The online registration of tenancy contracts, which was introduced late last year by the real estate management authorities in Dubai, has ruffled many feathers among the real estate agencies. The online registration was introduced in order to help the real estate management authorities develop a map of average rents across different areas of Dubai. Real estate authorities are being accused of “throwing brokers into the water” by implementing the regulation, which accompanies the new rental index. I don’t know why Real Estate Regulatory Authority (Rera) is doing this,” wondered Jahangir Ahmad, administration manager of Geometrics Real Estate, in Dubai. If they want to clean up the market, why don’t they just crack down on the unlicensed brokers? We only want to focus on brokerage rather than property management, so we only have a licence for brokerage. They are throwing brokers in the water. Ahmad said he doubted that many owners were registering the properties online directly. The rules for registration mean that owners have to pay Dh2,000 and attend a full day of training to be certified to register the contracts online. Many of the owners are based in America or Pakistan. They won’t want to fly in for a day just to do this. Even if they live here, I’m sure they wouldn’t want to get tied down with this. If they want to hire a property management company than they will have to pay sky-high fees, he insisted.
The rules for registration of the properties online mean that a large number of real estate companies have been cut out of the process. On Wednesday the first part of this index was released for commercial properties. In two weeks a separate index for residential properties will be released. Many companies only have a brokerage licence from Rera, but registration can only be done by owners, or companies which hold a property management licence. However, one property investor Rashid Ahmad, said that the scheme was a good idea. “I think it will be very popular with owners. We may see up to 90 per cent of owners registering the contracts themselves. It will cut down on their expenses. Despite that, Rashid Ahmad said that he didn’t have to go through the same process himself as he had sold all of his Dubai property two months ago when prices began sliding. No one from Rera was available for comment on the index. Officials’ phones were swicthed off. Meanwhile, the announcement that the residential index would be ready in two weeks has been met by surprise from some industry figures, given that in December Rera said that the index would not be ready until 60 per cent of properties were registered.
Sunday, January 25, 2009
Sorouh To Build Affordable Housing Project In Abu Dhabi
Sorouh Real Estate, Abu Dhabi's second-biggest property developer by market value, is planning an 'affordable housing' project in the emirate to tap into the underserved market in the emirate. Gurjit Singh, Sorouh's chief property development officer, told Bloomberg said the plan 'is currently on the company's drawing board'. Sorouh has more than $13bn of projects under way in the emirate.
Rental Price Index Brings Transparency, Stability
The long-awaited rental index launched by Dubai’s Real Estate Regulatory Agency on Wednesday, is expected to help rationalise and stabilise emirate’s commercial and residential property market that has been witnessing a unbridled escalation in rental prices over the past four years, businessmen and tenants said. The index, the first of its kind for the region, has also been welcomed as a measure to help discourage the practice of indiscriminate rental hikes resorted to by some landlords while providing both tenants and landlords a parameter to judge the rental price band for a particular unit. Praising the RERA move which is part of a package of regulations it plans to unveil in the coming days to stabilise the real estate sector, commercial and residential property tenants said the index would bring more transparency and confidence to the rental market. Although it is primarily designed as a guideline to calculate rental prices for a range of properties across the city, the index will put an end to unjust pricing and help reduce the number of complaints lodged with the rent committee over rent hikes, they said. However, quite a few of the respondents from among a cross section of residents contacted by Khaleej Times were sceptical about the effectiveness of the whole exercise in regulating the rental market as the index was designed for guidance and will not be a regulation” in the words of Eng. Marwan bin Ghalita, CEO of RERA. Some even voiced concern that landlords might use the index to justify steep rent increases if the property in question was below the new rental band. As the index is not legally binding there will be room for negotiation beyond the parameters set by the index. “With a minimum and a maximum limit specified for each type of property, market forces will still apply,” analysts said. By enhancing transparency in the market, the index will help investors to have a solid idea of what rent their investment should be bringing in. The index will evaluate various types of properties based on a spate of yardsticks, giving each property points for various attributes such as building facilities, near-by retail outlets, age and condition of building.
Dubai House Prices Fell 8pc In Q4
A new report shows home prices in fast-growing Dubai tumbled 8 per cent in the last three months from the previous quarter, the strongest evidence yet that the city-state’s property boom has run out of steam. Colliers International, the real estate consultancy that issued the report on Tuesday, said the decline is the first it has seen in its two years of tracking prices. The firm’s regional director described the drop as likely the first the boomtown has witnessed since it began allowing foreigners to buy property in 2002. That decision is credited with helping turn this one-time sleepy desert village into a metropolis packed with new skyscrapers and fancy seaside mansions.
Colliers blamed the slide on tightening liquidity and investor sentiment that has grown increasingly negative in recent months. The firm expects prices will continue to decline at least through the first three months of this year. Nobody is expecting a recovery in the first quarter. Everybody is expecting a decline,” Regional Director Ian Albert said in an interview. It’s not all bad, at least for current homeowners: Average prices remain 59 per cent higher year-over-year. Still, Colliers said its price index has already slipped to levels not seen since about April 2008. The drop in prices is not a complete surprise. Real estate agents have been sharing stories since autumn of panicked property owners looking to sell. Many banks have tightened lending standards because of fear of defaults and a lack of cash.
Meanwhile, a number of property developers and construction companies, among the emirate’s biggest employers, have laid off thousands of workers in recent months. Reliable official real estate values are hard to come by, however. Property buyers first feared the good days might be over in November when HSBC PLC reported the value of homes on the secondary market dipped month-to-month. Colliers’ numbers, compiled with the help of five banks active in the market, appear to be the first quarterly figures available. Albert said the latest data suggest Dubai is moving beyond its reputation as a speculators’ market where buyers would snatch up high-end property with little money down and then flip it in a matter of days. The market here is changing. The speculative market has fallen away,” he said.”It’s the first time Dubai’s entered a mature property cycle ... Now you’ve got to take a longer term view.Source: Khaleej Time
Colliers blamed the slide on tightening liquidity and investor sentiment that has grown increasingly negative in recent months. The firm expects prices will continue to decline at least through the first three months of this year. Nobody is expecting a recovery in the first quarter. Everybody is expecting a decline,” Regional Director Ian Albert said in an interview. It’s not all bad, at least for current homeowners: Average prices remain 59 per cent higher year-over-year. Still, Colliers said its price index has already slipped to levels not seen since about April 2008. The drop in prices is not a complete surprise. Real estate agents have been sharing stories since autumn of panicked property owners looking to sell. Many banks have tightened lending standards because of fear of defaults and a lack of cash.
Meanwhile, a number of property developers and construction companies, among the emirate’s biggest employers, have laid off thousands of workers in recent months. Reliable official real estate values are hard to come by, however. Property buyers first feared the good days might be over in November when HSBC PLC reported the value of homes on the secondary market dipped month-to-month. Colliers’ numbers, compiled with the help of five banks active in the market, appear to be the first quarterly figures available. Albert said the latest data suggest Dubai is moving beyond its reputation as a speculators’ market where buyers would snatch up high-end property with little money down and then flip it in a matter of days. The market here is changing. The speculative market has fallen away,” he said.”It’s the first time Dubai’s entered a mature property cycle ... Now you’ve got to take a longer term view.Source: Khaleej Time
Residents Complain Of Abnormal Hikes
Even as speculation is running high that the economic slump will have a calming effect on property rents in Dubai, some residents were in for a surprise when they got their contract renewal notices for this year. Rents were increased by more than 100 per cent! Tenants said the exorbitant rent hike in the wake of the current economic crisis came as a shock to them. "Everyone is talking about rents coming down in Dubai and we have been slapped with a rent increase of about 100 per cent said a resident of Ghusais. According to him, the rent for his one-bedroom apartment in Al Twar had gone up from Dh25,000 to Dh45,000 this mont. We have been living in this apartment for 20 years and every year the real estate company used to increase the rents by 5-7 per cent. But this 100 per cent increase is an absolute violation of rent laws in Dubai," said the tenant who did not want to be named.
Another tenant of the same building said he was planning to take the issue to the rent committee. "We are not looking for a new place. We have no issues if the landlord increases the rent as per the regulations. But the proposed increase is against all logic, said the tenant. Mohammad Ishaq, a tenant of a building in Bur Dubai said his landlord had also proposed a Dh20,000 increase this year. My contract is due for renewal in February and the landlord has increased the rent from Dh50,000 to Dh70,000. His argument is that the five per cent rent cap was applicable only until last year," said Ishaq, an employee of a private company. Prasad and his family have also been slapped with an increase of more than 30 per cent for their two-bedroom apartment in Al Nahda. Everyone is talking about rents falling in Dubai. Companies are cutting down benefits and everyone is feeling financially insecure. I am not in a position to spend more on rents, complained Prasad, a sales manager working in Jebel Ali. Responding to complaints of rent increases in one of their buildings, Saif Ahmad, the property manager of Nasser Lootah Real Estate, said, they had increased rents in keeping with the current market rate. There is a disparity in rents among tenants who live in the same building. People who have been living there for the last 10 or 15 years are paying as little as Dh20,000 to 25,000, while the new tenants are paying Dh45,000 to 60,000," said Saif. Commenting on the five per cent rent cap in Dubai, Ahmad argued that the rent committee permitted an increase in rent so long as it is in keeping with existing market rates.
Another tenant of the same building said he was planning to take the issue to the rent committee. "We are not looking for a new place. We have no issues if the landlord increases the rent as per the regulations. But the proposed increase is against all logic, said the tenant. Mohammad Ishaq, a tenant of a building in Bur Dubai said his landlord had also proposed a Dh20,000 increase this year. My contract is due for renewal in February and the landlord has increased the rent from Dh50,000 to Dh70,000. His argument is that the five per cent rent cap was applicable only until last year," said Ishaq, an employee of a private company. Prasad and his family have also been slapped with an increase of more than 30 per cent for their two-bedroom apartment in Al Nahda. Everyone is talking about rents falling in Dubai. Companies are cutting down benefits and everyone is feeling financially insecure. I am not in a position to spend more on rents, complained Prasad, a sales manager working in Jebel Ali. Responding to complaints of rent increases in one of their buildings, Saif Ahmad, the property manager of Nasser Lootah Real Estate, said, they had increased rents in keeping with the current market rate. There is a disparity in rents among tenants who live in the same building. People who have been living there for the last 10 or 15 years are paying as little as Dh20,000 to 25,000, while the new tenants are paying Dh45,000 to 60,000," said Saif. Commenting on the five per cent rent cap in Dubai, Ahmad argued that the rent committee permitted an increase in rent so long as it is in keeping with existing market rates.
Deyaar Plans To Acquire Assets In India And Turkey
Deyaar Real Estate has set up a division to acquire distressed assets in countries such as Turkey and India with the aim of expanding its land bank, its chief executive said on Thursday. The new department will look at buying distressed assets across the globe with India and Turkey being likely markets,” Markus Giebel was quoted as saying in a report. We intend to add land bank to our portfolio through this acquisition drive. Giebel could not immediately be reached to confirm the remarks. Giebel told reporters on Wednesday the Dubai real estate company had put all of its unsold projects on hold due to global financial turmoil, but still expected to post record profits in the fourth quarter.
Damac Properties has announced the launch of 'XL Tower', a modern, elegant commercial tower, located at Dubai's Business Bay.The tower, which has reached Podium level 3, has been in records for utilizing maximum concrete pour ever, in the company's history, when about 5,500 cubic meters of concrete was poured in less than 25 hours.Covering 153,000 square feet of space and with 8,700 square feet of retail space at the ground level, including shopping arcade, and covered walkway and parking for staff and customers, the modern, the XL Tower is an apt business location.The XL Tower is equipped with all modern amenities such as hi-speed internet, 24-hour security cameras, swipe access, parking on 7 levels and 3 basements, swimming pool, gymnasium, aerobics room, outdoor jogging track, cafeteria, and health club.Speaking about the progress of the tower, CEO of Damac Properties, Peter Riddoch said that being an emerging and most sought-after district for freehold residential and commercial properties, all the 13 properties by Damac at Business Bay, have received commendable response.He revealed that CSHK Dubai Contracting (LLC), a group member of China State Construction Engineering (Hong Kong) Limited have been appointed as contractors for XL Tower.So far, about 120 nationalities have purchased properties from Damac Properties, and the property developer has provided good support services. The company offers solutions through its vast regional network with offices location in UAE, Saudi Arabia, Kuwait, Qatar, Iraq, Jordan, Egypt, UK and Lebanon.
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