Weekly Dubai real estate news digest. Issue 76

Investor confidence on rise 
Welcome to the seventy-sixth issue of Market Insight, your weekly guide to what's happening in the Dubai real estate market.
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MARKET INSIGHT. Weekly guide to Dubai's property scene
Issue 76 |  December 14, 2014

Investor confidence on rise 

Over the past year, there have been countless signs of Dubai's real estate recovery, whether it be skyrocketing rents, new developments or the re-launching of old projects. However, the most telling sign of all has been the ever-increasing investor confidence. 

In Dubai, it's clear that expats are now taking a serious look at Dubai property as a source of investment as housing rents and prices continue to increase. In fact, Dubai Land Department statistics reveal that Indian investors spent more than AED10.5 billion in the first half of 2014 while Britons spent another AED5.8 billion in the emirate. 

The rising confidence in the market can clearly be seen in what's happening in Dubai's financial market. According to Essa Kazim, chairman, Dubai Financial Market, "The accelerating pace of IPOs and listings on DFM over the past few weeks reflects the sound fundamentals of our economy's various sectors as well as investors' profound confidence in the macro economic outlook and the performance of companies. Additionally, it underlies issuers' confidence towardsDFM as a leading and efficient platform for companies and investors from the UAE and beyond, due to its ample infrastructure, and world-class services."

Another sign of increased confidence in the real estate market is the fact that developers are launching a range of new mega-projects. On Tuesday, five new projects worth AED3billion were announced - with four being in Dubai while one was launched in Fujairah. 

Omniyat Group, a Dubai developer, broke ground on the AED600 million 'Anwa' – its first project - in Dubai Maritime City with the company chairman planning to double its investment portfolio to AED24 billion from AED12 billion in the next five years. 

Meanwhile, Al Habtoor Group, one of Dubai’s largest conglomerates, announced three new projects worth over AED2 billion. “Work is already underway for the three developments – AED993 million Habtoor Polo Resort & Club and a combined AED1.02 billion for Metropolitan Sheikh Zayed Road and Oasis Villas,” Khalaf Ahmad Al Habtoor, founder and chairman of the Group, said.

Market Insight is aimed at examining the emirate's dynamic market and forecasting industry trends. It is clear that Dubai's recovery is being taken seriously by all those involved, whether it be the end-users, developers or investors.
“Real estate is a long term investment and you need to focus on the fundamental," said Omniyat Group’s Executive Chairman Mahdi Amjad. "I think Dubai has demonstrated in very good times, in difficult times and again in very good times that the fundamentals of Dubai are very strong.” 


Pashma Manglani


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Expats home in on UAE property

With housing rents and prices in the UAE continuing to increase many expatriates are considering taking the plunge and buying a home.
Dubai Land Department statistics revealed that Indian investors spent more than AED10.5 billion during the first half of 2014 while Britons spent another AED5.8bn in the emirate.

However, the legality of owning property in Dubai is something that many expats still don't fully understand. “In terms of the UAE laws, there is often a misunderstanding of the word ‘freehold’,” says Brent Baldwin, a partner at law firm Hadef & Partners. “Unlike some countries, the word doesn’t necessarily mean ownership of land in perpetuity as you might expect it to in the UK for example. Instead it can mean different things in different emirates so potential buyers really need to be very aware of what ownership rights they are purchasing.”


Read more on The National

5 projects worth AED3b launched in one day

Five new projects worth AED3 billion were launched in the UAE on Tuesday, indicating the growing confidence of the industry and investors in the country’s real estate market. 

Four of the projects were launched in Dubai, while one was unveiled in Fujairah.

Omniyat Group, a Dubai developer, broke ground on AED600 million 'Anwa' – its first project - in Dubai Maritime City.  Meanwhile, Al Habtoor Group, one of Dubai’s largest conglomerates, announced three new projects worth over AED2 billion. Al Taif Investment, a joint venture between Dubai Investments and Fujairah Investment Establishment, the investment arm of Fujairah Government, launched the AED400 million Fujairah Business Centre project.


Read more on Emirates 24/7

IPO tests investor confidence; DFM index slides

The AED2.5 billion IPO of Dubai Parks and Resorts will test investor confidence as the emirate's benchmark index fell into bear territory for the second time this year.

Dubai Parks yesterday announced big levels of oversubscription for its offering, with some of the most prestigious investors in the region queuing for shares in the company.

“We have had a great reaction to our IPO in which we strategically retained a specific tranche for retail investors so that they received a favourable and higher allocation, ensuring that more people could share in the growth of Dubai Parks,” said Raed Al Nuaimi, the chief executive of Dubai Parks.


Read more on The National

Maritime City, Dubai's newest high-rise destination

Dubai will have a new destination for high-rise projects by the sea with the revised master plan for Dubai Maritime City (DMC) in the final stages of the approval process.

The first of the towers — the 48-storey ‘Anwa’ from Omniyat Properties — goes on sale Wednesday with prices starting from AED1,800  a square foot. 

The project is now split into three phases, with the first two making headway on getting the basic infrastructure and access roads in place. The timing for the launch of the third phase will be confirmed later, according to a top official. The master plan would have scope for more than 50 mixed-use projects, an extensive retail component, hotels and green zones.


Read more on Gulf News

House prices fall by over 5%

Dubai's real estate market recorded its first quarterly house price decline in four years, with prices falling more than five percent between June and September, Knight Frank said on Monday.

The Knight Frank Global House Price Index showed property prices in the emirate slumped 5.2% in the three-month period but were still up by 12.5% compared to Q3 2013. 

Knight Frank said the current mismatch between demand and supply is behind the fall. "Residential sales have fallen sharply in recent months and there is a steady stream of new schemes reaching completion, which in turn is exerting downward pressure on prices," the real estate consultancy said in a report.

Read more on Arabian Business

Bank introduces property price index

Dubai property prices have increased this year compared to 2013, but often property sellers are not aware of the current market valuation of their properties.

However, Mashreq, a Dubai-based bank, has now launched a property price index, which instantaneously gives you an indicate market valuation for your property. 

The index may, in fact, can give residents a heads up on the expected pricing for their listing. 

According to the Mashreq price index, a 102 square metre apartment in Burj Khalifa in Downtown Dubai will currently fetch AED4.1 million. Online listings put the price in the range of between AED4.5 million and AED5 million. Similarly, a 100 square metre apartment in Jumeirah Lakes Towers is valued at AED1.1 million. Online listings put the prices between AED1.5 million and AED1.8 million.

Mashreq does clarify that the current market valuation is an “indicative market valuation of the property”, which is based on its property price indexing.

Read more on Emirates 24/7

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