Ask the Experts

Every month we invite you to have your property questions answered by an expert. This month, Mohanad Alwadiya tackles the task.

Q I’ve been looking at a few Union Properties developments, but am unsure about buying leasehold. How does this differ to freehold property in Dubai?

A The choice between freehold and leasehold property depends mainly on your particular needs and the asset type you wish to invest in. If you wish to buy a property for a limited number of years or you are buying a property to benefit from its annual rental yield, leasehold should be your preferable option as the cost would be considerably less compared to freehold. Similarly, the cost of leasehold for 30 years will be less than that for 99 years. Leasehold is common in many established overseas markets for high-rise apartments and integrated communities. This represents a benefit for owners in Dubai particularly as certain owners may visit infrequently and ‘forget’ to pay their maintenance bills. Under leasehold tenure contracts, the landlord could apply for an eviction order after a long period of non-payment, therefore safeguarding the integrity of the whole property or community.

Q Judging from the property classifieds, rents in Dubai Marina haven’t gone down much at all. Some even seem to have risen despite more supply coming on to the market. I’d like to buy an apartment to live in at the Marina; I’m just wondering which towers and areas of the Marina are the best options for long-term appreciation?

A During Q3 2009, Dubai Marina apartments witnessed a noticeable increase in rental rates, fuelled by the increased demand from visitors and tenants from Dubai and Abu Dhabi. This factor provided sellers and landlords with room to reconsider their offered prices with the aim of maximising their return on investment. Estimating long-term capital growth requires some careful thinking. This is where certain considerations such as location, property type, views, quality of structure, fit and finish, amenities, developer reputation and an estimation of future demand are taken into account.

You should seek some professional advice from property consultants. Given your personal objective is to maximise capital appreciation, I would recommend you consider towers in the central part of the Marina next to JBR (e.g. Al Sahab or Marina Promenade towers), and minutes away from The Walk.

Q I’m thinking of leaving my job and setting up a small company in a free zone. I’ve been impressed by some commercial buildings at Jumeirah Lakes Towers (JLT) as I do a lot of work in Abu Dhabi. Should I get a multiple-year lease at a discounted rate, or opt for something more short-term?

A I believe that the recession may be the best time to start a new business as you will be able to generate great savings and benefit from the reduced inflation rates which can impact your start up costs. JLT enjoys a strategic location and has a fantastic master plan. It also has a good balance between office and residential space.

Office tenants have the tendency to relocate less frequently compared to residential tenants due to cost of relocation, interior design and building client familiarity with their location. Since you will be able to obtain a better bargain from a long-term lease, I would suggest you opt for the multiple-year lease contract at a discounted rate which will only help reduce your set up costs and overheads over time.


How mergers could save the property and financial sectors

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

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

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

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

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

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

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

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

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

Meadows, Jumeirah Islands top sales transactions

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Brokers Must Adopt Fresh Approach

Despite the barrage of articles and opinions depicting economic doom and gloom of a mammoth scale, reports of tumbling property values, double-digit percentages losses by developers and property investors (the list goes on), no one is paying attention to the current state of the brokerage industry. The remaining standing companies still believe that, if things are done differently, with a client-centric philosophy, an incisive fact- based approach and a clear set of realistic objectives and values derived from truly objective assessments, the existence of real opportunities in the UAE real estate scene to create and build for the long-term was undeniable.

Pre-2008 saw all manner of people get into the real estate brokerage industry. The lucrative and easy to make commissions were too attractive to ignore. That is fine since there is nothing wrong in wanting to (legally) better yourself or income. But many thought their skills alone were what brought in results – none more so than the plethora of salespeople, who flocked to the field, many of whom were not familiar with properties.

Now, as the UAE property market matures through its first crisis, the nature of selling and buying realty is changing irreversibly and with it a lot of new industry and consumer trends are emerging, one of which is the lack of satisfaction of customers with real estate brokers. According to a survey conducted by Harbor Real Estate in October 2009, 61 per cent of consumers who bought property in the last two years are dissatisfied with the performance of real estate agents who brokered their purchases. What we have here is an indicator that brokerage companies need to shape up in order to survive during and beyond the financial crisis. The level of proficiency in effective consultancy, based on sound knowledge of the market and an understanding of the buyer’s requirements, appears to be the main shortcoming. Buyers today have choice and are more knowledgeable about the market, and they seek advice from professionals whom they feel they can trust. Unfortunately, in the majority of cases, consumers are left feeling disappointed. This lack of trust is producing a lot of challenges for property brokers, including questioning of their standard commission rates, lack of sole representation or appointment and negative pre-judgment and perceptions.

The main concern is that these problems are not only affecting bad and illegal freelance brokers only but also impacting the professional and experienced brokers and overall reputation of the industry as well.

Traditionally, real estate has been viewed as a sales industry. The scenario is radically different in today’s environment. Customers have evolved to become more educated, better informed, more value conscious and demand more for their dirhams. Their expectations of the companies and the brokers they buy or sell through are much higher. They are no longer willing to be pushed around by unprofessional brokers. In short, they want better customer service. So brokers have to work harder and spend more effort and time to regain the trust of buyers and sellers. They need to realise that true and sustainable success comes from repeat business and word-of-mouth.

Customer service is one of the greatest keys that can help real estate service providers succeed. It can literally make or break a company. This is so because the entire business, marketing, sales, leasing and profits depend on customers.

Great marketing can help brokerage companies acquire new customers, but it is great customer service that ensures that the customers keep coming back. According to our survey, most customers quit dealing with a certain brokerage company because of an indifferent attitude towards them from the business owner, managers and/or employees. A typical brokerage company will only hear from a handful of dissatisfied customers; most of the rest of the customers will just quietly go away and never come back. To further compound the problem, a typical dissatisfied customer will tell an average of seven to 10 people about his problem and the bad service offered by the company.

Pas du tout, encore une fois, si ce n’est pas à l’intérieur trop longtemps. Il y a un autre danger: il n’y a pas beaucoup d’espace et un mouvement négligent d’un tampon peut pousser plus lisez plus ici d’où il est plus difficile de l’obtenir. Mais il y a un moyen de ne pas verser un lit sans tampon: appuyez sur le diaphragme, puis la sélection sera temporairement bloquée sans “bouchons” externe.

Local and Federal Authorities Need to Form Much Closer Ties

The UAE real estate sector must have more co-ordination between regulatory bodies in different emirates and the proposed federal real estate regulatory body to tackle various issues concerning the sector, analysts said.

“What the government needs to do is have real estate regulatory bodies of each emirate to liaise with one central regulatory body and the federal immigration department to oversee real estate issues such as visa regulations,” said Chet Riley, Vice-President, Equities Real Estate Analyst, Nomura International.

“Three years ago, people were trying to encourage buyers through visa offers. When the market got overheated, visa rules were tightened. Today there is a lot of confusion over the rules and regulations in the real estate sector regarding visas.”

He said: “A central regulatory body for the oversight of issues such as immigration is probably required to ensure the consistent application of immigration law and prevent forms of regulatory arbitrage related to real estate.

“There are aspects of regulations that we think should remain at the emirate level, which could include dispute resolutions and arbitration, planning consents and associated municipality issues such as infrastructural requirements.”

Emirates Business reported yesterday that the Ajman Real Estate Regulatory Agency (Arra) had submitted a proposal to federal authorities to overhaul current property visa regulations. Arra wants to remove property values, fixed incomes or compulsory exits as criteria for granting or renewing six-month residency visas. 

Ajman’s regulatory body put in a five-point submission and said it should be possible to renew visas every six months for up to three years without the need to leave the country.

Parvees Gafur, Executive Vice-President – Sales, Gowealthy real estate, said: “Co-ordinated efforts are needed between real estate regulatory bodies in various emirates of the country and a central regulatory body that will work in close connection with the immigration department of the country to tackle visa issues of real estate investors.”

“We would even recommend that the immigration department allocate representative resources to each of the real estate regulatory bodies to provide an integrated service package and assist investors with their visa queries promptly,” said Gafur.

He said: “At an operational level, a decentralised approach with individual real estate bodies within each emirate will be far more efficient and effective to govern real estate regulations as each emirate has different challenges, visions and focus. 

“However, a central authority established to monitor the progress of individual bodies will help in guiding various factions towards overall positioning of the emirate to occupy a strategic place within the global economic platform. 

“Such an entity can facilitate best practices and federal-local interactions that can have a positive influence on shaping the overall identity of the emirate.”

Farina Ahmed, CEO, BSEL Infrastructure, an Ajman developer, said: “Any co-ordinated effort taken to bridge gaps in the real estate sector is a welcome move. I believe there should be co-ordinated efforts among different emirates’ regulatory bodies and one central body.” 

Real estate analysts in the UAE have welcomed Arra’s initiative to submit a proposal to the federal government.

Mohanad Alwadiya, Managing Director, Harbor Real Estate, said: “The Arra initiative is a positive move towards attracting foreign investment and boosting the level of confidence among all the relevant stakeholders in the property industry.”

Iseeb Rehman, Managing Director, Sherwoods Independent Property Consultants, said: “The proposal is a positive move. Any effort taken to resolve real estate issues by real estate regulatory bodies is a step in the right direction.”

“In Ajman the real estate sector has been seeing some swift and timely action. The feedback from clients and developers is that Arra is resolving issues quickly and trying to provide clarity.

“Conditions for residing in the UAE is a federal issue, but they need to consider current market climate versus current income situation. Regulators need to be realistic and at the same time appealing to people looking to come to the UAE. If conditions become too stringent it will be harder for people to comply.”

Riley said: “Arra and Rera [Dubai Real Estate Regulatory Authority] are being relatively proactive in the area of co-ordination, which is a positive step and it is very important to continue dialogues among the six emirates. Under the present circumstances, Arra’s initiative, though in the initial stages, is a step in the right direction. We welcome the initiative to establish visa regulations and think this should be set at a federal level in conjunction with immigration authorities to remove any confusion. Currently, the major challenge faced by the region is one of customer confidence, be it investors, end users or even corporate entities.”

“It would, however, be difficult to have a minimum price level set across the emirates given the disparity of pricing in each area. The key issue that we see is the ability of the applicant to support themselves and their dependants, rather than the value of the property, if they were looking to reside in the country,” said Riley.

“Ajman is a different market from Dubai. Imposing limits across the board will be difficult in all the emirates,” he said.

Gafur said: “The proposal is a first step towards addressing visa issues. If implemented, steps such as these will give further impetus to a larger segment of investors and business entities that have long-term business plans in the region.”

“The minimum criteria for property investment should be looked into very closely and the medium- to long-term impacts of such steps have to be assessed using situational planning and forecasting studies. Investment strata-led visa restrictions, if planned efficiently, could have a positive influence in the market by ensuring the right kind of investments and investors are at play over substantial and optimum time periods.”

The BSEL CEO said: “The six-month visa regulation is not enough for an investor in Ajman. Residency permit should be for three years. With six months’ visa tenure, investors lose faith in the real estate market in Ajman.”

Alwadiya said the property market recovery in the UAE needs to be supported by solid economic drivers and regulations. “The visa issue is one that has placed a lot of pressure on recently retrenched expatriates when trying to find alternative employment or heading home. The Department of Naturalisation and Residency has implemented a law which will grant six-month renewable visa to those who invest in freehold property in the UAE.”

“While this is a positive move to assure potential investors, the six-month period is considered to be too limited a duration to be meaningful to many investors. It is thought the federal law should match the general residency law whereby investors will be eligible for a three-year residency visa provided they visited the emirate at least once every six months. This approach will appear to be far more appealing and enticing for investors,” said Alwadiya.

Gafur said: “Confidence-building measures at the federal and regulatory level is paramount in bringing back faith to the market and spur medium- to long-term investments into the country.”

“Fundamentally, the long-term success of an economy is influenced primarily by the potential of the economy to s
ustain itself on the basis of its inherent resources and the faith of internal and external stakeholders. 

“And this faith is determined by the strength of relevant regulatory systems that shape, manage and control various segments of industry that spur the economy, such as legal systems, banking and financial entities and industry bodies.”

Gafur said with substantially reduced market prices for properties and prevailing investor sentiment as the background, a planned and phased overhaul of visa regulations is critical to the long-term success of the emirate. 

“Visa regulation changes can have immediate and substantial effects on the long-term business and operational sentiment of the investing public and should be approached with extreme care. Ajman has come a long way in stamping its brand of investment potential, especially within the mid-segment of investors from South Asia and the United Kingdom. Unfortunately, this growth has been fraught with teething issues, compounded by the present economic downturn.

“The immediate elements that need to be looked into would be infrastructure – power requirements, for example – and further clarity in regulatory and legal frameworks, especially within the real estate sector,” he said.

Consumers Dissatisfied

Harbor Real Estate Brokerage, an integrated real estate service provider in Dubai, says that 61% of consumers who bought property in the last two years are dissatisfied with the performance of real estate agents who brokered their purchases, according to a recent study conducted by Harbor Real Estate.

The study interviewed 178 property owners over a four month period in a series of face-to-face interviews. Participants evaluated property brokers according to knowledge and skills, ethics and behavior, consultative ability, and empathy

Property expert Mohanad Alwadiya tackles your property questions

Q: We’re looking to buy a villa in Dubai in the coming year. How do you rate Jumeirah Village as an area to buy property in? What are the pros and cons?

A: Phase two of Jumeirah Village has just been handed over and this has created a buzz in the market, especially in the rental market for affordable two-bedroom villas. According to Nakheel, they are very confident and looking forward to completing all of the 2,200 villas by the end of this year, which is exciting news for the owners of house there. The pros are the affordable prices, a well-planned villa community, a good mix of planned retail and community facilities and the well designed villas and townhouses.

Although Jumeirah Village is strategically located, access is perceived to be inconvenient and it is in close proximity to high voltage power lines. The section that Nakheel is developing is progressing as planned. However, the Jumeirah Village Circle part, which is developed by private developers, is really behind schedule and is creating a lot of negative word of mouth in the marketplace and hence affecting the overall reputation of the Jumeirah Village development.
I would recommend buying a villa there because of the attractive prices and because the supply of villas is much lower than apartments and hence it offers a safer investment. If you are buying a villa to live in, Jumeirah Village offers an excellent community lifestyle.

Q: My wife and I have been looking at possibly buying a two-bedroom apartment at Burj Views in Downtown Burj Dubai as a buy-to-let property. Do you think this would be a reasonable option?

A: The Burj Dubai area is becoming popular with end-users because of the enjoyable living experience it offers. Having said that, and given the popularity of this area, the selling prices of units there have been inflated by the secondary market and resale activities. This has put a lot of pressure on rental yields. The rental return increase could not keep pace with sale prices as potential tenants would compare prices with other competitive areas in Dubai. High quality property consistently generates higher average yields over the long term. Affordable housing is expected to generate higher yields over the short-term before the lower quality of the establishment begins to be reflected in potential tenant valuations.

Q: There have been reports about rental increases in some areas of Dubai. In which areas do you think renters can still get good value for money?

A: Tenants can still expect to get bargain rental deals across the majority of the freehold zones in Dubai. I would recommend Jumeirah Lakes Towers as it remains very much underrated overall.
This development enjoys a very strategic location and has a fantastic master plan yet its true potential is still to be recognised. JLT has a good balance between office space and residential offerings.
The prices are at least 15% cheaper than Dubai Marina and Jumeirah Lakes Towers has the potential to achieve the same status as Dubai Marina, and in a very short time.
Do you have a property question that needs answering? Email along with your contact details

UAE Banks in Position to start lending soon Reveals Harbor Report

أآد السيد مهند الوادية المدير الإداري لشرآة هاربور للوساطة العقارية بأن البنوك
الإماراتية في وضع قوي يمكنها خلال الفترة الحالية من استئناف عمليات الإقراضفي
المجال العقاري حسب تقرير هاربور الفصلي الذي سيصدر في نهاية الشهر الحالي،
حيث ذآر السيد مهند رئيس تحرير التقرير بأن البنوك الإماراتية تعاملت مع الأزمة
الإقتصادية العالمية بشكل يعزز رؤوس أموالها من خلال التدابير التي اتخذتها بقيادة
البنك المرآزي، فوصلت قيمة رؤوس أموال البنوك إلى 200 مليار درهما خلال شهر
مايو الماضي.

وقال السيد الوادية “إن أهم هذه التدابير التي طبقتها البنوك هي تقديم أسعار فائدة أعلى
للمدخرين واتخاذ نهج متحفظ على عمليات الإقراض، حيث أن هذه الإجراءات وبلا شك
ستساهم بشكل آبير في تأمين القطاع المصرفي بالإمارات من المخاطر المحتملة وبالتالي يساعد دولة الإمارات على
الإنتعاش من الأزمة الإقتصادية”

ويتطرق تقرير هاربور الفصلي إلى الأسباب التي أدت إلى انخفاض حاد في السيولة في الأسواق إضافة إلى طرحه
لدلائل تفيد بعودتها للتدفق بشكل بطيء، آما يؤآد التقرير على أهمية اتباع قانون معلومات الإئتمان ويسلط الضوء
على حقيقة أن البنوك الإماراتية حاليا مازالت متشددة في اعتمادها لمعاييرإدارة المخاطر لديها .

وذآر مهند الوادية في تقرير هاربور الفصلي بأنه على الرغم من ظهور علامات بدء تدفق السيولة إلى أسواق
العقارات الإماراتية والعالمية إلا أن عدداً آبيراً من المستثمرين العقاريين الحاليين والمستقبليين يشعرون بالإحباط
نتيجة لبطء هذا التدفق. فليس فقط انخفض سعر الفائدة المشترك بين بنوك دولة الإمارات العربية المتحدة
“إيبور”مقارنة بأسعار الذروة التي بلغت 4.78 % في تشرين الثاني / نوفمبر من العام 2008 مقابل 2.46 % فقط
في الربع الثاني من العام الحالي 2009 ، ولكن العديد من البنوك مازالت تحافظ نوعا ما على مستويات القروض
المنخفضة نسبيا مقابل الإيداعات المصرفية.

ويتابع التقرير، بالرغم من وجود قابلية ضئيلة للمخاطرة فإن السيولة ستتدفق في القريب العاجل بالأسواق وأنه يمكن
لوآالة ائتمان منظمة الحد من المخاطر المرتبطة بعمليات القروض ومساعدة الدولة على الإنتعاش.
” ينظر إلى تطبيق قانون معلومات الإئتمان على أنه خطوة إيجابية نحو الشفافية والحد من المخاطر التي تواجهها
البنوك وسيخلق هذا القانون إطاراً من الحقوق والإلتزامات لمقدمي البيانات ومستخدمي المعلومات والأفراد على حد
سواء”. اضاف السيد مهند الوادية

وأوضح بأن هذا القانون له آثار إيجابية بارزة تترتب عليه وخاصة من خلال مبدأ الشفافية الذي سيتيح الفرصة
للمصارف بأن تكون سريعة في اتخاذ قراراتها والتخفيف من حدة المخاطر المالية والتقليل من النظام البيروقراطي
آما أنه يعد خطوة إيجابية نحو نضج واستقرار وآفاءة القطاع المالي، مما سيؤدي مرة أخرى إلى ازدهار قطاع
العقارات في الدولة .

سيكون تقرير هاربور الفصلي متاحاً على شبكة الإنترنت اعتباراً من نهاية شهر تموز/يوليو الحالي ويمكن تحميله : من خلال موقع شرآة هاربور للوساطة العقارية

Ask the experts

Every week, we invite you to have your property questions answered by an expert. This week, Mohanad Alwadiya* tackles the task.

Q.. With banks willing to offer financing for apartments, I’m thinking of buying somewhere like The Residence in Downtown Burj Dubai. Do you think this a good ove? Can I expect a decent appreciation over, say, a five year period?

A.. I would say it’s definitely a good move. The Residence, Downtown Burj Dubai represents fantastic value at this time and with the market approaching the ‘bottom’,
the opportunity to make solid capital gains, particularly with a five-year investment horizon is very strong. In addition, with the Burj Dubai approaching completion, your
capital gain in the short-term will be accelerated. Remember that your future capital gain, regardless of property, will be heavily influenced by the decisions you make today. The fundamentals still apply and considerations such as the view, location, fit and finish, configuration and overall quality will have a big bearing on your ability to command a premium when you decide to resell in the future.

Q.. I’m thinking of buying an apartment in a reasonably priced new development, maybe Discovery Gardens. I’m just wondering if there are any hidden charges should I be aware of?

A.. First of all, you need to consider the charges associated with the transaction itself. If you purchase an apartment through a real estate agent, you will normally need to pay a 2% agency commission at the time of purchase. In addition to this amount, transfer fees of 2% will be payable to the Land Department and registration fees of Dh5,000 will apply. If you are financing your purchase, there are additional charges payable to your finance provider. These will vary between 1% and 1.5% of the total loan amount. Once you have moved into your new Discovery Gardens apartment, you will then need to pay an annual maintenance fee, which is currently about Dh30/ft², and includes your central cooling charges. However, this amount is currently under review and is expected to reduce significantly according to April 2009 press reports. Additionally, a further reduction is expected once the Owners Association is formed in accordance with the new strata title legislation. Alhough they’re not really‘hidden charges’, don’t forget that you will need to budget for property and contents insurance and, unless you want to live in the dark, you will need to account for DEWA (Dubai Electricity and Water Authority) expenses as well.

Q.. I’ve been told prime investment properties such as villas on Palm Jumeirah have suddenly become difficult to buy, as prices have dropped and sellers are withdrawing their properties from the market. Do you think prices have bottomed out there?

A.. By and large, yes. I think prices for villas have reached a bottom on Palm Jumeirah and it is extremely difficult to breach this floor.