آثار قريبة وبعيدة المدى تتحقق عند التطبيق

Al Khaleej

Al Khaleej

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

Emirates Business 24-7

Emirates Business 24-7

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

Article from Emirates Business 24-7

Article from Emirates Business 24-7

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.

Handover

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

Article from Emirates Business 24-7

Article from Emirates Business 24-7

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

Article from Emirates Business 24-7

Article from Emirates Business 24-7

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.

Penthouses in Dubai more resilient than other assets

Article from Emirates Business 24-7

Article from Emirates Business 24-7

Penthouses in Dubai more resilient than other assets

Buyers of penthouses do not sell their property at low rates as their holding capacity is much better. (SUPPLIED)
of penthouses in Dubai have been relatively lower than other types of residential units as their buyers have the financial capacity to hold on to the units, realtors said.

However, owners need to offer “higher” discounts to find buyers in the secondary market since the product caters to a niche buyer segment.

Vineet Kumar, Head of Sales – Dubai, Asteco Property Management: “Buyers of penthouses do not sell their property at low rates as their holding capacity is much better since they are more financially stable.”

Mohanad Alwadiya, Managing Director, Harbor Real Estate said: “Penthouses in Dubai seem to be more resilient than other residential assets. Last year, there was an increase in the rental demand for penthouses in prime areas. This demand was mainly from high profile tenants who could take advantage of high quality units at affordable rates.

“In addition penthouses are limited in number, which has helped retain its value.”

Yolanta Farah, Associate Director, Head of Residential, Sales & Leasing, Group Seven Properties, said: “Penthouses are faring better than average units. More than regular units, penthouses are owned by end users as first or second home or guest house. These owners are not selling in current market, except in cases of higher necessity as part of property consolidation. Penthouses available on secondary market are usually not the truly special ones that a penthouse should have such as a top floor with a great view, good location and space.

“There is very little demand for any property at the moment, but there is hardly any availability of really special penthouses, either.”

Bernard Aoun, Manager – Residential Sales & Leasing, Better Homes, said if a client owns a penthouse it can be considered they may have a higher holding capacity.

“The penthouse properties have suffered just like any other real estate property in Dubai during the crisis. However, because there is limited supply they have survived better than the rest.”

According to real estate agents, penthouse prices have dropped anywhere between 25 and 50 per cent in the past one year. “The asking prices have seen a drop of 25 per cent to 30 per cent,” said Kumar.

“The selling price in secondary sales started from Dh2,000 per square foot for a penthouse in Emaar’s building in Dubai Marina. The recently released Executive Towers on Sheikh Zayed Road has a penthouse of 5,877 sq ft selling at Dh1,600 per sq ft amounting to Dh9.4 million.

Aoun said on an average, the prices of the penthouses in Dubai have come down by 50 per cent from 2008. Alwadiya said that prices of penthouses dropped by an average of 35 per cent since last year.

According to Group Seven Properties, some penthouses in Dubai’s secondary market are in the Golden Mile, with building number 4 developed by IFA going for Dh4.2m. Bayside Residence in Dubai Marina, developed by Trident at the 22nd floor; with a total area of 6,500 sq ft and a full Marina view is around Dh10m.

In South Ridge, Burj Downtown, a three-bedroom apartment of 3,003 sq ft area plus balcony with Burj views is around Dh5.9m. Indigo Tower in Jumeirah Lake Tower, a four-bedroom penthouse apartment of 3,745 sq ft area with lake views is Dh4.1m.

Real estate agents said that average return on investment (RoI) is between five and seven per cent for penthouses.

“We are looking today at between five per cent and seven per cent RoI, which in a depressed market is considered as a great return on investment,” said Aoun.

Better Homes also said average rental yields for penthouses currently are a minimum of five per cent in a case-by-case scenario.

Alwadiya said rental yields for penthouse is currently around three to five per cent compared to other residential assets.

“We believe penthouses can offer very handsome capital growth opportunities over the longer term. We estimate an average of 40 per cent in capital growth would be realistic over a six-to-seven year period and the downside risk to achieving this is considered minimal.”

Farah said while over-investment in real estate during 2008 put some people in trouble, those buying penthouses are generally educated buyers who know that buying the best in the best location is safer, regardless of market conditions.

Kumar said unlike the rest of the world, Dubai’s penthouses offer options to buyers to buy it as shell and core so buyers can finish the apartment to their liking with their personal choice.

Aoun said that it is not possible to compare Dubai and the rest of the world in terms of real estate because the emirate is still an emerging market where taste and requirements are often different.

However, Alwadiya said penthouses in Dubai are much bigger in space and offer better value for money in terms of price per square foot. “In addition, there are no property taxes in Dubai which makes owning a penthouse better,” he said.

“By international standards, the prices of penthouses in Dubai are low. Prime penthouses in Central London are being offered between Dh9,000 per sq ft and Dh10,000 per sq ft. In South Mumbai, it ranges between Dh2,700 per sq ft and Dh3,500 per sq ft and in Upper Manhattan it ranges between Dh8,500 per sq ft and Dh11,000 per sq ft.”

Farah said that in the pre-freehold times, in “old Dubai”, there were landlords who built penthouses true to their name.

Top picks

Tower: Le Reve Tower
Location: Dubai Marina
Project status: Ready
Developer: Sulaiman Al Bassam
Price: Dh18 million/Dh2,950 per square foot

Tower: The Residences
Location: Downtown Burj Khalifa Area
Project status: Ready
Developer: Emaar Properties
Price: Dh16m to Dh17m/Dh2,000 to Dh2,100 per sq ft

Tower: The Address Lake Hotel
Location: Downtown Burj Khalifa area
Project Status: Ready
Developer: Emaar Properties
Price: Dh16m/Dh3,555 per sq ft

Tower: Al Seef Tower 1
Location: Dubai Marina
Project Status: Ready
Developer: Deyaar Development
Price: Dh11m/Dh1,570 per sq ft

Tower: Bayside Residence
Location: Dubai Marina
Project Status: Ready
Developer: Trident International Holdings
Price: Dh10m/area – 6,500 square feet

Tower: Tiara Residence
Location: Palm Jumeirah
Project status: Ready
Developer: Zabeel Investments
Price: Dh9.5m

Tower: The Executive Tower
Location: Business Bay
Project status: Ready
Developer: Dubai Properties
Price: Dh7m/Dh1,000 per sq ft

Tower: Emirates Crown
Location: Dubai Marina
Project status: Ready
Developer: GGICO/Mohamed Saif Mohamed bin Shafar
Price: Dh7m/Dh850 per sq ft

Tower: Jumeirah Beach Residence, Bahar
Location: Dubai Marina
Project status: Ready
Developer: Dubai Properties
Price: Dh6.5m to Dh7.5m/Dh1,100 per sq ft to Dh1,200 per sq ft

Tower: South Ridge
Location: Burj Downtown
Project Status: Ready
Developer: Emaar
Price: Dh5.9m/area – 3,003 sq ft

Tower: Building No. 4, Golden Mile
Location: Palm Jumeirah
Project status: Ready
Developer: IFA Hotels and Resorts
Price: Dh4.2m/Dh1,000 per sq ft

Tower: Indigo Tower
Location: Jumeirah Lake Tower
Project Status: Ready
Developer: Jumeirah Properties Investment
Price: Dh4.1m/area – 3,745 sq ft

Tower: Lake Shore Tower
Location: Jumeirah Lake Tower
Project status: Ready and occupied
Developer: Al Bodor Real Estate Development
Price: Dh3m

Harbor Real Estate’s first Cedre Villas open house generated great demand

Article from Zawya

Article from Zawya

Demand for Villas and Townhouses is still very strong despite the current economic situation

Harbor Real Estate’s first Cedre Villas open house generated great demand

Harbor Real Estate, an integrated Real Estate Service Provider in Dubai, promoted several fully decorated units in the exclusive Cedre Villas in Dubai Silicon Oasis last Saturday. The open house day paraded Twin villas and Townhouses for sale and rent, and welcomed a large number of clients on the premises.

Clients who visited the project were excited about the quality of the finishing, layouts and architecture, the vast spaces, the overall serenity of the community and vigorously the attractive prices.

Mohanad Alwadiya, Managing Director of Harbor Real Estate, said: “Seeing is believing, presenting an open house is a great promotional methodology to attract potential clients, especially that the advantage is for the buyer nowadays. What we are witnessing here is a sign that economy have stabilized and individuals are confident to invest in well established properties that offer them real value for money”

“The project attracted buyers due to its potential when it comes to offering stable capital gains and above average annual rental yields. The attendees of the open house event included a diverse mix of nationalities. Due to the great results and high demand, we have decided to run another open house event on the 30th of January, where we will continue to offer our special added value package to the Harbor Real Estate clients” Added Alwadiya

Open house buyers will enjoy free maintenance for the first year in addition to 90% pre-approved financing up to 25 years and the option of 1 year in-house payment plan which will be offered to owner-occupiers.

The Cedre Villas project provides its residents uncompromised quality and 40% more space than any other villa in Dubai of the same type. The units entertain all tastes with 3 and 4 bedrooms contributing to multi-vibrant lifestyle amenities and smart homes facilities that answer everyone’s wishes.

Harbor Real Estate services have evolved from traditional real estate brokerage of merely bringing buyers and sellers together to innovative world class end-to-end real estate services. The company services include, Real Estate Tailored Research Services, Integrated Marketing Services, Sales, Leasing & Conversion Management Services, Real Estate Investment Portfolio Management Services and, Holistic Real Estate Legal Services.

For more information about Harbor and the special added value offers on Cedre Villas, please contact Harbor on: info@harbordubai.com

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Real estate legal advice a growing sector

Article from Freehold Monthly

Article from Freehold Monthly

Dubai – Real estate legal services are becoming more popular among existing investors and prospective buyers in Dubai.

Dr. Ali Al Jarman, legal partner – Harbor Real Estate and founder of Prestige Advocates, says real estate-related enquiries have increased since the 2008 financial downturn. “Many of our clients have serious concerns over the security of their real estate investments,” he says.

Prospective buyers are also seeking out legal advice prior to making transaction. “This was not the case in previous years and also contributed greatly to the problems that clients are facing as proper due diligence was not conducted prior to the sale and purchase of property. Most enquiries are usually concerned with the real estate regulations and legislations such as the date of completion of a project, delay penalties, invalidity of the contract, cancellations and payment commitments.”

RERA (Dubai’s Real Estate and Regulatory Agency) has recently proposed a free legal advice service for buyers and sellers, an initiative that Dr. Ali applauds: “We believe that this innovative policy could also assist in boosting the confidence levels in the real estate industry,” he says.

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Dubai’s properties need people

Article from Kippreport

Article from Kippreport

The emirate’s real estate sector can only pick up if Dubai’s population grows, says a new study. Transparency and better customer service are also essentials.

Dubai’s real estate market is facing a massive oversupply, and will need a quick growth in the emirate’s population in order to recover, according to the latest report released by property broker 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 report said, adding that Dubai Marina and Jumeirah Lakes Towers alone were expected to see around 10,200 new units in the next two years.
Dubai’s population declined between 5 percent and 8 percent in 2009; the city will need to see a growth in its population to increase property demand and “kick start the industry again,” the report said.

It’s also not going to be easy to attract existing investors. Demand last year was dampened by the lack of available credit and the tightening of lending rules by mortgage lenders. In 2010, investors are expected to 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,” it said.

One of the key things essential to increase the confidence of consumers in the market is to increase transparency, the report said. Currently, laws and regulations about disclosure are limited.

“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,” the report said.

The timely release of economic data will also help people assess the feasibility of their intended investments.
“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.

Dubai’s authorities have already started taking measures to regulate the emirate’s property market. Most recently, Dubai’s Real Estate Regulatory Agency (Rera) said on Sunday that it has signed a new deal with the Ministry of Labor to officially recognize real estate brokers as a separate professional category. Labor cards and residency visas issued to brokers will now include their designation, instead of categorizing them as sales staff. The authority said that the move would help to remove bogus brokers from the market.

“This is the first step towards a complete classification of the real estate professions in Dubai,” Marwan bin Ghalita, CEO of RERA, said in a statement, adding that the move will promote “transparency and professionalism” in the property sector.

In 2009, Rera announced that property developers in Dubai will have to pay the complete land price before selling off-plan developments and will also need to inject at least 20 percent of the project’s value before beginning construction.

Late last year, the Dubai Land Department also said that it was planning to introduce a new law to protect the rights of property investors during the first quarter of 2010.

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Construction targets to be met

Article from Gulf News

Article from Gulf News

Dubai-A total of 32,047 residential units are expected to come online this year, providing construction targets are met, according to Colliers International. Apartments are expected to account for 77 percent of the new residential units while villas will make up the rest.

The upcoming supply is set to bring down average rents and put pressure on landlords who, besides contending with lower prices, need to cover maintenance fees through rental yields as quickly as possible.

“In certain areas the increase in supply will potentially have an impact on rent being paid,” said Elaine Jones. Chief executive of Asteco Property management.
Negotiating Power

While tenants have considerably more negotiating power than they did 18 months ago, most landlord still expect payment in three to four cheques.

“The average number of cheques is still three and this has been relatively consistent for the past six months. Of course, there are still rental contracts based on one cheque and 12 cheques, but the majority are two to four cheques,” said Jones.

“During the last quarter, we also witnessed that the distress rentals that so characterized the rental activity of the first two quarters of 2009 have all but disappeared.

“Some landlords are now sticking to their negotiating positions and are more prepared to hold on to their properties and wait for the inevitable recovery,” said Mohanad Alwadiya, managing director of Harbor Real Estate.

“There is a belief that prices have reached realistic rates and there is very little room for price negotiations. Most of the tenants now negotiate payment terms and added value elements.”

Depending on the popularity of the area, certain units lend themselves more to rent negotiation. “If there are high occupancy rate in that particular building or development then there is usually little negotiating room on the rental rate,” Jesse Downs, director of research and advisory services at Landmark Advisory, told Gulf News.

“In this case, landlords tend to prefer to negotiate with the number of cheques or with an additional one month ‘s rent at no charge. For less desirable locations, developments with lower occupancy rates, or new buildings, there is usually more room to negotiate the rental rates. Of course, negotiations depend largely on asking prices.

There is variance in pricing strategies between the different agencies. Some brokerage firms list inventory at inflated levels and bring the rents down in the negotiation stages. Others list their inventory at more realistic rates and have low bid- ask spreads.”

Relocation

A continued trend of relocation from the outer emirates such as Ajman and Sharjah to Dubai can still be seen.

“Given the decline in Dubai rents in 2009, more people who are currently working in Dubai are opting to live in Dubai. As average rents decline, we expect this trend to increase with additional relocation from areas like Sharjah,” said Downs.

The trend seen in the fourth quarter of 2009 is predicted to continue early into 2010 with only a slight change in dynamics during the second quarter, especially when there is a better outlook of recovery, the projected supply and population figures.

A further drive that will affect rental rates is population growth generated by healthy commercial activity.

“Dubai needs to ensure that as the world economy starts to recover, it has positioned itself competitively as a place to do business,” said Alwadiya.

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