Right time to grow your portfolio

Even though some buyers continue to maintain a ‘wait and see’ approach as property prices continue to soften, if you have invested in Dubai property, especially in key growth areas, then hold on to your portfolio. In fact, we would advise you to, if possible, add to your portfolio.

Dubai’s economy is still doing very well although the IMF forecast for UAE economic growth this year is down to 3 per cent compared to last year’s 4.6 per cent, which is quite understandable considering the after-effects of the recent oil price slump on economy. Having gradually weaned the country away from overdependence on oil, the UAE remains in a good fiscal position as it proceeds with economic diversification.

The UAE economy is being driven by tourism and trade, and a slew of successful new projects that will complement these important revenue-generating economic segments which continue to be a primary feature of Dubai’s growth outlook. In 2014, Dubai welcomed over 12 million visitors, continuing a growth trend of approximately 9 percent per annum since 2010, a statistic which is the envy of many nations.

The ‘soft landing’ of the UAE economy is by no means bad news as it is simply indicative of more gradual sustainable growth overall which, in turn, is supported by the following factors:

The market is in a healthy state of revaluation and consolidation, not recession. The reduction in growth rates is necessary to ensure the type of sustainable, profitable growth that long-term investors seek becomes a recognized characteristic of the Dubai market. The market has demonstrated its maturity and resilience by recovering post-global financial crisis and is now adjusting to more sustainable value appreciation levels.

Strong demand for property. When you are investing in real estate, you are actually investing in the economy, and the effect of the 2020 Expo on the UAE economy cannot be underrated in terms of generating demand for real estate assets. Hosting the World Expo will provide additional impetus for the industry to enjoy continued growth, and the predictable surge in demand for accommodation and commercial space of all types, from labor camps to offices to warehouses to apartments to executive villas, is sure to have a significant effect on property values.

Investor appetite and confidence remain for off-plan and under-construction projects especially for those launched by reputable developers. Outside of tier one developer-led schemes, there has been strong performance in recent launches outside of prime locations and emerging areas.

The low mortgage rates of today are unprecedented and, notwithstanding possible interest rate rises in the US later this year as the dollar continues to strengthen, will still be affordable in the ensuing five years. We should remember that affordable finance and demand for real estate assets are inseparable.

The market is approaching maturity. The on-going development of the industry’s regulatory framework and the implementation of laws to safeguard both consumer and investor interests, and the overall industry and economy at large from rampant and irresponsible speculative, predatory or unethical practices, reveal a mature and balanced approach to shaping an industry which will exhibit sustainable growth over the long term.

If it’s superior yield with minimal capital outlay that you are after, Dubai real estate is still hard to beat unlike older established cities like Hong Kong and Singapore which currently suffer from high costs of housing, especially the former where only 50 percent of residents own their homes. Affordable properties have all benefitted from Dubai’s recovering economy. Investors in these areas can reasonably expect rental returns of at least 7 percent per annum on top of annual capital appreciation. Given the relatively low cost of entry, even with the overall economic slowdown predicted to continue well into the coming year, buyers in growth areas such as Dubai land will see greater financial rewards for their astuteness and patience in due course.

There is definitely a shortage of affordable housing in Dubai. The number of developments that will be supplying housing affordable to the middle and lower income segments is definitely on the increase, more so in the run up to the 2020 World Expo. Historically, the established developments that were most associated with filling the affordable housing gap were international City, Discovery Gardens and, to a lesser extent, MotorCity. But there have been more recent additions that have provided realistic alternatives to these older developments, and several more to come.

Still, as both buyers and sellers are sticking to their negotiating positions with more determination and a greater propensity to walk away from the negotiating table if not satisfied, the real estate cycle will continue on its course. Prices may continue to soften, but what is more important is that the market does not go down on a steep fall, and keeps to its current sustainable path.

Why it is a good time to buy property in Dubai


The market has been cooling for around a year now,

but is expected to pick up again in 2016

I receive so many questions regarding the current state of the market and whether now would be a good time to buy. My answer is invariably yes, especially as the market has become attractive with opportunities available and advantages to be gained from purchasing now.

The market has been cooling for around a year now, but is expected to pick up again in 2016 as the next five years are expected to see strong economic growth in Dubai. Picking the exact timing is always difficult but it is better to be early rather than late and starting early will be a prime determinant of your success.

I recommend you start your property search immediately as a property investment requires the same approach and set of considerations regardless of the state of the market and proper due diligence can take time. You are embarking on a major purchase which has the potential to affect your life in either an extremely positive or negative way. So you need to make a timely decision, not a hasty one.

Be critical in determining what you can afford. If you have-the cash, I suggest you pay for your new purchase outright. However, don’t be afraid to take out a mortgage… just be sure you fully understand what mortgage ‘repayments are going to do to lifestyle and whether you are prepared to make some sacrifices to own your own property. Make sure that you consider the many and varied easy payment plans that are currently on offer as many of these plans will save you considerable amounts of money.

Think carefully about location, surrounding infrastructure, construction quality and developer reputation and building amenities. Properties which are close to the beach, with a sea view, a golf course view or part of an iconic development such as Downtown usually provide good returns. If you have close access to the Metro, even better.

When buying an apartment, you also need to consider the efficacy of the owners’ association, costs associated with service charges and the quality of maintenance services as these will impact the long-term value of your investment. Finally, be purposeful, persistent, patient and pragmatic in your approach and you are well on the way to making a sound decision.

Impact of Expo 2020 bid win for Dubai

It’s hard to imagine the scale of Expo 2020 and therefore easy to underestimate its impact. It is the third largest event in the world with only the Olympics and the Soccer World Cup being larger however, while the Olympics and World Cup are conducted over a relatively short period of time, the Expo will be conducted over 6 months.

It is estimated that over 270,000 jobs will be created in Dubai with 90% of them in the period 2018 to 2021. The majority of these jobs are expected to be created in the tourism and hospitality sector while 80,000 jobs are expected to be created in the construction industry, the majority of which will be required to build the Expo site itself. Located in Jebel Ali, the Expo site will encompass 438 hectares and will consist almost entirely of hospitality and tourism amenities with at least 180 exhibition pavilions to cater for the 25 million visitors who 20% during the 6 months of the Expo.

The total costs are estimated at $8.8 billion with $7 billion required to develop the city-wide infrastructure, the Expo Area and its surrounding site. The benefits to the UAE economy from infrastructural investment, job growth, and massive increase in tourist revenue are enormous and obvious. Economies grow on the back of investment and investments of this scale are rare as are the resulting benefits in terms attracting more tourist dollars and further embellishing the brand Dubai. For Real Estate, hosting the World Cup is likely to create a boom in the industry. The last city to host a World Expo was Shanghai in 2010. Despite being held during the worst global recession in history, property values grew in excess of 60% in the 12 months before the event was held. While Dubai may not achieve such stellar value growth, the predictable surge in demand for accommodation of all types, from labor camps to apartments to executive Villas, for the additional 270,000 or so new job holders is sure to have a significant effect on values.

In addition, demand for office and commercial space is also likely to increase as existing businesses expand and new business entities set up operations to support the conduct of the event or service the bevy of new business operators or the millions of additional visitors. There is no doubt that the Expo will help re-balance supply and demand in this area. Retail space is likely to be at a premium as visitors will not confine their spending to the Expo site alone. In addition, 25 million visitors require a place to stay and, with Dubai’s hotel industry already enjoying consistently high occupancy rates, more hotels need to be built and serviced. Many of these are already planned as part of Mohammed Bin Rashid city.

«هاربور» توقعت زيادة بطيئة في «وسط مدينة دبي» و«مرسى دبي

5٪ انخفاضاً في الإيجارات خلال الربع الأخير من 2010

المصدر: سامح عوض الله – جريدة الامارات اليوم

التاريخ: 05 يناير 2011

أفاد تقرير لشركة «هاربور» العقارية، بأن «الإيجارات السكنية في دبي استمرت في انخفاض تدريجي خلال الربع الأخير من عام 2010 بنسبة بلغت  5% مقارنة بالربع الثالث من العام نفسه.

وتوقع أن تشهد عوائد الإيجارات السكنية ارتفاعاً طفيفاً نهاية العام المقبل، مع استقرار الأسعار في السوق، بسبب انخفاض رسوم الخدمات، موضحاً أن زيادة العرض من الوحدات السكنية، هي العامل الرئيس الذي يحدد نسبة ووتيرة الانخفاض في الأسعار خلال العام المقبل.

وتشير إحصاءات الشركة إلى أن متوسط إيجار «الأستوديو» يبلغ حالياً 38 ألف درهم، فيما يبلغ متوسط إيجار شقة مكونة من غرفة نوم وصالة 67 ألف درهم، وشقة مكونة من غرفتي نوم 85 ألف درهم، وشقة مكونة من أربع غرف نوم 119 ألف درهم.

وتفصيلاً، أفاد تقرير شركة هاربور بأن «العديد من المستثمرين من فئة الأفراد والوسطاء العقاريين، خفضوا أسعارهم تماشياً مع المستويات الجديدة، وجذب مستأجرين لتأمين أي قدر ممكن من الإيرادات»، لافتاً إلى تقديم مٌلاك عروضاً خاصة لترغيب المستأجرين الحاليين في تجديد عقود إيجارهم، تتضمن خفضاً في الإيجار، أو توفير خطة دفع ميسرة تمتد حتى 12 دفعة، وخدمات صيانة مجاناً، وغيرها.

وتوقع أن تواصل إيجارات الشقق في مناطق مثل «ديسكفري غاردنز»، و«المدينة العالمية» تراجعها خلال الفترة المقبلة من العام الجاري، بسبب اكتمال مشروعات جديدة عدة تلائم المستأجرين من فئة الدخل المتوسط، مشيراً إلى أن ذلك سيحفز مستأجرين عديدين على الانتقال إلى تلك المشرعات، للاستفادة من أسعارها المنخفضة ومرافق خدماتها الحديثة.

وأوضح أن من أبرز المشروعات التي ستسلم خلال الربع الأول من عام ،2011 مشروع «غروب» في منطقة مردف، الذي طورته شركة دبي للعقارات، ومشروع «سكاي كورتس» في منطقة «دبي لاند» والذي يتكون من 2836 شقة. كما توقع أن تشهد مناطق مثل «وسط مدينة دبي»، و«مرسى دبي»، و«روعة الإمارات» نمواً بطيئاً، لكنها ستشهد زيادة بطيئة وثابتة في الأسعار بحلول نهاية العام الجاري، في حين ستشهد الوحدات السكنية في مناطق مثل: «أبراج بحيرة جميرا»، و«الخليج التجاري»، و«ذا فيلا»، و«فيكتوري هايتس» في مدينة دبي الرياضية، تحسناً مرهوناً بسرعة معالجة قضايا البنية التحتية، والمرافق الحيوية في تلك المناطق. وقال المدير التنفيذي لشركة هاربور العقارية، مهند الوادية، إن «رسوم الخدمات المرتفعة لا تزال عاملاً سلبياً يحرق نسباً عالية من قيمة رأس المال، وعوائد الإيجار السنوية للمُلاك»، متوقعاً أن تنخفض معدلات تلك الرسوم في عام ،2011 بسبب مبادرة مؤسسة التنظيم العقاري في دبي (ريرا) بتفعيل قانون الملكية المشتركة خلال نهاية النصف الأول من عام .2010

وأضاف أنه «تم أخيراً الكشف عن رسوم الخدمات في مشروع (سكاي كورتس) في (دبي لاند)، والتي تبلغ 7.9 دراهم لكل قدم مربعة سنوياً، وهي أدنى نسبة مقارنة بأي برج سكني آخر في دبي»، مفصلاً أن مالك شقة مساحتها 1000 قدم مربعة في المشروع سيدفع 7900 درهم في السنة، أو 1975 درهماً في كل ربع رسوم خدمات. وقال إن هذا العامل سيزيد عوائد الإيجار لملاك الشقق في مشروع سكاي كورتس..

لمشاهدة متوسط أسعار الإيجارات في إمارة دبي يرجى الضغط على هذا الرابط: http://media.emaratalyoum.com/images/polopoly-inline-images/2011/01/AR14-050111-111.jpg

توافره يعالج أهم العوائق في سوق التمويل ال

‏‏‏توافره يعالج أهم العوائق في سوق التمويل العقاري ويعزز أداءها
خبراء: تأمين تعثر الديون العقارية شبه معدوم في الإمارات‏
إطلاق برامج للتأمين على القروض العقارية ولو جزئياً يعزز من أداء السوق العقارية. الإمارات اليوم
‏‏أكد خبراء في مجال التأمين، أن منتجات التأمين ضد تعثر سداد القروض العقارية شبه معدومة في الدولة، نظراً لعدم وجود استعداد من قبل شركات التأمين لتغطية مسائل التعثر، خصوصاً تأمين الديون العقارية، إضافة إلى أن وثائق هذا النوع من التأمين عادة ما تُسعّر بقيم مرتفعة، ما يجعل من غير الممكن أن تكون في متناول المقترض.
وأضافوا لـ«الإمارات اليوم» أن هذا النوع من التأمين يحمي البنوك من تعثر المقترضين إلى أن يتم تحصيل الدفعات المتأخرة، أو التنفيذ على الضمانات الموضوعة للقرض، مشيرين إلى أن التأمين ضد التعثر في سداد القروض العقارية مربح جداً لشركات التأمين في أسواق أوروبا وأميركا.
وأكدوا أن شركات التأمين لا تشارك البنوك في تقييم الموقف المالي للعميل، وبالتالي فإن البنك يتحمل وحده مخاطرة عدم سداد العميل لأقساط القرض العقاري.
من جانبهم، قال مختصون في قطاع العقارات، إن إطلاق شركات تأمين، برامج تأمين على القروض العقارية، ولو جزئياً، يعزز من أداء السوق العقارية، مع تقاسم تحمل مخاطر عدم السداد بين البنوك وشركات التأمين، مؤكدين أن توافر هذا المنتج سيعالج واحداً من أهم العوائق المهمة في سوق التمويل العقاري�).
وأضافوا أن توفير منتجات تأمين على مخاطر عدم سداد القروض العقارية، سيشكل حافزاً أمام البنوك، لضخ سيولة للمشترين للحصول على وحدات سكنية من دون مخاوف من التعثر.
تغطية حالات التعثر
وتفصيلاً، قال مساعد مدير شركة «تكافل ري» لإعادة التأمين، تامر ساهر، إن «شركات التأمين في الإمارات لم تشارك مسبقاً في تغطية حالات عدم سداد القروض، لأنها لا تشارك في تحليل وتقييم الموقف المالي للعميل، وقدرته على السداد، الذي يتم في إدارة الائتمان في البنك المعني، لكنها تغطي حالات الوفاة والعجز»، لافتاً إلى أن «بعض الشركات لاتزال تغطي حالات فقدان الوظيفة في نطاق ضيق، نظراً لزيادة مخاطر وقوع هذه الحالات في ظل ظروف الأزمة الاقتصادية».
من جانبه، قال مدير عام شركة الوثبة الوطنية للتأمين، بسام جلميران، إن «منتجات التأمين ضد تعثر سداد القروض العقارية شبه معدومة، لعدم وجود استعداد من قبل شركة التأمين لتغطية مسائل التعثر، خصوصاً في موضوع تأمين الديون، إضافة إلى أن هذه الوثائق عادة ما تُسعّر بقيم مرتفعة، ما يجعل من غير الممكن أن تكون في متناول المقترض».
وأضاف أن «البنوك تمول العملاء على مسؤوليتها، وفي حال تعثرهم، فإنها تكتفي بالاستحواذ على الأصل العقاري لبيعه»، مشيراً إلى أن «هذه الوثائق متوافرة في أسواق خارجية، لكن انحسارها أخيراً يعكس الأزمة المالية العالمية التي كانت نابعة أصلاً من التوسع في هذا النوع من الإقراض».
وقال إن «هناك شركات تأمين كبرى تعرضت لخطر الانهيار لأن مخاطر هذا النوع من التأمينات عادة ما تكون عالية، حيث تعتمد درجة الخطورة على الوضع الاقتصادي عموماً، ومدى انتعاشه».

ولفت إلى «انخفاض نسبة مساهمة البنوك في القروض العقارية من 85٪ إلى 70٪، فيما يُموّل المقترض النسبة المتبقية، نظراً لارتفاع المخاطر في القروض العقارية».
وأوضح أن «هناك نوعاً شبيهاً بتأمين التعثر في سداد القروض العقارية، تسمى بـ(بوليصة تأمين على الحياة)، توفرها شركات تأمين بالتعاون مع بنوك في حالة الوفاة أو العجز الدائم، حسب عُمر الشخص ووضعه الصحي، وبموجب هذه البوليصة، يتم دفع المبلغ المستحق أو المتبقي من قبل شركة التأمين للبنك».
وثائق غير إلزامية
إلى ذلك، أكد مدير عام شركة دبي للتأمين، عبداللطيف أبوقورة، أنه «وفي ظل التوسع الكبير في الإقراض العقاري، لاحظت بنوك أن حالات التخلف عن السداد، أو التعثر من قبل مقترضين، عادة ما تكون بنسب قليلة جداً، لذلك فإنها لم تجد حاجة كبيرة لطلب التغطية التأمينية عليها، كي لا تضيف أعباء إضافية على المقترضين وعملائها».
وأوضح أن «البنوك أدركت في الوقت ذاته، حجم الخطر في حال وفاة المقترض، ولهذا طلبت وثائق تأمينية تغطي مخاطر السداد في حال الوفاة»، لافتاً إلى أن «شركات التأمين لا تمتلك خبرة فنية كافية وقدرات تؤهلها لتسويق هذه المنتجات في السوق».
وأضاف أن «معظم وثائق التأمين على الديون والقروض ليست إلزامية، ولا تطلبها البنوك، نظراً لأنها لم تتعرض لحالات عدم سداد أو تعثر كثيرة».
تأمين مربح جداً
بدوره، قال خبير التأمين، مدير عام شركة (وايت لو) لتقدير الخسائر والأضرار، يوسف جبور، إن «هذا النوع من التأمينات في السوق الإماراتية قليلة، إلا في حالات استثنائية جداً يجلب وثائقها بعض وسطاء التأمين من الخارج»، لافتاً إلى أن «نسبة هذه الأقساط من إجمالي أقساط التأمين في الدولة تقل عن 1٪».
وأوضح أن «البنوك ترى في العقار ضمانة، يمكن بيعه في حال التعثر، لذلك لا تطلب من المقترضين هذه الوثائق، إضافة إلى أن إمكانات شركات التأمين في المنطقة محدودة جداً، ولا تتوافر لديها خبرات وكفاءات قادرة على إدارة هذا النوع من التأمينات».
وبيّن أن «التأمين ضد التعثر في سداد القروض العقارية، مربح جداً لشركات التأمين في أسواق أوروبا وأميركا»، مستبعداً حاجة السوق الإماراتية لهذا النوع من التأمينات.
وأضاف أن «قيمة قسط التأمين على قرض عقاري بمليون دولار، يصل إلى نحو (1.5 أو2٪)، وفي حالات نادرة إلى 3٪ من القيمة الإجمالية للقرض في الأسواق الأوروبية والأميركية، حيث انه كلما ازدادت قيمة القرض، قلت النسبة التي تُحصلها شركات التأمين من المقترض».
تعزيز للسوق العقارية
وفي السياق ذاته، قال المدير العام في شركة هاربور العقارية، مهند الوادية، إن «إطلاق شركات التأمين، برامج للتأمين على القروض العقارية ولو جزئياً، يعزز من�أداء السوق العقارية، مع تقليل تحمل مخاطر عدم السداد بين البنوك وشركات التأمين».
وأكد أن «إتاحة منتجات التأمين على مخاطر عدم السداد للقروض العقارية، سيشكل حافزاً أمام البنوك، لضخ السيولة أمام المشترين، للحصول على وحدات سكنية من دون مخاوف من عدم السداد»، لافتاً إلى أنه «يمكن لشركات التأمين أن تضع بعض الضوابط بالتعاون مع البنوك، لضمان أفضل تطبيق يجعل من هذا النوع من التأمين محفزاً للقطاع العقاري الذي ت�*زايد فيه الفرص، مع تراجع الأسعار بشكل ملحوظ خلال السنوات الماضية».
وأوضح أن «فقدان السيولة بسبب الأزمة المالية، أدى إلى معاناة نحو ثلثي بلاد العالم من الركود الاقتصادي»، مشيراً إلى أنه «وبحسب تقديرات الأمم المتحدة، فإن أكثر من 90 مليون شخص، يقعون في خانة الفقراء نتيجة للأزمة، كما تراجعت التجارة العالمية بنسبة 10٪ للمرة الأولى منذ ثلاثة عقود».
وتابع «تبلغ قيمة ديون البنوك في العالم نحو 4.6 تريليونات دولار، فيما يتطلب العودة إلى النمو زيادة معدلات الادخار»، لافتاً إلى أن «عدم وفاء المصارف بالتزاماتها في الوقت المناسب، يمكن أن يتحول إلى صدمة كبيرة، ويؤثر في وضع البنك وسيولته محلياً وخارجياً، ولذلك يجب أن تكون المصارف مستعدة للتعامل مع الصدمات غير المتوقعة من السيولة».
وأضاف أنه «يمكن للبنوك تأمين أموالها عن طريق شركات التأمين، التي بدورها تعيد التأمين لدى شركات إعادة التأمين»، موضحاً أنه «إذا واجه البنك مستثمراً متعثراً غير قادر على سداد التزاماته لأسباب خارجة عن إرادته، مثل الإفلاس، فإنه يلجأ إلى المفاوضات أو التسوية لحل الوضع، أو إلى بيع أو رهن الاستثمار».
وقال إن «البنك يقوم بجميع المحاولات لاسترداد أمواله لمدة ستة أشهر، وهو العرف المتبع، ومن ثم تتدخل شركات التأمين، لتقوم بعمليات تحقيق خاصة بها قبل تغطية المبلغ المفقود».
مخاطر طبيعية
من جانبه قال المدير الإقليمي في شركة «جونز لانغ لاسال» للاستشارات العقارية، فادي موصلي، إن «شركات التأمين المحلية تؤمن على القروض العقارية ضد مخاطر الوفاة، أو الحريق، أو المخاطر الطبيعية الأخرى، التي تتعرض للعقار، لكنها لا تؤمن ضد مخاطر عدم السداد»، مشيراً إلى أن «بعض الجهات الحكومية تنفذ هذا المنتج التأميني، عند توزيعها للوحدات السكنية للمواطنين، لكن ذلك غير ممتد للعقارات الخاصة، ولا تقوم البنوك بهذا الإجراء».
وأضاف أن «البنك هو الجهة التي تختص بالنظر في القوة الائتمانية للعميل، وتحدد ما إذا كانت ستمنحه التمويل العقاري أم لا، وبالتالي فإن البنك يتحمل وحده مخاطرة عدم سداد العميل لأقساط القرض».
وأوضح أن «شركات التأمين تعمل في التأمين على المخاطر العشوائية، لكن عدم سداد القرض العقاري يعد مخاطرة غير عشوائية لا تغطيها شركة التأمين»، مبيناً أن «توافر هذا المنتج سيعالج واحداً من أهم العوائق المهمة في سوق التمويل العقاري، لكنه يعتبر أحد العوامل غير الأساسية لتحريك السوق العقارية في الدولة».

آثار قريبة وبعيدة المدى تتحقق عند التطبيق

آثار قريبة وبعيدة المدى تتحقق عند التطبيق
السوق العقاري يتفاعل إيجاباً مع خطوة “إعادة الهيكلة”

أوضحت مصادر أن السوق العقاري والعاملين فيه قد تفاعلوا بايجابية مع مقترح كل من “دبي العالمية” و”نخيل” لاعادة جدولة ديونهما، الأمر الذي سينعكس على مستقبل القطاع بشكل مباشر وغير مباشر في الوقت ذاته على المديين القصر والبعيد .

وأضافت المصادر أن الآثار الحقيقية على القطاع ستتبلور مع اعلان الجهات الدائنة قبولها للمقترح وما سيتبعه من مراحل التنفيذ، مشيرة الى أن النتائج الأولية للمقترح تنحصر في محيط دائرة عودة الثقة والتفاؤل للجهات العاملة في مختلف المجالات العقارية، أما فيما يختص بمنحنى الأسعار فترى المصادر أنه لن يتفاعل بنفس الوتيرة مع هذه التطورات، حيث إن المسألة هي عامل زمني يرتبط ارتباطا وثيقا بمعادلة العرض والطلب، وهذا ينطبق في الوقت ذاته على مشاريع “نخيل” أيضا .

وأوضح فادي موصلي، المدير الاقليمي في “جونز لانغ لاسال”، أن الاعلان عن تفاصيل الخطة الشاملة لاعادة الهيكلة التي تشمل كل من “دبي العالمية” و”نخيل” كل على حدة، من شأنها أن تعطي دفعة قوية عنوانها الثقة والتفاؤل لجميع العاملين في السوق العقاري في الامارة من جهة وحركة البيع والشراء من جهة أخرى على المدى البعيد وليس القصير .

وأضاف موصلي أن تطبيق هذا المقترح، الذي تقدمت به كلتا الشركتين، سيدفع بصورة أقوى في اطار اكتساب دبي المزيد من المصداقية والشفافية التي كانت قد تأثرت في الفترة السابقة، وليبدأ العاملون في السوق باختلاف قطاعاتهم باعادة ترتيب أوراقهم وخططهم المستقبلية بناء عليه .

وأفاد موصلي أنه من الواضح أن السوق والمستثمرين قد استقبلوا هذا الخبر بايجابية، الأمر الذي انعكس بنفس الاطار على أداء الأسواق المالية، وأسعار الفائدة الائتمانية على ديون دبي، الا أننا نرى أن هذا التأثير يكمن على المدى القصير، أما البعيد فيرتبط بالمزيد من الوضوح والشفافية بشأن هذا المقترح الذي جاء أفضل من المتوقع، وننتظر رد الجهات المقابلة من الدائنين لقبوله .

وعلى صعيد نتائج هذا المقترح على السوق العقاري، يقول موصلي أنه من المرجح أنه يحتاج لكفايته من الوقت لحين أن يلمس نوعا من التحسن، في الوقت الذي بدأ المستثمرون التعامل بفعالية بعد طول انتظار لحل المشكلة الأولى في السوق المحلي بدبي .

أما مشاريع نخيل العقارية التي تعد ذات الصلة الأولى بهذا المقترح، فنجد أنها شأنها شأن جميع المشاريع في الامارة والتي تخضع لقاعدة العرض والطلب، فلن تتحسن أسعارها أكثر من غيرها، الا أن المعنى العام يصب في الشعور الايجابي للمقترح ككل من شتى القطاعات .

من جهته أوضح عمر عايش، رئيس مجلس ادارة “نوبلز” القابضة، أن اعلان كل من دبي العالمية ونخيل عن خطتهما الشاملة لاعادة هيكلة الديون ستؤثر بشكل ايجابي وبطريقة مباشرة في بعض القطاعات وغير مباشرة على قطاعات أخرى، والتي ستصب في النهاية في تحريك العجلة الاقتصادية من دائرة التباطؤ الى التسارع .

وأضاف عايش أن المقترح الذي تقدمت به الشركتان كل على حدة سيخلق دفعة معنوية على صعيد هامش الثقة لكافة العاملين في السوق المحلي بدبي من خلال ضخ مياه الحيوية والنشاط على مستوى شتى القطاعات الاقتصادية .

وأشار رئيس مجلس ادارة “نوبلز”، الى أن دبي كانت ولا تزال تتبوأ مركزا متقدما كبيئة استثمارية جاذبة لرؤوس الأموال وكبرى الشركات، وها هي تفاجئنا بقرارها الصريح الذي يعد من أفضل الأخبار التي نسمعها على الرغم من الظروف الحالية التي تشهدها كافة الأسواق العالمية في ظل الأزمة المالية العالمية، بأن يأخذ كل ذي حق حقه وهذا يزيدنا ايمانا بقدرة الامارة على تجاوز أسوأ التحديات والمصاعب .

أما مهند الوادية، المدير الاداري في شركة هاربور للوساطة العقارية فقال من جانبه: “ان هذا الالتزام الجديد التي قدمته “دبي العالمية” يعد خطوة ايجابية نحو التزامات عديدة في المستقبل، فهو بالتأكيد يعزز الثقة بالبيئة الاقتصادية والاستثمارية في مدينة دبي وفي قطاع العقارات بشكل خاص . فدفع المبالغ المستحقة سيخلق أثرا ايجابيا مضاعفا على جميع أصحاب المصالح وسيساعد على تخفيف حدة التوتر القائم” .

وأضاف الوادية أن هذا الخبر الجيد يؤكد مرة أخرى أن دبي تتمتع ببنية تحتية اقتصادية متينة وقادرة على الصمود في وجه العاصفة الاقتصادية بثقة ومرونة، ووفرت من خلاله شعورا بالتفاؤل تفاعلت معه الأوساط العقارية لما له من الأثر الكبير والواضح على جاذبية الامارة على الصعيد العالمي .

عبدالمجيد اسماعيل الفهيم، رئيس مجلس ادارة دبي بيرل “لؤلؤة دبي”، قال من جهته عبر اتصال هاتفي خلال جولة ترويجية لمشروع لؤلؤة دبي في الصين وبعض دول آسيا، انه لا شك أن قيام حكومة دبي بتقديم دعم مالي لاعادة هيكلة ديون مجموعة دبي العالمية ونخيل، سيكون له أثره المباشر على ازدياد معدلات الثقة في الأداء الاقتصادي لدبي على المدى المتوسط والبعيد، ويضفي حالة من الاستقرار والاطمئنان على أداء كافة القطاعات الاقتصادية ليس على مستوى امارة دبي فحسب وانما على مستوى دولة الامارات بشكل عام .

وأضاف بعد لقاء مع شركاء أعمال في شنغهاي: “لقد كان لهذا القرار أثره الفوري على أداء أسواق المال في الدولة والتي استقبلته بفرحة عارمة ترجمها ارتفاع مؤشرات التدوال بشكل سريع، وأقفلت الأسواق على ارتفاع طالما اشتاقت اليه الأسواق، وبعث السرور والسكينة في نفوس جميع المتعاملين . كما أن هذا القرار ستكون له انعكاساته المباشرة على القطاع العقاري الذي هو بحاجة ماسة لمثل هذه المحفزات” .

وقال ان هذه الخطوة تمثل رسالة واضحة الى كافة أسواق العالم أن دبي قادرة على الايفاء بالتزاماتها برغم أي ظروف، وأن نهجها الاقتصادي التطويري ماض الى ما لا نهاية، وأن على الجميع أن يتعامل معها على هذا الأساس، وألا يراوده أي شك في أن المستقبل المشرق مازال فاتحاً ذراعيه لدولة الامارات لتحقق المزيد من الانجازات على سلم التطور الحضاري طالما أن قيادتها قادرون على توجيه الخطى الى الأمام بصدق ويقين وعزيمة .

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.

Sales show improvement in key realty projects

Downtown Dubai has the highest number of listings by most realty agents.

Downtown Dubai, Emirates Living, Dubai Marina and Dubailand top the listing chart for sales and leasing queries, according to agents.

“Downtown Dubai has the highest number of listings by most realty agents in Dubai. The second popular area is Dubai Marina with a large focus on Jumeirah Beach Residence (JBR),” said Mohanad Al Wadiya, Managing Director, Harbor Real Estate.

For Harbor Real Estate, the number of listings in these areas has increased by 20 per cent to 25 per cent in 2010. “Business Bay with a larger focus on the recently launched Executive Towers comes third, according to us,” he added.

Al Wadiya said Downtown Dubai and Dubai Marina have always been ranked high and are one of the most sought-after areas in Dubai.

“The location of both these areas is good, which is the most important decision investors take while investing. Further, the current price points have also made these two districts more attractive as they have became more affordable.

“Another key reason for this increased attention and demand is the fact that both these areas include popular attractions such as The Dubai Mall, The Marina Mall, The JBR walk, The Marina walk, the free beach in JBR and Burj Khalifa.”

Better Homes’ Liz O’Connor, Director – Residential Sales and Leasing, said: “Our top-selling districts between November 2009 and February 2010 have been The Emirates Living District, Marina District, Downtown District and the Dubailand districts.”

“For us, between November 2009 and February 2010, we received the most listings for the Emirates Living District, such as The Greens, Emirates Living, Jumeirah Village, Jumeirah Lake Tower (JLT), followed by Dubai Marina, Dubailand and Downtown Dubai districts,” said O’Connor.

Vineet Kumar, Head of Leasing and Sales – Dubai, Asteco Property Management, said: “Majority of listings we received in the past two months are for recently handed over projects such as the Loft apartments in Downtown Dubai and the Executive Towers in Business Bay.

“Other areas, which have received good level of listings are Dubai Marina and JLT, villas in Emirates Living such as Springs and Palm Jumeirah.

“Also, Sheikh Zayed Road continues to draw interest from tenants looking for quality residential buildings.

“Listings are always linked to the status of handed-over projects. As more projects have been handed over, or are nearing completion, we have seen a growth in the number of listings in these select locations,” he added.


Real estate agents said the main reason for these areas recording the highest listings has been due to recent handover within these areas and the fact that these communities offer a complete lifestyle with lesser construction happening in these areas.

Al Wadiya said: “The overall market condition in Dubai is stabilising and the appetite of all the stakeholders in the property market is improving as there is a general consensus that the prices have bottomed out and if there is any further decline, it will be very marginal and will not affect areas or developments that are completed.”

O’Connor said: “For residential real estate, location plays a big role in the demand for these areas. People want to live in popular areas that provide them with a good lifestyle and one which are easily accessible.

“Our customers are increasingly looking for The Emirates Living district, followed by Dubai Marina, Dubailand and Downtown districts,” she added.

Kumar said: “Buyers will show interest in master-plans that are developed and offer convenience of living and at rates which are attractive. Further those buyers who receive handover of their property and do not wish to occupy them for self-use will often offer these for sale or leasing.”

Meanwhile, listings for properties (sales and rentals) in JLT and Discovery Gardens has dropped due to buyers looking at other value for money investments in other parts of Dubai.

Al Wadiya said: “During the second half of 2009, we were seeing more listings for JLT and Discovery Gardens. The listings have been reduced in these areas mainly because of the shift of focus to the more popular areas of Dubai such as Downtown Dubai and Dubai Marina.

“Prices are more affordable in these areas, hence buyers especially end-users and investors are shifting to these areas. In addition, Downtown Dubai and Dubai Marina offer a more established community lifestyle with less construction going on in the area,” he added.

He said the number of transactions in these areas could have fallen during 2010. According to Better Homes, no significant drop in listings has been noted in any particular areas.

“There are always shortages of a particular type of properties within a certain area for the right price which leads to a shortage in particular communities. Certain communities in Dubai, particularly those with villas, do not have many units becoming available as they have end users living in them who are there for the long term.

“The villas in Phase I Green Community are an example,” said O’Connor.

“Further, not having listings in a particular area could mean a number of things, such as a shortage of property within these areas for the right price.

“It could also mean that property owners are leasing rather then selling in these places,” she added.

Harbor Real Estate said the company does not remove any particular area from its listings.

“However, we focus more on the areas that have more demand. Having said that, we continue to provide minimum support to off-plan projects as the demand for these projects is still very low,” said Alwadiya.

Kumar said: “We have identified certain locations and focus on those areas alone. However, we have not removed any areas.

“You may find we do not have a presence in certain areas such as Downtown Jebel Ali and Dubai Waterfront. We will revisit these locations once we believe the market will be interested from a price-point which is agreeable to the sellers.”

Real estate agents said delivery of new properties in Dubai is likely to increase the number of distress sales.

O’Connor said: “Delivery of new properties in Dubai are likely to see a number of ‘distress sales’ coming into the market. In fact this is already happening. In all situations the reasons to sell are unique; however, we generally expect to see distress sales coming from areas where projects are not expected to be completed or cancelled.”

She added that in the case of a property with mortgage attached, the extent to which a seller is willing to sell his property would depend on the mortgage finance, as the final selling price must cover the bank’s finance amount. In the case of cash sales, however, there is no limit to which a seller may sell.

Kumar said: “As more inventory gets delivered there will be sellers who will prefer to exit from the purchase but the value will be linked to quality of project, status of the master community etc.

From the buyers perspective, this is a good time to buy a piece of real estate at realistic value with the aim of holding the property for the mid to long-term.”
He added that the term, “distress sales” should never be used, as selling a property is a seller’s personal decision.

“The reasons for selling the property at the value they deem right is the seller’s choice. We might use the term ‘motivated seller’ but not distress. Quite often such sales are at lower than market price and could translate into a financial loss for the seller. However, market conditions may be only one reason for such sales.”

According to Harbor Real Estate, the term ‘distressed sale’ emerged during the early days of the crisis during the last quarter of 2008 and has soon become a common property jargon.

“Few people really know what it means and how to qualify a property as a genuine distress sale,” said Al Wadiya. “The global credit crunch has hit the property industry hard. Developers find themselves in the position of having built projects which now have no buyers or the people who bought off-plan are now trying to pull out and recoup their deposits,” he said.

He said that distressed properties are properties that are in danger of facing foreclosure proceedings or that have already been scheduled for sale as a result of default on the part of the owner.

“A property is said to be distressed when an owner gets behind on mortgage payments or a direct payment to a developer and the lender or appropriate debt collector begins to start the necessary proceedings to sell the home in order to collect the outstanding debt.

Distressed properties can cover any kind of real estate, from commercial spaces to apartments. It’s a great chance to save, often ranging anywhere from 40 per cent to 60 per cent off their actual market value or buying price, but it’s also a great chance for making a good investment, since purchasing for a discount often means creating a huge margin for future profits,” he said. O’Connor said: “It is important to understand that a ‘distress’ sale is really only where the seller is willing to sell for less than he paid for, particularly if the property is off-plan.

“Some sellers are willing to sell for the original price of the property or less, but many sellers – in particular those with ready properties rather than off-plan – are unable to emotionally ‘let go’ for less than they think it should be worth.”

She said that many sellers will describe themselves as ‘distress’ sellers, even though they may expect to receive quite a bit more than they paid for the property.

“However, in the case of investors off-loading their off-plan properties, those that are prepared to incur a loss will generally accept up to 40 per cent less than the original price in order to just get some of their investment back,” she said.

“Owners looking to sell are increasingly twitchy about moving their properties off the market and banks have large numbers of repossessed property stock effectively sitting on their balance sheets when what they really need is liquid cash sitting in the coffers. All of this adds up to something that buyers love more than almost anything else – the opportunity for a bargain,” said O’Connor.

O’Connor said the situation occurs mainly with cash buyers. “This is a worse situation for a finance buyer, because he has to pay the bank and pay the difference directly from his pocket; in many of the finance distress sales, the client will walk away.”

“It is important to say that using the term ‘distress sale’ without the permission of the owner is considered a breach of the agents code of ethics introduced under by-law No 85 of 2006 because agents are supposed to be trusties for the owners and they should not disclose the owner’s financial status under any circumstances,” she said.

The real estate agents said some properties like JLT, Greens, Dubai Marina, Downtown Dubai are providing some good value for money investments for buyers.
“Some of the apartments in JLT are value for money and will prove to be a good investment when the infrastructure of the community is complete and the metro is fully operational. However, investors need to choose carefully. Those towers on Sheikh Zayed Road side of the community are proving to have the most popular locations,” said Al Wadiya.

“Greens is due to shortly handover and many investors are anxious to off-load their property at original price and in some cases for less,” said Al Wadiya.

More buyers get lawyers to read the fine print

Property owners are concerned over growing disputes and investment security.

The number of property dispute cases filed in Q1 2009 increased by 55 per cent compared to Q4 2008. (EB FILE)

Increasing real estate disputes and concerns over security of a property investment are prompting buyers to seek legal advice prior to making a transaction, according to agents.

“Clients have serious concerns over the security of their real estate investments. Further, increase in number of real estate disputes is a result of many prospective buyers seeking legal advice prior to making a transaction,” said Mohanad Alwadiya, Managing Director, Harbor Real Estate.

“This was not the case in previous years which also contributed greatly to the problems that clients were facing as proper due diligence was not conducted prior to the sale and purchase of property,” he said.

Speaking to Emirates Business in a round table, Shilpa Guruswamy, Head of Legal and Sales Coordination, Asteco Property Management; Charles Neil, CEO, Landmark Advisory & Landmark Properties and Liz O’Connor, Director – Residential Sales & Leasing, Better Homes, said they were ensuring all correct steps were followed within their companies and ensuring all documentations were in place before a transaction is completed.

Do you have a law firm that advises you on the authenticity of your real estate transactions?

Guruswamy: Yes, we have a legal department, which oversees our transaction details and is also responsible for the compliance and risk mitigation process.

Neil: We have law firms to draw up all our documentation which protects the rights of our clients. Our accounts are audited by one of the four big auditors in order to ensure there is a clear distinction between our funds and our clients’ funds.

Real estate agencies, however, should be careful using companies claiming to be trust companies as they are not regulated, and if they have doubts they should use a reputed company of lawyers instead.

O’Connor: Yes, we do have a lawyer on board who manages our legal procedures and contractual obligations on transactions. Through our in-house lawyer as well as our managers, we ensure that all correct steps are followed and documentation is in place before a transaction is completed.

Alwadiya: In 2009, we joined forces with Prestige Legal Consultants, an international law company, to provide counselling and representation to all our clients in all legal matters concerning real estate in Dubai.

This partnership was started to keep in line with our vision to evolve our services from traditional real estate brokerage of merely bringing buyers and sellers together to world-class end-to-end real estate services. The holistic real estate legal services will complement our diverse line of services and govern all the activities and transactions of our clients.

The combined real estate experience of our firms enable us to provide clear candid counsel and guidance to our clients at all times to ensure that their rights are always protected.

Is this a new trend due to the downturn in the real estate sector?

Guruswamy: Real estate transactions, whether sales, lease, or appointment of sub-agents, are all essentially structured through legal contracts. Therefore, all these underlying documents need to be verified to ensure compliance to statutes and contract laws.

It is not a new trend but as the market matures there is greater emphasis on regulation and transparency. Therefore, there is increased need to have people with necessary legal background and expertise to scrutinise or draft documents. It is in no way related to the downturn because we had a legal department in place and operational long before the onset of the downturn.

Neil: We feel there should be laws allowing the setting up of trust accounts, but in our case customers trust us as we have strong finances and strong shareholders.

O’Connor: No, for us this is not as a result of the downturn in the real estate sector. We created this position a number of years ago due to volume of transactions and to oversee our international operations.

Alwadiya: Real estate-related enquiries have increased since the 2008 financial downturn. Many of the clients have serious concerns about the security of their real estate investments.

It was estimated that the number of cases filed in the first quarter of 2009 increased by 55 per cent compared to the fourth quarter of 2008. This drastic increase in the number of real estate disputes is a result of many reasons ranging from investors not fulfilling their obligations, sale and purchase agreements containing provisions that contradict the law about developers not delivering projects on time, and many more.

Prospective buyers are also seeking legal advice prior to making a transaction. This was not the case in previous years and also contributed greatly to the problems that clients were facing as proper due diligence was not conducted prior to the sale and purchase of property.

Most of the current legal enquiries that our legal division receives are usually concerned with the real estate regulations and legislations.

The profound perception of the industry and the daily interface with real estate clientele have resulted in the espousal of a fresh innovative legal counselling scheme. According to a recent study conducted by Harbor research division, majority of people perceive legal counseling as an exhorbitant service which leaves them with no alternative other than staying unaided and frustrated.

For that reason, the legal solution introduced by Harbor & Prestige is viewed as a results-driven method. Customers who seek legal counselling will incur minimal fees and no extra charges will be required in case of not winning the case.

Real Estate Regulatory Agency (Rera) recently proposed a free legal advice service for buyers and sellers, an initiative that we applaud. We believe that this innovative policy will assist in boosting the confidence levels in the real estate industry.

Can you specify which particular transactions are scrutinised by your analysts and lawyers?

Guruswamy: The legal department is involved in overseeing all transactions not limited to primary sales, secondary sales, leases, registration at the Land Department verification of power of attorneys etc. Should a party to the transaction be a corporate body, incorporation documents of companies need also to be verified.

Neil: We do use lawyers for more complicated transactions and are working with one firm to do conveyance transactions.

O’Connor: We have standardised processes and procedures that govern every transaction. Our in-house legal advisor oversees all the legalities of these processes to ensure that all parties, wherever possible are secure.

Alwadiya: The legal services introduction is vital as the real estate market matures through the current economic crisis to become a more structured and regulated market. We obtain legal counselling for all our transactional activities in order to ensure providing our clients with a secured transactional experience. Needless to say, the more complex and high-end the transaction is, the more legal involvement we require.

Do you collect a deposit from a client in order to lock-in your clients?

Guruswamy: We generally do not encourage collection of deposits. However, should there be a delay in completion of transaction, a deposit may be collected by the agent to secure buyer’s interest and lock the seller to a commitment. In this case the agent takes up the role of an escrow agent.

In case of default, deposit maybe forfeited and returned to the aggrieved party. On successful closure of the deal, the deposit is adjusted towards the balance sale price of the transaction.

Neil: We only take deposits as part of a transaction and to secure the rights of the parties involved in a transaction, we don’t take it in to lock in a client. If the deal falls through, then the deposit is returned in the manner agreed upon by the parties at the time of signing the agreement. Sellers can no longer demand deposits and hold on to them.

O’Connor: We have now begun to encourage our customers to hold their deposit with a Rera-approved escrow facility, but in the absence of an escrow we take a deposit from the buyer as security for the seller.

Alwadiya: Accepting deposits from potential buyers or tenants is a common practice in the property market which is usually used as a closing technique or a gesture to test the seriousness of the potential client. More sellers and landlords are starting to ask for deposits as well in order to secure their interest in the transaction, especially when the closing date of the transaction is delayed for justified reasons such as releasing a property mortgage or finalising the transaction contracts or obtaining a date to conduct the transfer at the developer’s office or the Land Department.

We try to avoid retaining any deposits at our end as this is an added liability on us and it can place us in a conflict of interest situation as we usually represent only one part in the transaction. Having said that, we usually recommend that deposits are usually handed by a financial or legal third party entity with neutral position in relation to the parties involved in the transaction.

Do you maintain a separate account to receive agents’ commissions?

Guruswamy: Commission fees are payable to the agent by the parties involved and shall not form a part of the purchase consideration.

Normally, the purchase consideration is exchanged between the buyer and seller and the commission is paid to the agent. Therefore, there is no possibility of both of them being booked into the same account. However, should the agent be involved in collecting the booking deposit, it is booked separately into a designated account, which is distinct from all other operational accounts. Such payments are held on behalf of the buyer and seller and do not form part of the operational funds of the agent.

Neil: No comment.

O’Connor: We have an accounts department and we run a series of profit centres, most of which have commissions as the primary revenue source.

Alwadiya: Our company’s bank account is supervised by an independent certified accounting and auditing firm. Our internal accounting and finance resources follow the processes and guidelines set by this consultant/firm in order to ensure complete compliance with the best financial and accounting standards.

Occupancy levels close to 75% on The Palm

Apartment prices remain flat due to new stock entering the market.

Apartment prices remain flat due to new stock . Rental rates of villas have stabilised and are similar to 2007 levels . (SUPPLIED)
Occupancy levels are running at between 60 and 75 per cent across The Palm Jumeirah’s villas and apartments, according to realtors.
“Occupancy for villas is about 60 per cent while for the Shoreline Apartments, it is currently about 75 per cent,” said Laura Adams, Manager of Residential Sales and Leasing at the head office of Better Homes. “Only about 30 per cent of the people who were living on the Palm moved out because of the economic crisis.”
Mohanad Alwadiya, Managing Director of Harbor Real Estate, said: “According to our estimates, 70 to 75 per cent of the new handovers that happened last year are occupied. We estimate that about 70 to 75 per cent of all the villas and apartments are occupied as well.”

Villa prices on the man-made island have risen by 17 per cent since the middle of 2009, said realtors.

Adams said: “Villa prices appreciated by about Dh300 per sq ft, a 17 per cent increase from the low point in the middle of 2009. Overall sales have still not reached the levels seen in the third and fourth quarters of 2008. Apartment prices remain flat at best – the new stock in the Golden Mile, Tiara Residences, Oceana and Marina Residences is continuing to keep prices down and will do so for some time.”

She said prices for one-beds averaged about Dh1,100 to Dh1,500 per sq ft, and two-beds were about Dh1,000 to Dh1,700 per sq ft. Three-beds averaged about Dh950 to Dh1,500 per sq ft, while four-bed villas were about Dh1,600 per sq ft. Five to six-bedroom villas cost Dh1,900 per sq ft.

“The figures are broad as they include off-plan units in the Golden Mile and Marina Residences. Generally, completed properties such as Shoreline and the recently handed over Golden Mile units with superior views command higher prices.” she added.

Turning to rentals, Adams said a one-bedroom apartment currently costs between Dh100,000 and Dh150,000 per annum.

“Two-bedroom apartments range from Dh130,000 to Dh180,000 per year while three-bedroom apartments range between Dh160,000 and Dh200,000.

Four-bedroom apartments are available from Dh300,000 to Dh450,000 per annum and five-bedroom apartments range from Dh420,000 to Dh600,000.

Six-bedroom apartments are in the region of Dh600,000 to Dh700,000 per annum. For villas, rentals are about Dh280,000 per annum at Canal Cove, Dh350,000 for a garden home and Dh480,000 for a signature villa. In general, villa rates have stabilised and are similar to 2007 rates.”

Alwadiya said the current rental prices for apartments are about Dh90,000 per year for a one-bed, Dh130,000 for a two-bed, Dh160,000 for a three-bed and Dh250,000 for a four-bed.

“The Palm Jumeirah is one of the few projects in Dubai that managed to weather the economic crisis well, though villa prices witnessed a drastic decrease in the first and second quarters of 2009.

“For example, a garden home that was being sold for about Dh11m in 2008 suddenly fell to Dh7m. But in the third quarter of last year, the prices of villas started to pick up again and now the same garden home would not be offered for less than Dh9m.”

According to Better Homes, the Palm has a mix of end-users and investors, with declining rental yields tilting the balance in favour of the former. Adams said: “High maintenance fees are affecting net rental yields and since there are other options available elsewhere in Dubai this could impact interest in The Palm Jumeirah. Nationalities are mixed, but residents are mainly East European or Asian.”

Alwadiya said: “The buyer profile used to be dominated by GCC nationals, Russians and South Asians but now you find many different nationalities.”
He said that maintenance charges on the Palm apartments were in the range of Dh14 to Dh17 per sq ft.

“Charges for villas on the Palm are among the highest at about Dh4 to Dh5 per sq ft,” he said. “In effect, the owner of a two-bedroom apartment of about 1,800 sq ft will need to pay about Dh28,800 annually, assuming the charges do not increase yearly.”

First monorail in the Middle East

The Palm Monorail, which was inaugurated in April 2009, was the first monorail project to be constructed in the Middle East, says Nakheel.
It was developed by a consortium of leading international companies. The track runs between Gateway Station at the trunk of the Palm and Atlantis Aquaventure Station on the crescent.

It will eventually be linked to the Dubai Metro following the introd-uction of the Roads and Transport Authority’s Al Sufouh tramline, with direct links to Dubai International Airport and other key transport hubs.

Home to 12,000 residents

About 2,150 families are living in the Shoreline Apartments, said Nakheel, the Palm’s master developer. It added: “Around 800 families are living in the villas on the fronds. The villas, Shoreline Apartments and Marina Residences, are the only homes developed by Nakheel on The Palm Jumeirah. The rest of the residential offerings are being developed by third-party developers,” said a company spokesperson.

The Marina Residences complex at the tip of the Palm’s trunk consists of six towers with 940 apartments and penthouses. A further 40 townhouses stand on a marina-fronted promenade.

Mohanad Alwadiya, Managing Director of Harbor Real Estate, said four residential projects were handed over last year – Tiara Residences, Oceana, Marina Residences and the Golden Mile.

He said 644 Tiara apartments and penthouses were delivered last year and six freehold luxury residential buildings with 858 apartments and 12 penthouses were handed over at Marina Residences. The marina development also includes 30 townhouses.

The Golden Mile Residences project comprising 10 waterfront buildings, and 780 freehold apartments – ranging from one-bedroom units to penthouses and townhouses – were delivered last year. Apartments and penthouses at Oceana’s seven buildings are now being handed over.

The Nakheel official said: “The Palm Jumeirah is now home to more than 12,000 residents and this figure is set to rise as more and more take up occupancy at the island’s various residential developments. There are approximately 1,500 villas on the fronds.”

Nakheel says the Palm has attracted buyers from Chile to China and New York to Nepal, with the first residents moving into the 4,000 villas and apartments completed at the end of 2006.