George Bush prompts Dubai realty price surge

Dubai house prices are up by 10-15% over the past year, and have leapt by around 5% in the last three months, according to industry sources. The accelerated pace of increase is the highest for more than two years, and down to the decline in US interest rates, high local rents and stock market weakness.
'We have seen a big surge in interest since George Bush visited Dubai last month,' one agent told AME Info. 'His tour of Dubai seemed to remind people about what is going on here, so perhaps it was worth the inconvenience to residents!'

Underpinning this surge in investment confidence is a quantum shift in the economics favouring investment in Dubai real estate.

Rental yields of 7-10% are looking even more attractive now that the best UAE deposit accounts pay less than 3%. Meanwhile, the cost of borrowing is falling, and real interest rates have turned sharply negative.

Carry trade
Large corporates and even one local hedge fund are in a position to borrow cheaply to put money into the local realty market, and achieve a carry trade between low US interest rates and the high rental yield on Dubai property.

Local home lenders have been slow to cut mortgage rates. But the Commercial Bank of Dubai has broken ranks and is offering mortgages from a little over 5% to clients with the best lending risk profile.

'I think it will take around three months for prices in Dubai to fully reflect these changing circumstances,' said a local REIT manager, speaking off the record. 'We already find that completed property is in very short supply. You can still find a few villas and apartments but not completed towers or compounds.'

Supply delays continue to plague Dubai. Some argue that too much is being built at the same time, so that all the projects are falling back from scheduled completion dates.

Project delays
With typical delays running from six months to well over a year, the supply of completed property cannot keep up with burgeoning demand from the constant stream of new residents, as many as 30,000 a month, though admittedly not all high income earners.

This is keeping an upward pressure on new rental prices, which are unaffected by the 5% rental cap, and this is driving the rental yield upwards which is presently at least keeping pace with capital value increases.

It looks like another red hot summer for Dubai real estate with the absence of attractive alternative investment options funnelling even more money into real estate. Global and local stock markets look unstable. Hedge funds had their worst January for eight years. Commodities could be about to top out.

But Dubai realty prices could fly a lot further. A new survey from Hamptons International showed prime residential property in Dubai cost an average of $16,500 per square metre compared to $83,750 in London, $43,500 in New York, $38,750 in Hong Kong and $28,250 in Miami.

Source Ameinfo

Latest Property News From Dubai

As fast as the market is moving and as fast as new residents arrive in Dubai so more news emerges about the property market, investment returns and potential, mortgages and title deeds in the UAE.

This article brings you some of the latest property news from Dubai to keep you up dated and to ensure that all your buying decisions are fully informed.

The title law situation in the UAE is believed to be moving ever closer to resolution. The current unsatisfactory state remains that while it is not illegal for a foreigner to hold freehold title it is neither explicitly legal. Experts in the UAE property market agree that 2005 will be the year that a federal property law is finally passed to back up Sheikh Mohammed bin Rashid Al Maktoom’s 2002 decree to allow foreigners the right to own freehold title in Dubai.

The passing of the law will be yet another booster to the already booming market and will provide increased consumer and investor confidence in the market in Dubai. Most see the passing of the law as simply tidying up loose ends, they do not see it as a momentous occurrence as they implicitly trust the statements relating to foreign freehold ownership rights that have been issued by Dubai government officials and Crown Prince Sheikh Mohammed bin Rashid Al Maktoum and Al Abbar.

The finance deals and mortgages available in Dubai are slowly improving and developing as the mortgage market matures. Local and international lenders are looking to increase lending, and it is believed that as the Dubai International Financial Centre attracts more financial institutions to the Emirate so diversification in the market, mortgage choice and competition for customers will benefit the consumer and keep interest rates stable.

At the moment those looking for financial assistance with property purchase are sincerely advised to shop around because fees and rates can be quite high and some lenders can be more or less flexible than others. Furthermore, those seeking assistance should try to have a mortgage at least agreed in principle before placing a deposit on their preferred property to avoid any disappointment.

The Dubai International Financial Centre (DIFC) has attracted massive early interest and it is expected that all the world’s leading financial players will seek to establish a presence there. There have already been some properties released for sale within the Centre and there are expected to be significant further developments of luxury apartments. Judging by the nature and price of property in the financial districts of New York, London and Tokyo, property within the Centre and surrounding districts are expected to command the highest price per square foot of all property in Dubai and the rental potential of such property is also expected to be massive according to property experts in Dubai.

For more information and news try http://www.dubaipropertygroup.com/

Empire Tower Abu Dhabi 35% sold

Empire International Investments, the real estate division of the multidisciplinary Empire Group, announced today that 35%, which equates to 160 units, in their prestigious ‘Empire Tower’ development have sold and that sales remain buoyant despite a recent price increase of 12%.

LLJ Property the exclusive sales and marketing agent for the project have witnessed a massive demand for apartments in the building from clients across the UAE and overseas.

Empire Tower has a broad appeal as it is competitively priced, with payment terms pegged to construction delivery and an interesting mix of 1, 2, 3 and 4 bedroom apartments.

Linda Loughnane, Managing Director of LLJ Property commented; “Sales have been extremely brisk as more investors wake up to the potential of the Abu Dhabi market and, Empire Tower is an excellent product offering potentially good returns for investors and owner occupiers alike.

In addition, 2007 has been a very strong year, we have seen lots of key announcements like the deals with the Guggenheim and the Louvre, whilst the Government of Abu Dhabi has revealed clear, well thought out plans about the development of the emirate over the next two decades.

Clients recognize these positive moves which are drivers of demand for quality residential and commercial property and can see clearly why Abu Dhabi is now the place to invest.”

Project spending within the emirate is estimated to exceed Dhs.1.2 trillion according to the latest figures from the Abu Dhabi Chamber of Commerce, with the lion’s share of Dhs.850 million being absorbed by the construction sector.

The volume of real estate sales within Abu Dhabi has risen steadily over the past 12 months with price increases being driven by the demand for quality residential and commercial property in the city.

This is good news for those who are investing in the market now, as they are able to see significant growth in their investments in the early months. Although the secondary market is only just beginning some investors are already trading property and making healthy profits.

Empire Tower is the first real estate project within Abu Dhabi for Empire International Investments, their Chairman, Haytham Al-Tajir is delighted with the results of their experience in the market to date; “We recognized early on that the plans for Abu Dhabi made it an interesting proposition for us as developers. We have invested in a prominent plot and designed a distinctive building which will impact on the future skyline of the city.

These elements combined with the appointment of LLJ Property as our exclusive sales agents have given us an edge in the market and enabled the sale of 35% of the project in 12 weeks.”

A price increase across the market has been inevitable as construction costs are rising, driven by increased demand in the sector and the inflation of material prices caused by the weakening of the dollar.

However market analysts continue to predict further price increases as they believe that property in the city is currently undervalued. This makes property in the emirate an investment with potential for high capital gains.

LLJ Property are confident in predicting further price increases into 2008 as more product is launched and the new Abu Dhabi begins to rise.

Empire Tower will be selling on stand B8 at the International Real Estate and Investment Show taking place at ADNEC from 30th January to 2nd February 2008.