Long-Term Dubai Investors Still Gain From Property Investments in Dubai

According to the owner of a Dubai based brokerage firm, the investors who had purchased real estate in Dubai even less than two years ago, still stand to earn profit despite the current low prices.

“People who are suffering the most are those who purchased properties last year on mortgage, as the prices of properties then were very high and mortgage rates were also high. But, people who purchased before 2007 also have not lost. Even if they sell, they still get to make a profit,” said the CEO of Leo Sterling, Laura Martorano.

The recent Dubai World restructuring discussions have not really affected the property prices in Dubai, agreed Martorano and also added that due to the competition, the prices in the ready market are not prone to change.

She also added, “In a ready market, about 60 percent of purchases are cash purchases. Therefore, people may not necessarily be so desperate as opposed to 40 percent, who have bank loans and mortgages”

The transactions in the real estate in Dubai have gone down in November as per the official data. The toll of property sales had fallen by 11% from 208 in October to 186 in November and the value of the deals had fallen by 47% from that of Dhs1.84bn to Dhs.970mn in the same period.

The data by Dubai Land Department depicted that the sales of the villas have gone high by 24% from 88 to 109. However, there was a decline of 41% in value which went down from Dhs.290mn to Dhs.170mn in November.

The positive indicators were shown in the month of October with average monthly market index posting 11.25% rise whereas the trade increased by 10% in volume and 9% in value as per Dubai certificates of origin.

Despite the negative economic indicators, Martorano is confident that Dubai will continue to hold a bright future.

Brainstorming Week Inspires Entrepreneurs in Dubai

The property investors who are thinking of buying and investing in Dubai may find some innovative options in Dubai real estate market in future due to the new cohort of developers.

The first time in Dubai Global Entrepreneurship Week has been hosted by Mohammed Bin Rashid Establishment for SME Development from 16^th to 22^nd November 2009.

The brainstorming events of the week brought together the young people from different parts of the region. The students also got the opportunity to investigate the creative and innovative ideas. Moreover, the week added an inspiration though talks and debates.

The initiative aims at creating some of the best entrepreneurs of the years to come. These prospects could help in creating some deep-seated new designers, architects and construction experts. Consequently, this may enhance the region’s property industry and make buying in Dubai even more exciting in future.
"The Global Entrepreneurship Week highlights our commitment to incubating young talent and supporting their creative ideas, and thus help establish leading projects in the future," His Excellency Abdul Baset Al Janahi, chief executive of the Mohammed Bin Rashid Establishment for SME Development said.

A major conference was also held with the purpose to consider the future of the region’s construction industry.

It was confirmed by the two-day event that the real estate in Dubai sustains to be a crucial part of the region’s economy and the construction industry. It also indicated that the industry is surely committed and ensures the region’s growth.

Government and partner organizations based throughout the globe hosted events like invention competition and local entrepreneurship summits. These were designed to inspire, unite, mentor and engage the next generation of entrepreneurs.

The growing movement was relished by millions of young people from all around the world with the aim to think big, turn ideas into reality and make their mark.

IFA Hotels and Resorts Launches Condominiums

The leading foreign investor on the Palm Jumeirah, IFA Hotels and Resorts has announced the launch of its second hotel condominium ownership merchandise in the Middle East.

The new offering is located within the five-star Fairmount Palm Jumeirah hotel in Dubai and is certainly of a particular interest for investors who are aspiring to branch out their property portfolio. The venture is a unique real estate selection that unites both the business of capital growth potential as well as guaranteed rental returns accompanied with the pleasure of a hassle-free vacation property.

The concept also permits initial investors to purchase a fully-furnished, five-star hotel room within a rental pool system. This guarantees annual returns of 10 percent per year for the initial five years underwritten by IFA Hotels and Resorts during the hotel stabilization phase and a guaranteed buy back premium of 10 percent after five years from the hotel’s opening.

Werner Burger, President and COO of IFA HR stated, “Worldwide, hotel condominiums are one of the fastest growing sectors of the real estate industry. As the first company to introduce the concept of hotel condominium ownership to the Middle East, we have seen its appeal continue to grow, particularly in markets like Dubai where hotel occupancy is still one of the highest in the world,”

Dubai Villa Stock Welcomes the New Handovers

According to Dubai Properties Group, the leader in Dubai real estate market, the handover of entities in The Villa and Al Waha Villas is expected to take place in December.

Al Waha is a fully sold-out development with 260 villas out of which 50 are three bedrooms and 50 are four bedrooms. One can choose from the rooftop view or the garden level preference if looking for two bedroom location.

Apartments for lease at 558 Community
Of the 558 Community, 134 are of the four-bedroom type, 102 are three-bedroom and 180 are two-bedroom entities.. There are also 48 two-bedroom and 96 three-bedroom apartments to accommodate 558 residences. All villas are spacious and have an upstairs sitting room to boot.

The 558 Community also houses a block of three-storey apartments in its centre and features a large pool. These residences are being leased for Dubai Properties by Salwan Property Management and are not for sale. “We will offer our services to third parties in Al Waha and are managing phases 1 and 2 of The Villa project,” says Saeed Bushalat, CEO of Salwan Property Management. One- and two-year rental contracts are on offer, which come with the provision that there will be no value increases for the first two years.

Mirdif versus 558 community
Dubai Properties’ Shorooq community which includes 668 villas in Phase One, has 353 units ready for tenants to move into. According to Salwan, the rents for a two-bedroom villa here would amount to Dh170,000 compared with the 558 Community’s rates of Dh130,000 a year before summer.

However, after summer DPG stated that introductory promotional packages would be offered during the initial stage of leasing. This makes perfect sense as the market price for many areas in Dubai find themselves in a state of fluctuation this year.

“Mirdif and 558 Community are two totally different projects,” explains Saeed Bushalat of Salwan Property Management. “The unit sizes are bigger in Mirdif. Our rents correspond to the going market prices in the area. It is close to the centre of town and the shopping centers. The 558 Community has not got that yet.”

DPG also started handover of over 2,000 residential and commercial units at its Executive Towers in Business Bay in September. “Handover should be complete by the year-end. We have sold most units in the towers, but kept retail, hotel and some of the apartments to be leased by Salwan,” commented Khalid Al Malik, DPG Group’s CEO.

Price Index Cuts to Revive Investments in Dubai Property Sector

Earlier, Dubai property developers were reliant completely on off-plan sales in order to finance their future and other onging projects. At the time of property boom in Dubai, the demand for these off-plan properties was further promoted, however, the global crunch has made the finances extinct and the value of the off – plan property market virtually disappeared. This further leads to project cancellations and construction delays. As there were loan to value reductions and higher interest rates the disturbances in the real estate sector gets aggravated. Those developers who have good financial fundamentals could only carry their projects towards completion in this current situation.

In the current state, the prices for Dubai properties are quiet uneven and there are few takers for off-plan units. Moreover, the property sector is now dominated by the buyers there was an oversupply of units coupled with distress sales in order to raise liquidity for mortgage repayments are affecting sales price adversely. There are communities where distress sellers are disposing off properties. Currently foreign investor’s interest is attracted towards ready-to-move-in villas and apartments. Moreover, now the prices are being decided on the basis of quality of construction, the amenities to offer, accessibility and project location.

As per the market analysis done, there is still a strong demand in mid-level segments such as International City where prices have fallen by 25 to 30 percent. The prices have been corrected to realistic levels and the emirate has suddenly become a hot market of affordable properties. Moreover, these properties are not only affordable but also guarantees high returns in the long-term. According to the estimates the prices could continue to drop, whereas in Q4 it is expected to climb up again.