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.

Dubai Property Prices Are Still On The Up But How Long Can It Last?

A recent advert for a Dubai apartment tower offered readers the opportunity to buy into the development prior to prices rising by 10% on April. Either this is an extremely clever marketing tactic to get individuals to sign up to beat a price hike, or this indicates that the Dubai property market is far stronger than some may think.

A brief glimpse through the saturated pages of the property sections in local newspapers confirms that price levels are indeed on the up in 2006. If you look at apartments in The Greens or villas in The Meadows you will discover that 10% is around the typical rate of house price inflation so far this year.

How can this be explained? We are looking at completed property, ready for occupation rather than one of the many towers emerging from the ground in the Dubai Marina and Jumeirah Lake Towers area. But this does not explain the advertisement proclaiming a 10% rise for off-plan apartment prices.

Maybe the downward turn in the Gulf Stock Markets has led to a a second wave of investor interest in the Dubai property market . This is the case in classic investment theory ; a property boom will usually accelerate after a stock market crash due to a re-direction of funds from one asset class to another. Investors will adapt to seek the best returns.

It has to be said that Dubai property is still attractively or at most fairly valued, and that does leave some room for speculators to drive prices to more exceptional levels. Yields on Dubai villas of 7.5% compare very favorably with 2-3% available in more mature markets like the UK, and are therefore attractive to investors who will drive prices higher and rental returns downwards.

There is also the situation that the oversupply of property in Dubai remains somewhere in the future. At the moment apartments and villas ready for rental are snapped up in days as people are still flooding into Dubai to join in the economic boom.

This vigorous rental market again encourages investors, and certainly the upward force on rentals is still very clear, in spite of the 15% Government cap on increases which is extensively side-stepped by vacating property and re-letting it. so buoyant letting conditions are another buttress for property prices.

Unwearying delays to the delivery of new property also boost the demand for available property, and therefore rental and property values. This still represents an upward cycle - and the fall off in demand required to dampen the market is just not evident, even if the market is slower than it was 18 months ago.

The hard thing for buyers is to know whether to leap in now before prices and rents rise or to wait in aniticpation that the real estate market will correct itself like the local stock market. However, that could turn out to be a tedious and costly wait, even if this is the most likely outcome in the end.

Dubai Property Market Report - First Independent Report on Dubai Property Launched

The launch of the Dubai Property Report has been announced by IFA Hotels & Resorts, a subsidiary of the main investor on The Palm Jumeirah, Kuwait's International Financial Advisors.

IFA Hotels and Resorts have supported the publication of the Dubai Property Report, which is currently the only independent report on Dubai's booming property market.

The Dubai Property Report makes valuable reading for investors as well as those looking to relocate to Dubai and buy a home there. The Dubai Property Report examines in detail the economic indicators for the growing property market and the also the potential risks in the property market. It also covers the legalities and practicalities of buying property in Dubai and examines the growing number of options available for financing property in Dubai.

The Dubai Property Report also lists the major developments now available to foreigner buyers, showing when they will be completed and outlining the buying process. Property management and letting and the resale market are also covered by the Report.

Contributions from a number of experts in Dubai real estate add to the on the ground insight that the report offers on the current market situation in Dubai.

The Report will no doubt help buyers plan their investments and will serve as a complete reference for those considering buying property in Dubai.

The report can be ordered here

See Other Books and Reports on Dubai

The Newsdesk Has Moved

The Newsdesk has now moved to the new and improved website PropertyNewsdesk.com where you will find the best property information, news and resources out there. Stop by now

My thanks to those who have supported the Newsdesks here at blogger.com and to Google for the fantastic service.

See you at the PropertyNewsdesk.com

Tracey Meagher

$1.1 bn Worth of Sales … In One Month!

The Dubai Lands and Properties Department have recorded for the month of May an astounding $1.1bn in land deals including sales, mortgages and grants. Just over 450 sales worth $575m were concluded, 284 mortgages worth $483m and grants valued at $67m.

Nakheel wins ‘International Samoter Award

Nakheel, the United Arab Emirate's leading property developer, announced today that they have received global recognition for their leading design and exceptional vision, from the esteemed construction awards ceremony, held in Italy, by Samoter, the International Exhibition of Earth Moving, Site and Building Industry Machinery.

"It is fantastic that Nakheel is being recognized for its iconic developments, by a global audience, and on such a prominent international platform. Never before have projects of this magnitude been imagined, let alone undertaken" said Sultan Ahmed bin Sulayem, Executive Chairman, Nakheel.

This international commendation, received for the iconic creation and dramatic design of both The Palm, and The World projects, has been shared with the leadership of the country, Nakheel's founders, and representatives of Dubai's government. The prestigious 'International State' award was presented by His Excellency Pietro Lunardi, Italian Minister of Public Works, to Mr Mahmood Saleh, Secretary General, The Corporate Office, UAE, for their outstanding support and innovative architectural vision of the future.

Commenting on the award he accepted on behalf of The Corporate Office, Mr Mahmood Saleh, Secretary General, The Corporate Office, said "such an international achievement, highlighting the dynamism of Dubai, enables us to convey to the international audience the exceptional speed of development and unparalleled dynamism currently taking place in the United Arab Emirates. As a country we have a clear vision of expansion, and we are uniquely positioned to execute this vision with clarity and speed...The Palm and The World are two such visionary projects."

Sultan Ahmed bin Sulayem, Executive Chairman, Nakheel continued, "To be presented with such a highly esteemed award affirms Nakheel's status as a global player and reflects our precise sense of vision. This accomplishment highlights the immense visionary powers of the company, powers that enable us to not only imagine, but also deliver these mega project promises into a reality."
Satellite rendering of Nakheel's visionary projects

The first stages of development for The Palm, Jumeriah are now complete. Sand reclamation has reached 100% and construction of both the supporting infrastructure and the exclusive villas is well underway and sand reclamation on The World has already surpassed the 50% mark. Once the projects are complete they are expected to be visible from the moon; the Palm, Jumeriah is already visible from space.

GoWealthy.com

Dubai property: demand greatly exceeds supply

A friend just got a demand for a 37% rental increase in Dubai this week, and paid it as there was no cheaper alternative. Similarly if you want to buy a one-bedroom flat in the re-sale market there were none at the last inspection of the classified ads.
United Arab Emirates: 15 minutes ago

This pattern is repeated in most sectors of the Dubai market. Buying off-plan re-sales is rather different; there are still many greedy speculators sat on partial payments whose price expectations are very ambitious. But of course you can not actually live in an off-plan apartment.

Indeed, the crux of the supply and demand equation in Dubai is that most building programmes are running a long way behind schedule. Nakheel is promising a definitive timetable for delivery 'within four weeks' but buyers in the Jumeirah Islands villa project have been annoyed that their moving in date of this month is now October, or it was this week.

Delays on delivery are not new in Dubai, but waiting times are getting longer. The Meadows 3 and 4 came in two months late just over a year ago, now slippages of more than six months are the norm.

This adds to the pressure on the existing housing stock. Last year some 250,000 new residents moved into Dubai. Now even allowing for the fact that perhaps only a quarter needed upscale housing, this still amounts to more than 60,000 people in need of a home.

Now if a new housing project is late those people still have to live somewhere. That adds to the competition for the existing housing stock and allows landlords to jack up the rental rates. Actually the market does this; landlords just pick up the cheques.

Higher rents mean that yields are better for existing home owners, and make property investment more attractive therefore boosting demand for homes and house prices. Meanwhile, those in rented accommodation get fed up with rising rents and go and buy something.

This is the supply and demand dynamic of a rapidly growing population like Dubai. Those who have hoped for a sudden oversupply of property have been very disappointed so far, and the day of oversupply keeps on getting delayed, just like most of the actual projects. This is no surprise as one is partly the cause of the other.

Under this kind of virtuous investment cycle house prices will continue to rise until the market overheats, and residents can not afford to live in Dubai.

However, in Europe and other parts of the world people are used to living in much smaller and crowded accommodation, and it could be some time before Dubai housing comes close to a true crisis point; new supply will therefore relieve pressure rather than dampen the market, and is certainly not about to crash it anytime soon.

Until that distant crisis point, the supply/demand equation will push rents and house prices higher and higher; and the recent arrival of local wage and consumer price inflation can only enhance this effect further.

Ameinfo

Light Rail to Waterfront

The $3.4bn Dubai light rail linking Dubai International Airport and Jebel Ali airport may run on to Nakheel's Waterfront development close to the Abu Dhabi border, Nakheel CEO James Wilson is reported as saying in Gulf News. Nakheel is forming a new unit, Waterfront Company, for the ambitious Waterfront project which will be built over ten years and have a capacity for 500,000 residents.

Ameinfo

Latest News From Emaar Properties

Emaar Properties has come to symbolize the fierce ambition and drive of Dubai to succeed in all circumstances! A world-class company, Emaar Properties has come to be known for innovative, high quality real estate development. Emaar Properties is indeed contributing towards the growth of Dubai as a tourist destination!

Established in 1997, Emaar Properties has set its sight on creating new architectural benchmarks for global property developers! Emaar Properties currently have ten major real estate projects under various stages of development. These developments include Dubai Marina, Arabian Ranches, Emirates Hills, The Meadows, The Springs, The Lakes, The Greens and Emaar Towers in downtown Dubai. Additionally, the company also owns the Gold and Diamond Park! It has also begun construction of Burj Dubai - the tallest tower in the world and The Dubai Mall, which is the largest shopping center in the world.

In its portfolio of real estate projects, Emaar is building affordable apartments to exclusive estates.

Emirates Living, for instance, is a collection of neighboring Emaar properties that includes Emirates Hills, The Lakes, The Meadows, The Springs and The Greens. They have provided the community with beautiful homes to be proud of in the tranquil, scenic landscapes! Dubai Marina, world-class project built at the centre of Jumeirah, presents beautiful homes along with resort hotels, upper class shopping, beautiful beaches, and a scenic marina.

Burj Dubai, slated to be the world's tallest tower, will be a landmark not just in the region but in the world as well! Burj Dubai, the world's most prestigious address, will position Dubai among the leading cities of the world, driving tourists to the landmark architecture each year that will encompass residential, commercial, hotel, entertainment, and the world largest shopping mall. Petronas Towers in Malaysia is 452 metres tall while Chicago's Sears Tower is 442 meters tall. Currently, these are the world's tallest buildings. While other cities have announced plans to surpass these two buildings in their height, Burj Dubai's height will remain a closely-guarded secret for sometime but be assured it will beat all records - announcing the arrival of Dubai irreversibly on the world stage!

The Old Town with its unique architecture strives to relive the ambience of erstwhile Arabia. Old Town will stand out for its sheer beauty with five-star dining and outdoor cafes overlooking parks and waterways. The Dubai Mall will set new benchmarks in mega-mall retailing with nine million square foot Dubai Mall. Largest mall in the world, Dubai Mall will be apt company for Burj Dubai – the world's tallest tower. Dubai Mall will reportedly be larger than 50 international soccer pitches! Phew!

The Old Town will feature low-rise three storey apartment buildings and some mid-rise towers with penthouses. The Residences will comprises 6 exclusive towers over 20 acres of land embracing a dramatic man-made lake, Burj Dubai and Dubai Mall.

These are only some of the projects currently underway at Emaar! To push the growth of its core business, it has diversified into associated businesses that support its core business - Dubai Bank, Amlak Finance, Emrill Services, and Sahm Technologies.

Strategiy

The good life on the cheap, a reason to buy in Dubai

Long-term Dubai residents often forget how lucky they are compared with citizens in other major cities around the world. Many aspects of living in Dubai are still quite amazingly cheap.

After accommodation owning a car is probably the biggest expense for many people. One hidden advantage of living in Dubai is that car ownership is quite incredibly inexpensive.

First, vehicles cost the lowest global price, tax free. Second, insurance is inexpensive compared with other countries. Thirdly, petrol is $1.09 a gallon. Fourth, service and maintenance prices are low due to low labour costs and efficient management. Fifth, there are no congestion charges.

Now if you are a home owner, what about the other costs of living in Dubai?

Need to get your garden landscaped, and to employ a gardener? Expect to pay around $3,000 upwards inclusive of labour and materials for landscaping, and then $80 a month for a daily gardener.

Maid service required? Maids cost from $4 an hour and a live-in maid will expect not more than $400 a month plus her $1,650 annual sponsorship fee. This can make having small children a pleasure rather than one of life's rites of passage.

Perhaps you would like to eat out in a hotel restaurant? Recent guests tell me this is around 50% of the current cost of eating out in London. Supermarket bills seem on a par with European levels these days.

However, if you need to call out an electrician there is a big difference. In London the BBC has been paying $100 to change a light bulb, according to a recent internal memo leak, while in Dubai $15 would be considered expensive.

The same low-cost labour is handy if you want to decorate your house or install a gazebo. Note that 'Do-It-Yourself' is not very popular in Dubai.

But what about paying local council tax or community charges? There are presently no taxes on home owners, but the community service charge on an Emaar villa is presently $163 per month; for this you get an efficient dustbin service, maintenance of lakes, lawns and other community facilities such as swimming pools, and 24-hour security.

Now does this not all add up to a pretty good life at a very modest cost? These are certainly living costs that would be the envy of anyone in London, Hong Kong or Singapore. Dubai residents should realize how lucky they are, and the traffic problems are not yet remotely on the same scale as in most major cities.

Ameinfo

Is Dubai Property in For A Long Hot Summer?

United Arab Emirates: Sunday, April 24 - 2005 at 16:38
Estate agents in Dubai report that the re-sale market has sparked back to life after several dormant months. Possibly the sharp increases in local rental costs are forcing potential buyers to reconsider, and this is still the best reason to take the plunge for any long term Dubai resident.

If you are renting a villa in Dubai, how much rent did you pay last year? $32,000? How much will you be paying this year? $45,000?

Spare a thought for one-bedroom apartment tenants in The Greens. They paid around $11,000 last year and this year $16,000 is the going rate for annual rent.

One way to fix your accommodation cost is simply to buy in Dubai. Hopefully in time your salary will move higher and your property valuation will also rise. What is the downside risk?

First, interest rates may increase although long-term US interest rates are not likely to vary very much from present levels. Second, you could want to move abroad, but then you could take advantage of the high rental costs of Dubai by renting out your property.

Or the market could collapse. But how much would you actually loose then? If you kept your property, rather than selling it at a cheap price, then you would not loose anything as you would just wait for the price to recover in due course.

You would, of course stand to loose even more if you continue to rent - and that loss is guaranteed. In the villa example given above, with rental inflation, we are talking about a guaranteed $300,000 thrown out of the window over five years.

On the one-bedroom apartment in The Greens renting will cost you about $120,000 in lost savings. Unless you are an eccentric millionaire, that is a lot of money.

For buying a house is somewhat akin to a savings policy and rolling up your mortgage payments into an account for a rainy day. If you carry on renting you can be sure of one thing, you will have nothing after years of paying high rents except your happy memories!

This is an investment nightmare, and those who are sitting on the sidelines in Dubai do seem to have started to wake up. Rental increases have been a nasty alarm clock, and this is just the start. For the UAE is a rapidly growing, booming economy and the pressure on existing accommodation is becoming acute.

The pain and anguish of those who have already missed out on the first three years of freehold Dubai property will be nothing compared with the abject despair that they will suffer in the next three years or so.

For the re-sale market is only really just beginning to get going in this city, and the forces of supply and demand could take prices much higher before the inevitable market correction. That means higher rental costs as well as higher house prices.

Ameinfo.com