NEWS BRIEF 02 - AstecoBut the Dubai-based financial services company Arqaam Capital said that...

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RESEARCH DEPARTMENT

NEWS BRIEF 02 SUNDAY 10 January 2016





REAL ESTATE NEWS UAE

UAE HOMEOWNERS FEEL THE PINCH AS MORTGAGES RISE ON BACK OF FED RATE INCREASE

UAE HOMEOWNERS CAN PLAY IT SMART VIA MORTGAGE REFINANCING

DUBAI

DUBAI ENTREPRENEUR TAKES PROPERTY SELLING A STAGE FURTHER EMAAR HOTEL REVENUE TO BE HIT AFTER DUBAI FIRE AS DEVELOPER

APPOINTS CONTRACTOR TO RESTORE THE ADDRESS EMAAR SAYS ‘NO MATERIAL IMPACT’ ON COMPANY AFTER THE ADDRESS FIRE

RIYADH PROPERTY GROUP LAUNCHES MADA RESIDENCES PROJECT IN DUBAI

INSURANCE PREMIUMS IN FOCUS AFTER THE ADDRESS DOWNTOWN DUBAI FIRE

DUBAI STILL A RELATIVELY CHEAP PLACE TO BUILD, SAYS ARCADIS HAS THE FALL IN DUBAI PROPERTY PRICES COME TO AN END?

PROPERTY AGENTS BAIT DUBAI HOMEBUYERS WITH ‘DISTRESS’ DEALS PROPERTY TO SPROUT ALONG DUBAI CANAL

DUBAI RENTS DROP IN 2016 RERA INDEX DUBAI PROPERTIES BRINGS SMART BIKES TO BUSINESS BAY

WASL PROPERTIES LAUNCHES 'WASL DUET' IN KARAMA CONSTRUCTION COSTS REMAIN FAVOURABLE IN DUBAI

DUBAI LAND DEPARTMENT REPORTS DH267B REAL ESTATE TRANSACTIONS FOR 2015

MALL WITH ROOFTOP PARK COMING TO DUBAI CANAL

ABU DHABI

REACH FOR THE SKY AT DH16M REEM ISLAND PENTHOUSE

WHAT TO EXPECT FROM THE ABU DHABI PROPERTY MARKET IN 2016

OTHERS RENT, EATING OUT, GROCERIES: REAL COST OF LIVING THE DUBAI

LIFESTYLE





DUBAI ENTREPRENEUR TAKES

PROPERTY SELLING A STAGE FURTHER

SUNDAY 03 JANUARY 2016

Mathieu Nakkach was attending home viewings in the most exclusive areas of Dubai when he noticed something was badly wrong with the way many properties were being presented.

Some of the houses, which cost Dh30 million and up, were empty. A few had cockroaches on the floor, yellow grass on the lawn or unfilled pools. Many did not even have any electricity, leaving everyone who was looking around drenched in sweat.

“I was trying to imagine a guy with millions coming here with his wife to buy their new house and this was what they were facing,” says Mr Nakkach, 38, who is half Lebanese and half French from Lebanon.

“So I did a little research and I found something called home staging.”

Home staging is the act of preparing and showcasing residential or commercial property for sale, according to the Real Estate Staging Association (Resa) in the United States.

Resa says, on average, staged homes in the US spend 77 per cent less time on the market. “Staging helps you to secure a contract more quickly,” says The Consumer’s Guide to Real

Estate Staging, produced by Resa.

There are no figures available for the UAE, and no association exists here, but the industry is developing and there are companies that rent out everything from furniture to candles, towels

and bed sheets for the purposes of home staging. Brokers expect the industry to grow over the next couple of years.

“Obviously, the market has softened and to make your property stand out more and to help it sell is only a positive,” says Leigh Borg, the sales director of Belleview Real Estate Broker in Dubai. “The amount of apartments and villas I have seen where the owner hasn’t even cleaned it properly, and you are trying to showcase that property. In this market you need to show

your property in the best light.”

To set up a home staging firm Mr Nakkach realised he would need to invest in a warehouse and fill it with furniture. While he did not have the funds, he did have an idea – to partner with

some of the largest showrooms in town, and showcase their furniture in the staged homes.

“The reality is Signature Stagers is a marketing company,” says Mr Nakkach. “I take their furniture and I use it to stage with, so we basically market their showrooms and we market

their stock and their brands, as well as market the homes we stage.”

Signature Stagers only stages homes worth $10 million or more, but the service is not cheap. It costs anywhere from Dh150,000 to Dh250,000 per home depending on the property. The





open house, which Mr Nakkach calls an “industry event”, that includes live entertainment and food, costs another Dh50,000 to Dh75,000.

It takes about five days to stage a home once contracting work such as painting is completed. The furniture suppliers design the rooms and the home remains “staged” for 90 days.

Mr Nakkach has staged six homes since the company started 18 months ago, the latest of which is a full-floor penthouse with an area of 14,000 square feet in Le Reve, a luxury 50-floor,

80-apartment tower in Dubai Marina. The company tied up with Verzun, a property brokerage and Nakkash Gallery, which supplied the furniture. The apartment had languished on the

market for three years when Signature Stagers took it on.

“It was furnished but the furniture was outdated and not matching. And there was wallpaper from 10 years ago with holes in it. The house hadn’t been lived in for three years, so you can imagine the state it was in,” says Mr Nakkach. “We stored everything, ripped off all the

wallpaper, repainted and furnished it. It went from an ageing house to a brand new designer home.”

The apartment received three offers at the open-house event held for the property in November, which included a DJ, self-playing piano and 3D virtual reality glasses experience. One of the offers was accepted and is now the subject of negotiations.

If the sale goes through it will be the quickest for a Signature Stagers home, a title currently held by a property in Emirates Hills. That had been on the market for 18 months when it was sold at the open house last summer for the asking price, just 30 days into the staging.

The least successful was an apartment in Dubai last November, which attracted an offer of

Dh45m, Dh5m less than the asking price. The offer was rejected at the time but the apartment later sold for Dh25m.

“People turn around and blame the stager [when it doesn’t sell] saying your service doesn’t work, but there are three factors to a successful sale,” says Mr Nakkach.

“One is a beautiful house. I take care of that. Then you need a good agent, obviously, and you need it to be properly priced. If these three are dancing to the same song, then that equals a successful sale and everybody is happy.”

Source: Emirates 24/7

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EMAAR HOTEL REVENUE TO BE HIT

AFTER DUBAI FIRE AS DEVELOPER

APPOINTS CONTRACTOR TO RESTORE

THE ADDRESS


Investors yesterday shrugged off worries over the long-term effect on Emaar Properties’ outlook from the fire that broke out at its Address Downtown Dubai hotel on New Year’s Eve.

Emaar’s share price pared losses in Dubai yesterday to end the session down 1.58 per cent, after slumping 4.4 per cent at the opening. It dragged down the Dubai Financial Market General Index 0.51 per cent on the day.

Authorities are still investigating the cause of the fire that engulfed the 63-storey tower. The hotel will be closed for an indefinite period. There were no fatalities.

Emaar’s shares recovered in late morning trade yesterday after Dubai’s biggest listed property developer said there would be “no material effect on the company” from the hotel fire because

“the building and risk of fire are covered by insurance”, in a statement to the exchange. The company didn’t quantify the financial impact on its hotel revenues following the closure of its luxury hotel.

But the Dubai-based financial services company Arqaam Capital said that Emaar’s hotel revenue is forecast to decline by 13 per cent this year, compared with last year, to Dh1.4 billion because of the closure. Based on the new forecasts Arqaam expects total group revenue

this year to rise by 29 per cent to Dh17.8bn compared to its previous estimate of a 31 per cent year-on-year increase in 2016. Arqaam is “assuming disrupted operations of 12 months … for

necessary refurbishment-rebuild works”.

Emaar said yesterday it had hired Dubai-based Dutco Group as the contractor to undertake restoration work on the 63-storey Address hotel “in record time”.

Emaar’s chairman, Mohamed Alabbar, said: “To achieve our timelines, we will leverage all our resources and our proven track record of delivering iconic projects. Every aspect of the

workflow will be clearly streamlined and we will deploy the latest technology tools to ensure that we meet our time frame.”

Sebastien Henin, the head of asset management at TNI, The National Investor, in Abu Dhabi, said that Emaar’s status as one of the blue chips of the market and its appeal to institutional investors should minimise any effect on its share price going forward. “The financial effect for





Emaar is pretty limited, so I think investors have understood that properly and that’s why we haven’t seen a kind of overreaction [in the stock market],” he said.

Emaar’s weighting accounts for 18.68 per cent of the Dubai Financial Market benchmark index.

Shareholders, speaking on the trading floor of the Dubai exchange yesterday, supported Mr Henin’s view.

“I don’t think [the fire] will affect the company’s profits,” said Abdulkarim Al Kassem, a Saudi national and an Emaar shareholder. “It is still a strong company and has strong revenues. It is

an attractive stock to buy based on its future earnings.”

Hussain Al Qatari, a Bahraini investor in Emaar, said it is “the best company in the market”.

He said: “It is a strong company and has excellent assets even if they incur losses [from the fire].”

There has been speculation in the past that Emaar’s hotel business, which also includes the Vida and Armani brands, could be the next to be spun off after the IPO of its malls unit in 2014.

However, any aspiration to list this unit, or expand the Address chain of hotels, may in the short term be affected, according to analysts.

“The effect will be reputational on how its hotel business evolves going forward because we know they have ambitions to list the hotel business,” said Muhammad Shabbir, the head of

equity funds and portfolios at Rasmala Investment Bank in Dubai. “It may be a short term negative effect on that.”

Emaar’s shares ended last year at Dh5.69, down 20 per cent since the start of the year and 45

per cent below their highs in autumn 2014, when the oil price slump began to weigh on many Dubai companies.

The group’s revenue from hotels in the first nine months of this year accounted for 12 per cent of total revenue.

Its third quarter net profit rose 31 per cent to Dh843 million as rising property sales overcame the wider real estate market malaise. The results missed analyst expectations, however.


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EMAAR SAYS ‘NO MATERIAL IMPACT’

ON COMPANY AFTER THE ADDRESS

FIRE


Emaar Properties said there would be ‘no material impact’ on the company following the fire at The Address Downtown in Dubai.

The blaze, which happened on New Year’s Eve just before the city’s firework display, engulfed the 63-storey luxury hotel and residential tower. The flames were extinguished on Saturday.

In a statement to the Dubai Financial Market this morning, Ayman Hamdy, Emaar’s general counsel, confirmed that the building was covered by insurance.

“The fire has been contained and the cause is being investigated by the company and the relevant authorities.

“The building and risk of fire are covered by insurance so there should be no material impact on the company as a result of this incident.”

Shares in Emaar, the Dubai Financial Market’s heaviest stock at 18.8 per cent, closed down 1.5 per cent at Dh5.60 per share as UAE markets opened for the first time in 2016.

The company’s chairman, Mohamed Alabbar, said yesterday that it intends to restore the building “to all its glory and even surpass the splendid architectural standards. Further timelines and plans will be shared as they are finalised.”

“We develop our projects to the highest standards of quality and as per international best practices,” he added.

• UPDATE: Emaar said it had hired Dubai-based Dutco Group as contractor to clear and restore the hotel.

The developer said in a statement released on Sunday afternoon that a team of international

consultants has already been mobilised by Dutco Group, who are on site and working “round-the-clock”.

It added that cleaning work has started with the mechanical, electrical and structural assessment of the building and restoration also underway.


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RIYADH PROPERTY GROUP LAUNCHES

MADA RESIDENCES PROJECT IN DUBAI

MONDAY 04 JANUARY 2016

Riyadh-based construction and property group Abdul Rahman Saad Al-Rashid & Sons has launched its first major property project in Dubai.

The group is to build a residential apartment block known as Mada Residences in Downtown Dubai containing 193 one-, two-, three- and four-bedroom units.

Al Rashid is a 59-year old enterprise best known for its contracting business, Rashid Trading &

Contracting Company, which employs more than 20,000 staff. The group also owns the 1.5 million-square foot Al Rashid Mega Mall in Medina and several residential property developments in Riyadh.

The Dubai project is being undertaken by Artar Real Estate Development – a division set up in 2014. Its chief executive, Sulaiman Abdulrahman Al Rashid, said: “Mada Residences is the company’s first premium residential offering in Dubai and boasts all the hallmarks of our

construction excellence that has made us such a force in Saudi Arabia.”

No start date, contract value or completion date for the project was given by the company.


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INSURANCE PREMIUMS IN FOCUS

AFTER THE ADDRESS DOWNTOWN

DUBAI FIRE

TUESDAY 05 JANUARY 2016

Insurers are set to review building premiums after the New Year’s Eve blaze at The Address Downtown Dubai.

The fire at the hotel was the latest in a string of building blazes in Dubai last year, including ones at The Torch Tower at Dubai Marina in February and the Regal office tower in Business Bay in November.

Mohammed Hesham, operations manager of Abu Dhabi-based Capital Shield Insurance Brokers, said that the impact on Emaar’s own premiums might not be significant as the

company owned thousands of buildings and could take a commercial decision to switch insurers if premiums rose by too much.

However, he believes that insurers will look more closely at the type of materials used on a building, and set higher premiums for those clad in aluminium composite panels.

“Insurance is a pool. We all pay into the pool, and whoever has a claim takes from this,” said Mr Hesham. “But let’s say you have more risk than me – you should pay more. If an insurer

notices that claims from BMW owners are higher than others, they will increase rates for all BMW cars. Here it is the same situation. If they notice that these types of buildings have more of a tendency for claims, then it will have an impact on the whole market.”

Michael Rafter, the executive vice president of general insurance at Oman Insurance Company, which insured the Torch Tower, said that given the quantum of loss faced from the Address Downtown fire, “it may impact property insurance premiums”.

He said: “But this would be specific to buildings with combustible cladding only, and it is not possible to predict how much [premiums will rise].”

Mr Rafter said that Oman Insurance Company had learnt from the Torch Tower fire that even a minimal amount of combustible material could lead to devastation. “It has made us more

cautious in our approach towards insuring buildings that utilise any kind of flammable cladding.”

Garry Taylor, the Mena managing director of the specialist broker Bowring Marsh, believes that

the impact of The Address Downtown fire on the market for building premiums will not be significant.





“In our opinion, a single loss incident represents a very small percentage of the market and only a dramatic shift in market capacity would shift premiums,” Mr Taylor said.

Alison Fenech, head of general insurance at Dubai-based Nexus Insurance Brokers, agreed, stating that premiums did not rise after other Dubai fires last year.

“We have seen more of an increase in awareness than premiums,” she said.

Ms Fenech said that although individual insurers may increase rates if they own more than one building, the market as a whole is not likely to be subject to rate rises as a result of this

incident in isolation.

She added that the frequency of fires was more important than a single, high-profile event. “If you have 10 fire incidents in a year amounting to Dh20 million, it is more likely to increase

premiums than one incident in a year amounting to Dh25m,” said Ms Fenech.

Sam Thakker, managing director of Earnest Insurance Brokers, said that although there may be a few “knee-jerk reactions” from insurers looking to capitalise on the incident, the fact that

it happened so late in the year meant that across-the-board premium increases were unlikely as most insurers had already set rates for 2016.


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DUBAI STILL A RELATIVELY CHEAP

PLACE TO BUILD, SAYS ARCADIS


Government and private sector clients have an opportunity to commission new buildings at bargain rates, according to Arcadis.

The company’s latest International Construction Costs 2016 report states that Dubai remains a relatively cheap place to build. It is ranked 18th worldwide in a list of 44 major cities, meaning it is less expensive than cities in Qatar (Doha is 12th) and Saudi Arabia (Jeddah, 16th).

Moreover, Ian Williamson, the head of the company’s Middle East buildings division, argued that the cost of building is likely to remain extremely competitive throughout this year.

“I think it’s a great year to buy if you’re a client,” said Mr Williamson. “It’s a shame there are issues on liquidity and funding because it’s a very good time to be doing capital investment.

“With the market being tighter, all contractors and consultants are fishing in a smaller pool for work right across Qatar, KSA and the UAE, which represents 90 per cent of most people’s business in the Middle East.”

The International Construction Costs report stated that the cost of building globally has generally been in decline over the past 12 months as a result of falling commodity prices. Crude oil, iron ore and nickel dropped in price by between 30 and 50 per cent last year, while

copper and aluminium have fallen by between 20 and 25 per cent.

This presents challenges for GCC markets, where declining oil revenues lead to constrained government budgets and lower infrastructure spending.

And although oil only makes up about 2 per cent of Dubai’s GDP, its role as the region’s business hub is affected by the fact that investment cash from oil-producing countries such as Russia and Iran also falls away.

The report added that the strong dollar (to which the dirham is pegged) has made tourism and property investment more expensive for key Asian investors.

Mr Williamson said that labour costs in Dubai are typically “60 per cent or less” than rates in London. Although materials prices can be 20 to 30 per cent higher as a result of import costs, the competitive market in the region means it is a good time to procure building work.

“With the market being tighter, contractors and consultants are fishing in a smaller pool for work right across Qatar, KSA and the UAE, which represents 90 per cent of most people’s business in the Middle East,” said Mr Williamson.

“I think with that tightening market, you’re starting to see highly competitive pricing put in. People are having to work to lower margins to maintain volumes.”





The city with the world’s highest building costs is New York, followed by London and then Hong Kong. Of the 44 cities in the Arcadis report, Taipei was the cheapest city in which to build,

followed by Bangalore and Bangkok.

A report published by Colliers in October stated that construction costs in the UAE had remained flat in 2015, with the lower price of steel offset by an increase in the cost of

aggregates, sand, glass and other materials.


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UAE HOMEOWNERS FEEL THE PINCH AS

MORTGAGES RISE ON BACK OF FED

RATE INCREASE

WEDNESDAY 06 JANUARY 2016

UAE homeowners have been hit by New Year mortgage rate increases as banks pass on rising interbank-borrowing costs.

HSBC Middle East raised its mortgage rate based on its Emirates Interbank Offered Rate (Eibor) by just under a quarter per cent from the start of the month. A spokeswoman confirmed that its variable rates had increased at the beginning of January in line with Eibor.

It comes hard on the heels of the first rate increase by the US Federal Reserve in almost a decade and an 11 per cent rise in interbank borrowing costs over the past month.

Other home lenders including Standard Chartered said they had raised repayments or were expecting to follow suit as rates start to tick up again for the first time in more than five years. That will be unwelcome to residents who are already feeling the pinch from higher consumer

prices in the past two years.

“It will be big for someone who has literally taken a mortgage that’s just right for his income level and can’t afford any more, not so big for someone who has millions in the bank,” said

Ambareen Musa, the chief executive and founder of Souqalmal.ae, a price comparison website.

“The mortgage market is not massive but it will have an effect on property owners, typically who have taken a variable mortgage quite a few years ago where the initial fixed rate period

has finished. It will affect them 100 per cent.”

Tightening liquidity in the banking sector has also placed upwards pressure on interest rates.

Most mortgages in the country are benchmarked to Eibor and homeowners have benefited from years of declining mortgages costs.

A bank will typically add 3 to 5 percentage points to Eibor to come up with the rate it offers

customers. As a result, most mortgages range between 4 and 7 per cent.

The rise in home loan rates will come as a blow to the property sector, which has been hit hard by the strong US dollar that has deterred investment from the euro zone and elsewhere.

The number of property sales in some parts of Dubai has fallen by more than 45 per cent since the most recent peak in 2013, the real estate information service Reidin said. The company

said that it had also noted an increase in the number of properties purchased with mortgages – a method of buying usually associated with owner-occupiers rather than landlords.





Source: The National

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REACH FOR THE SKY AT DH16M REEM

ISLAND PENTHOUSE

THURSDAY 07 JANUARY 2016

Abu Dhabi’s skyline has changed dramatically in recent years – most notably at Reem Island, where so many buildings are being erected that it looks like someone is attempting to create a forest made from glass and steel towers.

For lovers of the high life, one apartment on the market in Aldar Properties’ Shams Abu Dhabi scheme offers perhaps the best views over the entire city and the surrounding area, including

the mangroves, Saadiyat Island and Yas Island.

The unit straddles the 71st and 72nd floors of the 74-storey Sky Tower, which are the two highest residential floors. This six-bedroom, eight-bathroom unit has a double-height living

room with a massive window as its focal point. It is on the market for Dh16 million.

“A lot of clients ask for uninterrupted views,” says Joanna Tate, a senior sales agent at Crompton Partners, the estate agent marketing the property. “They don’t want another

building to block their views or have construction noise. There is no chance of either with this apartment.”

Although completed in 2011, the unit has never been lived in and has only been on the market

for the past three months, with the owner’s family opting to live in a villa instead of this apartment.

The apartment contains a large, fully integrated kitchen as well as a separate mini-kitchen and a bar kitchen. The six master bedrooms all have walk-in wardrobes, and there is also a

breakfast room, dining room, three reception rooms, a maid’s room and a pantry. In total, it has 8,713 square feet of space and comes with three parking spots in the building’s basement.

And although much of the surrounding area of Reem Island continues to resemble a giant construction site, the facilities at Sky Tower and its neighbouring 65-storey Sun Tower are so comprehensive that you do not need to leave the complex. It has three gyms, including a

women-only facility, exercise rooms, squash courts, two outdoor tennis courts and a multi-sports court. There are also three swimming pools – including a children’s pool – a play area, sun loungers and a juice bar.

The ground and first floor of the towers are also linked by the Boutik retail mall with a Waitrose supermarket, cafes, restaurants, a food court, banks and other stores. The building also offers ample visitor parking – a major plus for Abu Dhabi.

Q&A

Joanna Tate from estate agents Crompton Partners tells Michael Fahy about the appeal of high-rise living in Abu Dhabi





So, who would live in a house like this?

Someone who is all about status and prestige. Definitely someone who likes or has to entertain a lot, while wishing to retain their privacy for the rest of the time. A chief executive of a large

corporation, a hotshot lawyer or a diplomat of some kind. The unit has six bedrooms, though, so is suitable for an end user with a family.

What is so special about this apartment?

The real attraction is the 6.2 metre by 9.5 metre, double-height window that greets you as you walk through the door. You cannot fail to be impressed. It’s quite breathtaking – like being on top of the world.

Also, they say that kitchens and bathrooms sell a property. This apartment has got what I would call a real cook’s kitchen and a bathroom with a Jacuzzi to sip a beverage from while you gaze down at the mangroves. It’s fabulous.

But isn’t Reem Island still largely a building site?

Reem Island is definitely a work in progress, but eventually it will be home to 200,000 people. The good thing about this unit is that because it is on the top floor of the tallest tower on Reem Island, what you see is not what’s going on the ground level, but the far-reaching, uninterrupted views across the water to Saadiyat Island, Yas Island, Abu Dhabi city and over

the Grand Mosque district. You can see for miles, and a lot of it is natural habitat and water.


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WHAT TO EXPECT FROM THE ABU

DHABI PROPERTY MARKET IN 2016

FRIDAY 08 JANUARY 2016

The Abu Dhabi real estate sector was something of Dr Jekyll and Mr Hyde last year. Sales prices have been flat since the last quarter of 2014, but leasing failed to read the script and was up by as much as 7 per cent in some areas last year, according to JLL – although that is still much reduced from the pace in 2013 and 2014. What has caused this divergence, and

what will sales and leasing do this year?

On the supply side

When it comes to new units coming on to the Abu Dhabi market, the property pipeline is looking bare. Many new projects are planned, such as Mamsha on Saadiyat Island from

Tourism Development and Investment Company; Ansam, Mayan and West Yas on Yas Island from Aldar; and Al Hadeel on Raha Beach, also from Aldar. These are just a few examples –

but these projects will not come online until at least next year. Abu Dhabi’s large developers were badly stung by the 2008 crash and have lain dormant almost ever since, with only the serious rental spikes in 2014 prodding them out of their slumber and back to the construction

site. High-rise buildings have a lead time of up to four years, so the delay in restarting stalled projects or launching new ones has long-term effects. Most third-quarter 2015 reports are

saying that only 2 to 3 per cent will be added to the total housing stock per year over the next two to three years.

Demand stays strong

Demand for units in Abu Dhabi, at least on the leasing side, has remained strong, as according to most reports rents went up by 5 to 7 per cent last year. This rise was mostly because of the low supply coupled with an increasing population. Population predictions in such a fluid, immigrant-based economy are hard to come by, but according to the Statistics Centre Abu

Dhabi, the average annual population growth rate between 2005 and 2014 was 7.6 per cent. If this holds, then population will continue to outstrip housing supply and rents will continue to

rise – simply put, demand is greater than supply.

The oil effect

But what of the oil price slump? Will this affect population statistics? According to Monster.com, it seems it has not yet. Companies are still hiring even in the middle of what

would seem like reduced sentiment in the region. Abu Dhabi’s population is closely linked to government spending and jobs, so people will be looking closely at the emirate’s budget for this year. The federal budget was cut by a modest 1.1 per cent for the coming year, and

Dubai’s budget was increased by a whopping 12 per cent. The IMF said it expects the UAE economy to grow by 3 per cent this year, so outlook is reasonably positive. Rents should

increase at an inflation level of 4 to 5 per cent this year.





Outlook for sales

It seems that people are holding their breath waiting to see what will happen in a new “lower for longer” era of oil prices, and how the Abu Dhabi government will respond. Continued

increases in rental prices should signal rises in sale transactions, but the two have temporarily decoupled over the uncertainty. This has led to yields on investment property getting bigger

and some rich pickings for more confident investors. A positive budget and continued rent increases would snap the uncertainty in the back end this year, and a flood of investors could

return to take advantage of high yields, with end users buying to control rents.

Interest rates

The fly in the ointment for sale prices may be interest rates. The US Federal Reserve is expected to raise rates by a further 0.5 per cent through this year (and the UAE is likely to follow because of the dirham-dollar peg). Couple that with lower liquidity in the UAE banking

system as the government withdraws money, and borrowing will get more expensive. Expensive borrowing makes buying harder for end users and less profitable for investors using

leverage.

The property market will generally hinge on population statistics. If people keep arriving, then rents will rise and returns will start looking too good to ignore; buyers will come back to the

market in droves to take advantage of yields and cost savings. However, if Abu Dhabi’s government spending falls and it lays people off outside the oil and construction sectors, which have taken the brunt of the reductions, then the population might stagnate. If that happens,

there will be bloated housing inventories and sale prices and rents will start to fall.


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HAS THE FALL IN DUBAI PROPERTY

PRICES COME TO AN END?

SATURDAY 09 JANUARY 2016

Dubai’s residential property market is showing signs of plateauing after about 18 months of price decline.

New figures from the consultancy ValuStrat show that there was “no significant change” in values of apartments and villas in the 26 areas that it monitored in December. It said that its ValuStrat Price Index remained constant at 97.9 – the first time that no monthly change has

been recorded since the current market correction began in mid-2014. The Index compares prices from a 100-point base that was set in January 2014.

The ValuStrat research manager Haider Tuaima said that the pace of decline in its house price index had started to slow early in 2015, and for the past few months the change in values registered had been negligible, indicating “a plateau in prices”.

“Some might suggest that this is a bottoming out of the market and the only next step is for values to go up,” he said. “We’re not saying that at the moment, but it seems the signs are indicating that we’ve reached a predictable stage of the market. If all other economic factors are the same, we are assuming it will stay this way for the next three to six months.”

Ahmet Kayhan, chief executive of the real estate data specialist ReidIn, said that its figures also showed that price declines were coming to an end. Its latest data shows a 2 per cent fall in prices during the three months to December, but Mr Kayhan told The National that

apartment prices started to turn in October 2015, registering their first increase in 13 months. Villa prices continued to fall for another couple of months, but they also plateaued in

December.

“The main reason around that is the rental yield,” said Mr Kayhan. “Yields have come to a level which is making the market really, really attractive [for investors].

“When you look at the yield numbers right now, you’re looking at 7.5 to 8 per cent for the

general apartment market. And you’ve got 9 to 10 per cent for smaller units and more affordable property in places like Discovery Gardens, International City and B-type units in JLT.”

Meanwhile, Dubai Land Department (DLD) said that the value of real estate transactions registered in the city increased by 8 per cent in 2015 to Dh267 billion.

The total number of transactions – including sales, mortgages and transfers – also increased by 18 per cent to 63,719 (2014: 53,871).

Sales of land and buildings made up 49 per cent of the total, with more than 48,000 transactions adding up to Dh130bn of deals. That means the number of deals done increased





by 26 per cent when compared with last year’s published figures, while the value of deals increased by 16 per cent.

The DLD director general Sultan Butti bin Mejren said that the figures prove Dubai’s real estate market “is able to continue to attract investors from around the world, which means that it is likely to maintain sustainable growth for years to come”.


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PROPERTY AGENTS BAIT DUBAI

HOMEBUYERS WITH ‘DISTRESS’ DEALS


A number of agencies in Dubai are marketing properties as “distress sales” in Dubai in a bid to drum up interest in what remains a sluggish market.

Last week, The National received an email blast from the Dubai-based agency Homes4-Life marketing a town house in phase 2 of Dubai Properties’ Mudon project. The 3,808 Type A unit – an end terrace with a side and back garden – was being marketed as a distress sale, with

Dh300,000 knocked off an original price of Dh3 million.

“This particular owner is really desperate,” said the Homes4Life director Nitin Giyanani.

“You don’t get Mudon Type A properties at these prices. But because this guy cannot make the payments, that is why he is letting it go at such a brilliant price.”

Another agency marketing distressed properties is Dubai-based Driven Properties. These include a two-bedroom Palazzo Versace-serviced apartment at Dubai Creekside for Dh5.2m and a five-bed villa at Living Legends in Dubailand for Dh3m.

Robert Richards, the Driven Properties operations director, argued that there had been an increase in distressed properties coming on to the market over the past six to 12 months.

“The main reason is what’s happening around the world. The biggest investors we’ve seen with distressed deals are the Russians, because they can’t get money out of Russia so they’re trying

to sell assets to get funds,” he said.

“A lot of it is buyers who are only looking for deals at under market rates. That’s led to agents having to push sellers to drop prices. Investors are extremely cautious at the moment,” said

Mr Richards.

However, others said that buyers merely seeking deals was not a sign that there are more forced sellers.

“I don’t think there has been any sign of distressed sales,” said David Godchaux, the chief

executive of Core Savills.

“The market is clearly down, but there is no crash. If people want to sell, they are less pushed than in 2009 because they still have a job, and even with lower prices the economy is not that bad. Companies aren’t massively firing.”

Mark Wellman-Riggs, sales director at ERE Homes, said: “I’m not convinced there are proper distressed sales out there. What I see as a distressed sale is someone’s market value is Dh3m, but if they’re selling as distressed they’re knocking Dh500,000 off to sell straight away. Too





many agents advertise distressed sales, but when you ring them you find the seller wants a quick sale but still at market price.”

Mr Godchaux added that some of the properties being marketed as distressed sales are “non-existent”.

“Some are advertising real properties that are not distressed, or properties that are not real and prices that are crazy.”

One small Dubai portal had three distressed properties listed by Espace Real Estate. However, when contacted by The National, John Lyons, Espace’s head of sales and leasing, said that these were neither “distressed” properties nor even current listings, with one having been sold

at above asking price 18 months ago.

“I wouldn’t say there is much evidence of distress in the market right now. Yes, transaction volumes are lower and values have trended downwards, but a lot of this is the result of a

natural cyclical downturn, tighter mortgage regulations, higher transfer fees [and] a strong US dollar,” said Mr Lyons.

“Despite the price correction, we’ve not seen people making a dash for the exits.”

Haider Ali Khan, chief executive of the property portal Bayut.com said that the number of distressed listings on its site had increased in the second half of 2015, but added that they still

made up just 0.6 per cent of its total listings.

“Distressed listings are few and far between and could be attributable to either edgy landlords or properties not being competitive,” he said.


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PROPERTY TO SPROUT ALONG DUBAI

CANAL


During his inspection of the Dubai Canal project on Saturday, His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, was briefed by Saeed Humaid Al Tayer, Chairman of Meydan Group, about property and urban development projects to be built on the two banks of the canal.

These projects will be built on an area of 4.68 million square metres with 605,000 square metres earmarked for commercial purposes. They include 5,345 residential units and 948 hotel rooms.

The project comprises the following districts: Gate Towers, Jumeirah, and Peninsula (Beach).

The Gate Towers bridge at the entrance of the canal will comprise a three-level mall built above the canal covering 300,000 square metres. It will feature 434 retail outlets and restaurants. The roof of the mall has been designed as a green park providing an optical

connection between its greenery and that of Al Safa Park. The Gate Towers project will include a five-star hotel, hotel apartments and branded apartments.

Also part of the project are four residential towers linked to Al Safa Park, around 500 retail

outlets and restaurants and 1,141 residential units.

Around 200 outlets and restaurants and 211 residential units will be constructed on both sides of the canal.

The canal project will peak at the delta where a peninsula will be formed, adding more than a

kilometre to the new beach of the Jumeirah Beach Park.

This expansion will create space for deluxe property development projects in the Marina area featuring more than 60 marinas, 1,817 residential units, 957 five-star hotel rooms, 347 retail outlets and restaurants.


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DUBAI LAND DEPARTMENT REPORTS

DH267B REAL ESTATE TRANSACTIONS

FOR 2015


Dubai Land Department’s released its annual report on Saturday, and it showed real estate transactions recorded in the emirate last year exceeded Dh267 billion.

The report showed an 8 per cent increase compared to last year with 63719 total transactions.

Sultan Butti Bin Merjen, Director General of DLD , said: “These quarterly reports issued by our experts assure that the Dubai market has reached a stage of wise maturity and rational dealing with the requirements by the various sides in the real estate market. If we look at the moves that have been recorded over the past year details, we can see clearly the optimal

policies followed by senior developers to diversify their products and put forward their proposals to acquire full confidence on the part of customers and investors,”

Bin Mejren added: “The market has become has become more innovative, inspired by the vision of His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, and the developers were keen to boost the new

projects with facilities that aim to satisfy the residents. Keeping this momentum for years, proves that the real estate market in Dubai is able to continue to attract investors from around the world, which means that it is still likely to maintain sustainable growth again for years to

come.”

In details, the report reveals that the sales crossed the 48,000 transaction with a total value of Dh130 billion, while mortgages crossed 12,000 with a total value of Dh117 billion.

Sales and mortgages relating to land transactions recorded more than Dh194 billion from the total real estate figure for 2015, with the total of 16,751 transactions. The commercial lands (already built on) acquired the lion share in terms of value for the type of land with 40% in

total. Looking at the value of transactions by the buildings and units, we find that the transactions exceeded 46,968 transactions with a total value of Dh72 billion during 2015.

The Al Yafra 2 area of Dubai was revealed to be the most attractive for investors, with the value of its transactions from sales of lands reaching Dh3.285 billion through 1563 sale

transaction. This was followed by Al Hebeya 3 with a total of 1360 sale transaction worth of Dh3.950 billion, where “Al Yafra 3” followed with 926 transactions worth Dh1.710 billion.

Business Bay took first place in unit sales, with 3212 transaction with the value of Dh4.953 billion, followed by “Al Hebiya 4” with 3080 transactions with the value of Dh2.573 billion, while Dubai Marina came in at third with 3059 transactions with the value of Dh6.240 billion.





With regards to buildings, Al Yalayis 2 were the most prominent with total of 1022 transaction with the value of Dh1.354 million, followed by Al Yalayis 1 sales with total of 425 transaction

with the value of Dh785 million, while Shaikh Mohammad Bin Rashid Gardens came in third with total of 371 transaction with the value of Dh1.007 billion.

Al Barsha South 1 came on top in terms of mortgages transactions for lands, with 387 mortgage transaction with total value of Dh415 million, followed by Al Thunaya 5 with 399 mortgage transaction with total value of Dh1.377 billion, while Al Thunaya 4 came in third with

249 mortgage transaction with total value of Dh1.902 billion.

Dubai Marina came on top in terms of mortgages transactions for units, with 927 mortgage transaction with total value of Dh1.788 billion, followed by Business Bay with 814 mortgage transaction with total value of Dh1.821 billion, while Al Thunaya 4 came in third with 739

mortgage transaction with total value of Dh911 million.

In terms of buildings, Al Thunaya 4 came on top in terms of mortgages transactions, with 284 mortgage transaction with total value of Dh526 million, followed by Wadi Al Safa 6 with 175

mortgage transaction with total value of Dh349 million, while Al Barsha South 4 came in third with 92 mortgage transaction with total value of Dh158 million.


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CONSTRUCTION COSTS REMAIN

FAVOURABLE IN DUBAI


There’s at least some relief for developers — the cost to build in Dubai and Doha is among the lowest in the world, according to a benchmark construction cost index. That key building materials are available in sufficient quantities and at relatively low prices are what is helping keep costs from running away.

“The region’s major commercial centres of Doha and Dubai remain — for the time being, at least — relatively stable locations for developers, benefiting from access to inexpensive labour and energy,” said Ian Williamson, Buildings Global Business Leader at the consultancy Arcadis,

which brought out the index.

“Throughout 2015, the global construction market saw the overall level of cost inflation restricted due to the drops in commodity prices. Particularly when it comes to oil, growing

uncertainty over prices will inevitably have a short to medium term impact on the GCC construction industry.”

At least for the near term, the lower cost of development will prove favourable for Gulf governments pushing ahead with major projects. Dubai has the Expo 2020 infrastructure and

venue build-up progressing, while over the next 10 years, Doha could run up a bill of $150 billion on roads, railways, stadiums and ports, as well as hospitality and social infrastructure.

Qatar also has plans for further investment in transport infrastructure, water and electricity by 2020.

New York, London and Hong Kong occupy the top positions in terms of construction costs in the index, which looked at trends across 44 key cities. Dubai was ranked 18th, while Doha

came in 12th and Jeddah in 16th.

“It is fair to say that we have another challenging year in prospect for the construction industry. With the steep fall in the price of oil, the timing of investment programmes across the

Middle East has become uncertain,” said Williamson.

“Declining commodity prices, low labour rates and a highly competitive Middle East construction market have given rise to more potential opportunities across newly-affordable markets. It is a good time for government, funders and developers to capitalise on their

investment ambitions.” Apart from the worry over current oil prices, GCC economies — and its real estate and construction sectors — will also have to be on their guard against external

shocks.

‘Dubai receives a lot of investment cash from other oil economies, which will have also been affected by the commodity price crash,’ according to the Arcadis report. ‘A strong dollar also

makes both tourism and property investment more expensive for key Asian investors.





‘The strength of currencies tied to the US dollar will inevitably have long-term impacts on construction markets in the Gulf Cooperation Council (GCC) countries.’


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WASL PROPERTIES LAUNCHES 'WASL

DUET' IN KARAMA


wasl properties has announced the launch of 'wasl Duet' in Karama. The first building in the two-building mixed-use project was launched today, with the second due to be released onto the market imminently. The project forms part of wasl properties ' agenda to regenerate the established districts of Dubai and features a number of retail outlets to support the

surrounding area.

" wasl properties is delighted to announce the launch of wasl Duet, a new project for the Karama district of Dubai. The mixed-use development forms part of the company's strategy to

revitalise the district and transform it into a modern, contemporary neighbourhood. The buildings reflect wasl properties ' rejuvenation programme, with their distinctive architectural

designs, modern amenities, convenient retail facilities and plenty of parking for residents and visitors," said Zainab Mohammed, CEO Property Management and Marketing, wasl properties .

wasl properties ' first building comprises 12 one-bedroom and 18 two-bedroom apartments and has a retail space of 1,355 sq. ft. The second development will have 21 one-bedroom and

30 two-bedroom apartments with a retail space of 3,649 sq. ft. The second building will include a swimming pool, children's play area and a gym.

wasl properties has introduced a total of 607 residential units spread across nine projects in Karama since 2008. Its commitment to the area sees it with another eight projects in the pipeline, which will be developed and delivered up until 2018. The company says that a

significant percentage of inquiries it receives are related to residential and commercial space in Al Karama, indicating a high demand for this important area of the city.

"Karama is a much sought after district for both residents and for those with commercial concerns thanks to its proximity to major areas in Dubai, its high population density, its

vibrancy and its ease of access via the RTA Metro. These are all important elements for the success of residential and retail projects and wasl is proud to play a vital role in re-enervating

this important city hub and introducing modern, contemporary living standards to the area," added Ms. Mohammed.

Source: Zawya (Press Release 2016)

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DUBAI PROPERTIES BRINGS SMART

BIKES TO BUSINESS BAY


Dubai Properties has welcomed Smart Bike (SB) UAE to their new home at Bay Avenue in Business Bay. A brand new concept in the UAE, the service was launched last week by H.H.

Sheikh Hasher Al Maktoum, Director of Dubai Information Department, who commended the concept for being a green and convenient mode of alternative transportation for all the

residents and visitors of Business Bay.

Based in Bay Avenue, Smart Bike UAE provides a convenient means of transportation at Business Bay which is affordable, enjoyable, safe and environment friendly. Originally

developed in Germany, Smart Bike seeks to create a wide network of short distance transportation that will support current transport facilities, closing the gap between the commuter and his destination, and provide a method of transportation that is both convenient

and fun to use.

"The soft launch of this unique concept is already proving to be very popular among the community of Business Bay," said Mohamed Bin Essa, Executive Director Retail and

Commercial Properties, Dubai Properties . "We?re always exploring and introducing new and innovative options to facilitate and enhance the lives of the residents and visitors of our destinations, and Smart Bikes makes a perfect addition to what Business Bay has to offer. Now

our visitors can swiftly move between their offices, to the malls, or to the metro stations, and enjoy a new green and safe transportation concept".

Smart Bike UAE offers two different options for people to get around the Business Bay area, either as a passenger or cyclist, with bikes available for hire at kiosks at three different locations: Business Bay Metro Station, Bay Square and Bay Avenue.

"Business Bay is the ideal destination to become the home of Smart Bike UAE," said Mohammad Noureddine, Senior Marketing Manager at SB UAE. "This new service will definitely be a great alternative to the daily commuters who live or work in the district, on their way to or from the metro, as well as all the visitors to the outdoor retail areas and promenades."

Source: Emirates News Agency

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DUBAI RENTS DROP IN 2016 RERA

INDEX


Rents in most of Dubai's residential communities, particularly freehold areas, will likely be cheaper this year compared to 2015.

The rental calculator by the Dubai Land Department's Real Estate Regulatory Authority (Rera) has just been updated to provide the leasing rates for various apartments and villas in 2016.

The calculator, which serves as an online tool for determining rental increases, suggests some

price ranges and advises tenants whether or not they are entitled to an increase this year.

A quick review by Gulf News of the latest data shows that the leasing rates for one-bedroom apartments in 2016 have dropped by at least 2.3 per cent to as much as 14 per cent.

Compared to the prevailing rates in July 2015, one-bedroom flats in International City,

Discovery Gardens, Jumeirah Village, Greens, Dubai Marina, Jumeirah Beach Residence and Palm Jumeirah are now generally cheaper.

Apartments in Business Bay and Downtown, however, have gone up by 2.7 per cent and 2.4 per cent on average, respectively. Rents in some communities, including Jumeirah Lake

Towers (JLT) remain unchanged at Dh75,000 to Dh 95,000 a year.

According to the rental calculator, the rent for a one-bedroom residential unit in Discovery Gardens is now in the range of Dh60,000 to Dh75,000, up 3.5 per cent from July's rates of

between Dh65,000 and Dh 75,000.

In International City, annual rates range between Dh 38,000 and Dh45,000, about 14 per cent cheaper compared to Dh42,000 to Dh55,000 last year.

Similar flats in Jumeirah Village are in the range of Dh55,000 to Dh70,000 a year, down by an average of 7.4 per cent from Dh55,000 to Dh80,000 in 2015.

In the Greens, rents for one-bed flats now cost around Dh80,000 to Dh90,000 a year, compared to Dh80,000 to Dh105,000 last year.

Dubai Marina's one-bedroom apartments, now costing between Dh90,0000 and Dh110,000, registered a 4.7 per cent decline when compared to July 2015 rents.

Rents in JBR range between Dh90,000 and Dh120,000, down by 2.3 per cent compared to 2015 price range of Dh90,000 to Dh125,000.

In Palm Jumeirah, rents are between Dh120,000 and Dh155,000, down by approximately 3.5

per cent from last year's rates of Dh110,000 to Dh175,000.

More expensive





The 2016 rates for one-bedroom apartments in Business Bay will be in the range of Dh80,000 to Dh105,000, up 2.7 per cent from Dh75,000 to Dh105,000 last year.

In Downtown Dubai, similar apartments will cost around Dh95,000 to Dh115,000, up 2.4 per cent from Dh95,000 to Dh110,000 last year.

2016 rates for one-bed apartments in select areas around Dubai:

Discovery Gardens: Dh60,000 to Dh75,000

International City: Dh38,000 to Dh45,000

Jumeirah Village: Dh55,000 to 70,000

Greens: Dh80,000 to Dh90,000

Business Bay: Dh80,000 to 105,000

Jumeirah Lake Towers: Dh75,000 to Dh95,000

Dubai Marina: Dh90,000 to Dh110,000

Downtown/Old Town: Dh95,000 to Dh115,000

Jumeirah Beach Residence: Dh90,000 to 120,000

Palm Jumeirah: Dh120,000 to Dh155,000

Deira

Abu Hail: Dh40,000 to Dh50,000

Al Buteen: Dh50,000 to Dh60,000

Al Garhoud: Dh55,000 to Dh65,000

Al Muraqqabat: Dh55,000 to Dh75,000

Al Muteena: Dh55,000 to Dh70,000

Al Nahdah: Dh50,000 to Dh60,000

Al Rigga: Dh60,000 to Dh70,000

Bur Dubai

Al Mankhool: Dh65,000 to Dh80,000

Al Jaffliya: Dh55,000 to Dh65,000

Al Badaa: Dh50,000 to Dh70,000

Al Barsha: Dh65,000 to Dh80,000

Karama: Dh55,000 to Dh75,000

Satwa: Dh45,000 to Dh65,000

Al Wasl: Dh60,000 to Dh75,000





Jumeirah: Dh70,000 to Dh75,000

Source: Dubai Land Department/ Rera rental calculator

Note: Percentages on rental decline/increase were calculated based on July 2015 rates. Actual figures may vary.

Source: Gulf News

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UAE HOMEOWNERS CAN PLAY IT

SMART VIA MORTGAGE REFINANCING


Worried about what further US interest rate hikes could do to your mortgage payments? Try refinancing them … on terms that are still conducive to your interests.

And there are multiple reasons as to why favourable terms — including extended fixed rate periods — will be available. As retail lending activity tightens up in the near term, UAE banks are likely to be far more generous in what they are willing to offer those with existing loan

exposures.

And mortgage refinancing takes the lead because of the longer terms — and margins — involved in paying them back. “Refinancing activity is clearly [an] indicator that the asset base

is being anchored in terms of long-term money rather than the speculative “hot money” during the first boom-bust cycle in 2008,” said Sameer Lakhani, Managing Director at Global Capital

Partners, the investment firm. “It is a healthy signal for further asset ownership.”

With refinancing, bankers’ rationale is that it is far better to chase opportunities among those who have already had their credit records vetted and are making payments on properties that have either been delivered or soon will be. In a soft market, these details counts a lot.

To net those clients, the banks could offer highly competitive lending terms, or promise them longer fixed-rate periods. This, from a mortgage taker’s perspective, is what could protect them from shelling out higher monthly instalments … at least for a longer term than what they

got with their existing mortgage lender.

“On average, we can see lock-in rates for most banks falling between 2.99-3.99 per cent,” said Dhiren Gupta, Managing Director at 4C Mortgage Consultancy. “A few large banks have

controlled their rates at the same level [even after the 0.25 per cent hike by Federal Reserve on December 16].

“If someone is willing to move to such lenders, it would be the right time if lending parameters

and financially viability are there for the homebuyer.

“Lenders have their own predefined benchmarks that decide the rates and terms of lending, [with] rate variations among salary transfer and non-salary transfer cases.

“Banks, by and large, also set a higher rate for self-employed profiles.”

Even before the Fed’s hike on December 16, mortgage borrowers in the UAE had been busy

refinancing. According to a recent Dubai realty update by Global Capital Partners, “there are instances where mortgage transactions outweigh sales, especially in periods of a downturn … implying a higher number of refinancing and other types of transaction are taking place.





“There are certain months where mortgages overtake sales, implying that a larger number of refinances or other types of transactions are under way. These instances are more common in

periods of declining prices — Q3-2008 to Q2-2011 and from Q2-2014 to date.”

It is also less expensive for borrowers to switch sides, i.e. banks. As per Central Bank guidelines, a bank can charge the customer only 1 per cent or Dh10,000 — whichever is lower

— to switch from one bank to another. This has “promoted the scope of refinancing deals,” said Gupta.

Also, “Concessions on refinancing deals like waiving the processing fees or free property valuations by the lenders definitely give borrowers the space to convert their old mortgage for better terms with other lenders. Undoubtedly, it gives more flexibility and a substantial saving opportunity in the long term.

“However, refinancing offers are not always identical for every borrower. It carries a lot of variation and has to be tread carefully to make it a smart move.”

Even a 0.25 per cent hike can tell on UAE borrowers’ payments

Assume a current interest rate of 3.99 per cent annually on property worth Dh2 million on which mortgage is offered for 60 per cent of the value. The loan amount will be Dh1.2 million

and will have to paid in monthly EMIs of Dh6,327 over a 25-year tenor.

“But if we add the Fed hike of 0.25 per cent, then the revised rate would hover at 4.24 per cent and the cost on a monthly basis would be Dh6,494 — an almost 2.6 per cent rise in

monthly payments,” said Dhiren Gupta at 4C Mortgage Consultancy. “If the Fed rates clamber further to 0.50 per cent, then the monthly will cost Dh6,663 which would indicate rise of 5.3

per cent on the instalments. This could be a substantial amount if the mortgage loan is managed for the longer term.”

The downside for banks in going heavy on refinancing

Such a surge could imply a “shortage of liquidity” across the layers of the local economy.

It means “businesses are pledging assets to cover for either their business operations or other

expenses,” said an analyst.

“While this activity is normal, it leads to a sort of “moral hazard’ if prices fall and leaving bank balance-sheets vulnerable. The lack of liquidity may also imply other stresses in the banking system that need to be scrutinised.”

Source: Gulf News

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MALL WITH ROOFTOP PARK COMING TO

DUBAI CANAL


During his inspection of the Dubai Canal project on Saturday, His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, was

briefed by Saeed Humaid Al Tayer, Chairman of Meydan Group, about property and urban development projects to be built on the two banks of the canal.

These projects will be built on an area of 4.68 million square metres with 605,000 square metres earmarked for commercial purposes. They include 5,345 residential units and 948 hotel rooms.

The Gate Towers bridge at the entrance of the canal will comprise a three-level mall built above the canal covering 300,000 square metres. It will feature 434 retail outlets and restaurants. The roof of the mall has been designed as a green park providing an optical connection between its greenery and that of Al Safa Park. The Gate Towers project will include

a five-star hotel, hotel apartments and branded apartments.

Mapped: The Dubai Canal project

Canal extension map





Also part of the project are four residential towers linked to Al Safa Park, around 500 retail outlets and restaurants and 1,141 residential units.

Around 200 outlets and restaurants and 211 residential units will be constructed on both sides of the canal.

The canal project will peak at the delta where a peninsula will be formed, adding more than a kilometre to the new beach of the Jumeirah Beach Park.

This expansion will create space for deluxe property development projects in the Marina area featuring more than 60 marinas, 1,817 residential units, 957 five-star hotel rooms, 347 retail outlets and restaurants.

Source: Gulf News

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RENT, EATING OUT, GROCERIES: REAL

COST OF LIVING THE DUBAI LIFESTYLE

THURSDAY 07 JANUARY 2016

The emirates of Dubai, Abu Dhabi and Sharjah are far more affordable to live in when compared to many other cities around the world. The three cities in the UAE stack up as the more affordable ones among the 494 cities ranked for the latest 2016 cost of living index.

Compiled by Numbeo, a database of user-contributed data about cities and countries worldwide, the index calculates the ranking based on a range of costs, including rentals, groceries, travel, eating out and clothing, etc.

According to Numbeo’s 2016 Cost of Living Index, Dubai ranks at #189 out of the 494 cities that its index ranks, while Kuwait City in Kuwait at #30 emerges as the most expensive city to live in the Middle East. Qatar’s Doha is ranked at #196, followed by Beirut at #232 and Abu

Dhabi at #261.

Regional Top 10 most expensive cities

30 Kuwait City, Kuwait

189 Dubai, United Arab Emirates

196 Doha, Qatar

232 Beirut, Lebanon

261 Abu Dhabi, United Arab Emirates

273 Sharjah, United Arab Emirates

286 Muscat, Oman

289 Amman, Jordan

304 Baghdad, Iraq

307 Jeddah, Saudi Arabia

(Source: Numbeo)

Dubai is far more affordable when compared to global cities like Zurich (2), Geneva (4), San Francisco (13), New York (15), London (17), Washington (19), Tokyo (38), Chicago (40), Singapore (48), Hong Kong (57), Paris (60), Sydney (61), Los Angeles (100), Melbourne

(130), Venice (143), and Frankfurt (158).

The most expensive cities to live in are mostly in Switzerland. Hamilton in Bermuda is the world’s costliest city to live in, followed by seven cities in Switzerland.





Global Top 10 most expensive cities

1 Hamilton, Bermuda

2 Zurich, Switzerland

3 Basel, Switzerland

4 Geneva, Switzerland

5 Zug, Switzerland

6 Bern, Switzerland

7 Lausanne, Switzerland

8 Lugano, Switzerland

9 Tromso, Norway

10 Nassau, Bahamas

(Source: Numbeo)

India hosts the world’s most affordable cities

The most affordable cities on the list are all in India with most of them being in the south of the country.

At #494, Thiruvananthapuram in India – where a good number of UAE residents come from – is the cheapest city one can live in.

Global Top 10 most affordable cities

494 Thiruvananthapuram, India

493 Coimbatore, India

492 Madurai, India

491 Kochi, India

490 Bhubaneswar, India

489 Ahmedabad, India

488 Vijayawada, India

487 Guwahati, India

486 Indore, India

485 Hyderabad, India

(Source: Numbeo)

Fluctuating cost of living





Mercer’s Cost of Living Survey released last year put Dubai as the 23rd most expensive city in the world in 2015 (up from a rank of 67 in the previous year).

UAE capital Abu Dhabi, too, went up the rankings last year – moving from #68 in 2014 to #33 in 2015.

Nevertheless, both UAE cities remain considerably cheaper than other expat hotspots such as Hong Kong, Zurich, Singapore, Geneva, Tokyo, London and New York, among several others.

A strong dollar and increasing demand for housing have been cited as primary reasons for increased cost of living in the two UAE cities.

The Mercer survey is based on the comparative cost of more than 200 items in each location, including housing, transportation, food, clothing, household goods and entertainment.


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With 30 years of Middle East experience, Asteco’s Valuation & Advisory Services

team brings together a group of the Gulf’s leading real estate experts.

Asteco’s network of offices in Abu Dhabi, Al Ain, Dubai, Northern Emirates, Qatar, Jordan and the

Kingdom of Saudi Arabia not only provides a deep understanding of the local markets but also enables us to undertake large instructions where we can quickly apply resources to meet clients requirements.

Our breadth of experience across all the main

property sectors is underpinned by our sales, leasing and investment teams transacting in the market and a wealth of research that supports our decision making.

John Allen BSc MRICS

Director, Valuation & Advisory

+971 4 403 7777

[email protected]

Julia Knibbs MSc

Manager – Research and Consultancy - UAE

+971 4 403 7789

[email protected]

VALUATION & ADVISORY

Our professional advisory services are conducted

by suitably qualified personnel all of whom have

had extensive real estate experience within the

Middle East and internationally.

Our valuations are carried out in accordance with

the Royal Institution of Chartered Surveyors

(RICS) and International Valuation Standards

(IVS) and are undertaken by appropriately

qualified valuers with extensive local experience.

The Professional Services Asteco conducts

throughout the region include:

• Consultancy and Advisory Services

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• Valuation Services

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Asteco has established a large regional property

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required for the successful completion and

handover of units to individual unit owners.

NEWS BRIEF 02 - AstecoBut the Dubai-based financial services company Arqaam Capital said that...

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Transcript of NEWS BRIEF 02 - AstecoBut the Dubai-based financial services company Arqaam Capital said that...