought-after neighborhoods.
A fair proportion of the demand is focused on locations such as Arabian Ranches, Palm Jumeirah, Emirates Living communities (i.e The Springs, Meadows and Lakes) and Emirates Hills, More affordable villas can be found in developments such as Falcon city, The Villa project, Sports City and Motor City in Dubailand, where prices are often up to 30% less than in established communities.

The Villa Project in Dubailand has become a much sough-after community. The primary attraction of buying a unit there is that it offers good value for money. One can purchase a large, brand new villa at a relatively lower price in comparison with most similar-sized properties in other parts of Dubai.
Superior value for money has been reflected in very healthy capital gains for owners. A 4-bedroom unit in The Villa cost Dh1.9 million in August 2011, but the same unit today is worth Dh2.8 million. Likewise. Rentals have also gone up. A 4-bedroom villa that used to be rented for Dh 120,000 in August last year is now available for rent at Dh 165,000.

Q3: Will the prices go up or down in the rest of 2012:?

A3: Overall stability has returned to the market as far as prices are concerned, while good quality developments have witnessed price appreciation and increase in rents. The villa segment, in particular, has seen sales prices and rents increase mainly due to a combination of increased demand and relatively limited supply. Villa price increased mainly due to a combination of increased demand and relatively limited supply. Villa price increases in Q1 2012 versus the prior quarter were in the range of 5 to 12%, depending on the development. Top performers were the The Villa Project, Emirates Hills and Arabian Ranches.

Apartments rates around the city have generally stabilized as well. However, some areas such as Silicon Oasis, International city and Dubai Investments Park will remain under pressure due to new supply added to a segment which is already oversupplied. Having said that, locations renowned for their lifestyle appeal such as Dubai Marina. JLT and JBR, or the more affordable and up and coming Skycourts, have shown a lot of promise with quarter-on-quarter increases of 3% to 5%.

http://www.harbordubai.com/press.php?pg=press&nid=202

Great News for All Palm Jumeirah Investors

Villas and Apartments at the Palm Have surely outperformed similar properties in Dubai

By Mohanad Alwadiya
Special to properties

Property owners at the Palm can now breathe a little easier. On the average, villas have increased in value by 23%year –on- year at the end of the first quarter of 2012.Some villas have even managed to reach their pre-recession values. This performance outstrips the market average where villa values are estimated to have grown to around 13%. Apartment prices in Palm Jumeirah increased by 9% to 13%, depending on the configuration, easily outperforming the average price increase in similar properties across the emirate.
But a project will never attain its true value until its completed .Nakheel, fresh from sorting out its debts woes announced a first quarter 2012 profit almost $100 million causing some eyebrows to raise, not just in amazement at the embattled developer’s comeback, but in curiosity about what’s in store at The Palm.
The answer lies in the project known as Palm Views East and Palm Views West. They will comprise of 190 studios catering to a ‘younger occupier ’demographic. In a strategy seemingly aimed primarily at investors instead of owner-occupiers, Nakheel will be charging around Dh1 million for each of the studio properties. Each apartment has an approximate gross area of 500 square feet. While definitely more affordable than the traditional Palm property, approximately priced at Dh2,000/sq.ft., these studios continues to reflect the premium expected from such a location. If an investor intends to retrieve a net return of 7% on a studio, he would be renting the same for around Dh85, 000 to Dh90, 000 per year, depending on service charges. The units are not outrageously expensive (check out a studio in a comparative location in Hong Kong) but not exactly cheap either. Nakheel expects to hand over the apartments, along with a selection of retail and food outlets, in the first quarter of 2014.

If you are a current property investor in the Palm, this is great news. The Palm’s overall performance and these new projects offering residential and retail spaces are sure to attract more people into The Palm. Nothing drives investment more than confidence.
The writer is the Managing Director of Harbor Real Estate

Handy Hints
• Apartment prices in Palm Jumeirah increased by 9% to 13%
• Villas increased in value by 23% by the end of the first quarter in 2012
• The Palm Views East and West cater to a “younger occupier” demographic

Will the prices of 2008 ever come back, and if so, when?

Mohanad Alwadiya
Managing director of harbor real estate and part-time instructor at the Dubai Real Estate Institute.

Q1. Will the prices of 2008 ever come back, and if so, when?

A1. Dubai real estate face values fell, on average, by 50% during the recent global recession. In some area, it was closer to 33%, and in others, closer to 65%, depending on the location an proerpty type.
For smiplicity’s sake, however, let’s assume that 50% is the representative value.
An investment needs to grow at approximately 7% per annum, compounded for 10 years to double in face value. Assuming your property consistently appreciates at 7% per annum, you would need to wait approximately 10 years for the face value of your real estate asset to double.
Many factors will contribute to this growth, including the pace of global economic recovery, regional economic and geopolitical factors, and of course, Dubai’s own growth strategies.
Don’t forget that one of the advantages of investing in real estate is that it can provide you a regular income and capital growth. Some properties in dubai today are returning between 7% and 9% net to the owner. This type of return is hard to match anywhere else.

Q2. I’m looking to rent a house, but I found that it has district cooling. Is this something good or bad?

A2. District cooling for the provision of chilled water has emerged globally as a way to provide cooling in a more environmentally sensitive way. Aside from the obvious benefit of having chilled water. Especially in the summertime, it helps in saving on the costs of electricity which will be reflected in lower DEWA bills for tenants.
However, the DEWA savings will be somewhat offset, as the overall utility chares of units that are equipped with chilled water district cooling will be slightly higher, since they include expenditures for fixed operating costs via the application for the appropriate consumption charges.
Most units which are serviced by chilled water district cooling are still offered at lower rental rates. If you look at newly-completed projects such as Skycourt, Rita and Moto Ciry, which provide this form of service, the affordability o units in these properties is enhanced by a number of elements, including more energy efficient cooling.

Q3. I would like to invest in a Two-bedroom apartment in Burj khalifa, but I’m not sure if that is a sound decision or not. What’s your advice?

A3. I am assuming that you are not referring to an apartment at the Armani Residence, and you are taking a long-term view of your investment.
The rate of return will depend on a number of factors, including the initial purchase price, cash inflow from the rent, cash outflow from the charges associated with maintaining the property and your projected capital growth.
Two-bedrooms (with maid’s room) in the Burj Khalifa are being advertised for around Hd3,000 per sq.ft., depending on the floor and view. Therefore, you will be looking at an outlay of approximately Dh 6 million for a reasonable-sized apartment. Service charges will be around Dh33 per sq.ft., so you will need to cash out around Dh66,000 annually.
Assuming you wish to achieve a minimum of 5% net rental return, you would need to charge around Dh366,000 per annum or Dh30,500 per month. Values in Burj Khalifa have virtually bottomed out and there have been positive signs of capital appreciation over the last 12 months. Barring a collapse in the credit markets and the recurrence of a global recession, you could reasonably expect an average capital growth of around 7% over the next 10 years.
This is particulat investment can be very lucrative. You will be investing in an architectural icon which will always give some measure of security because of its apparitional qualities, that even after taking a long-term view, the risks would appear to be of secondary importance to its value.

Lease rates in Dubai vary dramatically

Lease rates in Dubai vary dramatically
Landlords get increasingly creative in attracting tenants with options
By: Mohanad Al-Wadiya
Special Properties
Lease rates have finally stabilized based on the performance of the office property segment over the last four months. Having fallen dramatically since 2008, average office rental rates seem to have finally bottomed out.
While landlords have been under pressure to rent out available space with a reasonable return, business owners have been the big winners. Virtually every organization required some form of restructuring after the recent global financial crisis. For many, restructuring entailed in- depth cost reviews and significant downsizing, requiring relocation to premises offering reasonably priced space. The savings are significant, with as much as a 50% reduction in the rental cost for some companies. For some businesses, this is very important as space rental may have comprised up 35% of their fixed costs. This has tempted many firms to relocate simple because of the positive effects to the bottom line, much to the delight of those I the office design, fit- out and furniture industries.
Lease rates still vary dramatically depending on location, with top-of-the-range DIFC office averaging at DH240/ sqft, TECOM non-free zone A and B at Dh100/sqft, Business Bay at Dh70/sqft and JLT space available at Dh40/ sqft.
However, the reasons for moving offices may not be purely based upon cost per-square foot. Location, proximity to clients, building quality and peer proximity are also prime considerations. In addition, landlords are getting increasingly creative in attracting tenants with options, including favorable payment structures, reduced service charges, refurbishment cost assistance, extra parking allocation and exterior advertising.
As Dubai seeks to grow economically, the readily available and cost competitive office space makes it well-placed for business.
The writer is the Managing Director, Harbor Real Estate
Handy Hints
-Average office rental rates seem to have finally bottomed out
-Reasons for moving offices are no longer just based on price
-Location, proximity to clients and quality are deciding factors

Dubai Real Estate and the global market The Effects of external factors on the local property market are real

Dubai Real Estate and the global market
The Effects of external factors on the local property market are real
By Mohanad al-Wadiya
Special to Properties
There have been encouraging signs of recovery in the real estate industry. However, in some ways, the indicators are dependent on the relationship between the UAE dirham and foreign currencies.
Much of the growth in real estate investment has been attributed to foreign nationals, predominantly those from India, UK and Pakistan, who obviously saw the regional and global competitive advantages of buying property in Dubai.
However, in 2008, prior to the identification of the state global recession, around 11 Indian rupees were equivalent to 1 UAE dirham. For most of 2011, the exchange rate ranged between 12 and 12.5 Indian rupees to a dirham, before rising sharply in the first quarter of 2012 to arrive at the prevailing rate of approximately 15 rupees to a dirham.
Not only will the devaluation of the rupee make investing the currency in the local property market less attractive, a likely increase in the level of repatriation of dirhams earned in the emirate back to India, will also have a dampening effect.
Also, the world markets have developed mechanisms that are quick to adopt risk-averse attitudes, especially during volatile economic times. Any strengthening in the dollar versus most currencies around the world favorably affects the UAE dirham – and this is just one example of how the ‘outside’ affects the ‘inside’. It is important for the local industry to be aware of and understand the global dynamics influencing the local market. The effects of external factors on the local real estate industry are very real, and it would be prudent for all concerned to have contingency plans that will minimize any risk to market recovery and development.
The writer is the Managing Director, Harbor Real Estate
Handy Hints
– Markets have mechanisms that adopt risk- averse attitudes
– The local industry must understand global market dynamics
– Growth in real estate investment us mainly attributed to expats