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Have speculators become landlords as capital gains ebb in Dubai?

August 2, 2017

Have speculators become landlords as capital gains ebb in Dubai? In Propertyfinder's recent 2017 Trends Report, one of our most respected brokers highlighted a new trend: the return of "shadow inventory" to Dubai's residential rental sector. These are units that buyers had long keep vacant as they sought to benefit solely from capital appreciation, but with prices falling for the past three years, some are now putting their units up for rent. These additional homes are adding to the supply here and are one of the reasons rents have dropped more than sale prices in recent times. JLL reported that a further 25,000 residential units are scheduled to be delivered in 2017 which...

How an investor can ride the Dubai property cycle

August 2, 2017

How an investor can ride the Dubai property cycle Investment. Property. Real estate. Timing. Vocabulary that is eminent in Dubai, and given the expanse of widespread analysis about the real estate market at the moment, there is need to deliberate on the significant phases that Dubai's realty market is going through. Property markets move in cycles, more or less as regular as clockwork. A property cycle is defined as a series of recurring happenings that are mirrored in demographic, economic and sentimental dynamics which have an effect on supply and demand in the property market. Therefore, property values may increase due to robust market growth, stabilise or may even decl...

Dubai homes: Room to grow

August 2, 2017

Dubai homes: Room to grow More residential supply is always welcome news. This translates into more choice for tenants and, consequently, lower rents. Property consultants Cavendish Maxwell estimate 30,402 homes to be completed in Dubai by the end of 2017. The break-up is 24,259 apartments, 3,778 villas and 2,365 townhouses, according to information obtained from developers, consultancies and sub-contractors. However, keep in mind that the materialisation rate is much lower (estimated at about 50 to 60 per cent) due to construction delays for various reasons and developers phasing out the delivery of units to avoid flooding the market. "We expect to see delays from devel...

Dubai sees 16.8% increase in real estate transaction values in H1 2017

August 2, 2017

Dubai sees 16.8% increase in real estate transaction values in H1 2017 Dubai saw a 16.8 per cent increase in the total value of real estate transactions conducted in the emirate in the first half of 2017 compared to the same period last year, according to Dubai Land Department (DLD) The figures for the first six months of 2017 will be seen as a sign of market recovery for property owners and developers, which have endured more than a year of stagnant or declining rental and sales rates. The value of transactions for the first half totalled Dhs132bn ($35.9bn) compared to Dhs113bn ($30.7bn) in the first half of 2016. This was also 2.3 per cent more than the Dhs129bn ($35.1...

Despite drop, Dubai rents give investors good yields

July 23, 2017

Despite drop, Dubai rents give investors good yields Expect further rent drops during the summer. However, those of you living in central locations are likely to see rents stabilising by next year while those in secondary locations can see prices softening further. This is as per a market report issued by real estate consultancy Core Savills. Rents in Dubai continued to soften across the board in the second quarter, with only one exception in Dubailand, possibly due to low entry level rents. "Tenants are increasingly conscious of current market conditions and many have successfully renegotiated contracts while others have shifted homes, either upgrading to a better unit at...

Rent controls are a waste of society's time and resources

July 23, 2017

Rent controls are a waste of society's time and resources Rent controls are a policy favoured by many governments, including those of the Arabian Gulf countries, with the goal of helping low-income families access affordable housing. In our last article, we explained why rent controls create housing shortages and diminish housing quality. In this article, we dig deeper into the damage caused by rent controls, highlighting how they waste tenants’ valuable time and resources. If rent controls create shortages, how is the shortage resolved? Who gets lucky and who does not? When price controls are implemented in their strictest, purest form, consumers enter a rationing qu...

Off-plan boom hurting sellers of completed Dubai homes

July 23, 2017

Off-plan boom hurting sellers of completed Dubai homes Dubai’s burgeoning off-plan sales market is having a ‘detrimental effect’ on prices of completed homes in certain parts of the city, says a new report from Core Savills.  The consultancy's latest Dubai Residential Market Update states that homeowners in areas such as Downtown Dubai and Dubai Marina are competing for the same pool of investors as developers launching new schemes, with the latter offering “highly competitive and attractive payment plans”, often  for properties that are more competitively priced.  “We remain watchful over growing off-plan sales and lucrative payment plans, which continue to undercut bot...

GCC real estate eyes return to form

July 23, 2017

GCC real estate eyes return to form It’s fair to say that the past year may have been one to forget for many involved in the Gulf region’s real estate market. Austerity measures, redundancies and reduced economic sentiment linked to the falling oil price saw demand in many markets diminish over the last 12 months with much of the pain reflected in declining sale prices and rental rates. “Across the Gulf, and across most real estate segments, activity and performance over the past year have either slowed down in growth, stagnated, or decreased,” notes Bruno Wehbe, principal with PwC unit Strategy&. The impact can be seen across the Gulf’s key property markets. In Saudi...

The top performing Dubai district for rents might surprise you

July 23, 2017

The top performing Dubai district for rents might surprise you Dubai’s Jumeirah Lake Towers, long seen as the less desirable cousin of neighbouring Dubai Marina, is the city’s top performing area for apartment rental values, according to a new report.   Propertyfinder Group’s UAE Real Estate Trends 2017 report showed that Jumeirah Lake Towers – more widely known as JLT – was found to be the only neighbourhood in which apartment rental values increased in the six months to March 31. The 1 percent rise compared with a near 1 percent drop in nearby Dubai Marina and Jumeirah Beach Residence (JBR), while Downtown Dubai and Palm Jumeirah tumbled 4.7 percent and 5.8 percent resp...

Tenants in charge as Dubai landlords 'becoming more generous'

July 16, 2017

Tenants in charge as Dubai landlords 'becoming more generous' Dubai’s residential market witnessed a very minor contraction during the second quarter of 2017, with both sales and rental rates seeing modest declines, real estate advisors CBRE has said. Its Q2 2017 Dubai MarketView said this is driving the progression of a tenant-led market, with landlords becoming more generous in their negotiations with prospective new tenants. However, tenants on existing leases are generally not finding the same level of flexibility from landlords, although rental increases are becoming less prevalent, it noted. “The sales market has witnessed an improvement in transaction numbers d...