Decreasing property prices experience by property buyer’s with value below selling price

Property price comes down in Dubai are making real estate investment opportunities in a customer’s market that is expected to see increasing demand, concordant to a fresh report. Softer prices provide potential property buyers a strong negotiating position across all real estate sectors and this ‘favourable’ position is growing demand and making selected pockets of growth despite a general slide in prices, concordant to the current report from property consultants Cluttons.

Cluttons, the real estate specialist that has revelled a dedicated presence in the Middle East since 1976, says its market report for the second quarter of 2010 points that in the residential market buyers are capable to negotiate with greater effect and all properties are under pressure to sell at competitive prices, often well at a lower selling price.

The industrial and logistics areas are also following this style, with landlords now accepting the decision to offer long lease agreements, a brand-new step for the Emirate. ‘This move demonstrates increasing maturity in the market and will provide increased benefits to tenants, who are competent to dictate their needs during the negotiation process. The best performing Industrial area in Dubai is the JAFZA, and in specific JAFZA North, an area that provides premium warehousing in conditions of price and Free Zone status,’ it says.

The commercial area is also skewed towards the occupant, with oversupply permitting cost conscious tenants to migrate to offices offering lower rents in competitive buildings. ‘This is an ideal time for businesses looking to upgrade or downmarket their existing office space within Dubai. The areas that are accommodating their value best continue to be the DIFC and Downtown's Emaar Business Square, but even these are under raised pressure from other office zones such as Deira and Bur Dubai,’ the report adds.

‘Ongoing price reductions have opened up the Dubai property market for a broader selection of potential buyers, who are becoming progressively discerning in their property search. Whereas once the landlord or seller accommodated an strong position, we now see buyers negotiating with landlords to bring prices well below the asking price,’ said Steve Morgan, head of Cluttons UAE.

‘Evenly, pressure from occupiers in the commercial and logistics sectors, has entailed that landlords have had to increase lease length, which we feel to be a confident step for the market. The continuing deflation of prices, whilst painful in the short term is setting Dubai up well in the Global arena to benefit from expansion of existing and move of new business into the city as the Global economies start to recover,’ he added.

Cluttons also released reports on the property market Abu Dhabi, Bahrain, Dubai, Oman and Saudi Arabia looking at the affect of the current economic situation on real estate markets throughout the region.

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Numerous Resident Transferring to Dubai

Many residents are now going to Dubai from cities for example Sharjah and Abu Dhabi as rents go down. A new survey supervise by YouGov Siraj Omnibus admit that Dubai is once again the city of choice for more people. It shows that with drop down prices more people are transfer to larger rental properties. It also shows that more than 40 percent of residents who are now living in two-bedroom apartments were living in 1 bedroom unit a year ago and almost fifty percent living in 3 bedroom units were in 2 bedroom blocks last year.

The survey announces that not quite 35% of the UAE population is of the view that the property market will boost in 2011. The survey also give to light that more property owners would like to accept a watch and wait policy before going any further steps.

But drop down property prices in Dubai are a matter of concern for the property owners. Newest reports from Deutsche Bank reveal that over supply and low demand continue to hit property prices in Dubai.

However, 71% of property owners are not involved in buying property in the UAE in the next few months, the survey admit.

More than 30,000 new properties in Dubai and 10,000 in Abu Dhabi will be added to the market this year, said real estate company CB Richard Ellis.

Another new survey by Reuters also predicts that over supply in Dubai and Abu Dhabi market will force a further reduce of property prices in 2010.

Affordable housing given breakthrough by partnership

The arrival of a new fund, Mubadala Pramerica Real Estate Investors, to invest in the middle-income housing market is a significant step in the development of Abu Dhabi’s property sector.

Since the rush to build began in the capital more than three years ago, the focus has been on the high end because such properties brought the greatest return for developers. But with the onset of the global financial crisis and the regional property downturn, these homes have lost some of their appeal for developers.

Rising default rates coupled with declining prices have led to hard times for property companies, many of which suffered a dramatic fall in profits since their heyday in mid-2008.

Analysts point to the middle-income sector as the largest driver of demand for homes. No longer are buyers looking to pay deposits on homes, only to resell them at a profit months down the line. The calculus has shifted towards people who see that buying is more affordable than renting.

“The demand is huge,” said David Dudley, the head of the Abu Dhabi office of the property consultancy Jones Lang LaSalle. “The overall market is going to become quickly oversupplied in terms of luxury product and undersupplied in terms of affordable housing.”

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Infinity Tower- the world's tallest high rise building with a twist

Infinity Tower is a skyscraper under construction by Palma Real Estate in Dubai, United Arab Emirates. The project resumed construction in July 2008, after a delay caused by the collapse of a nearby wall and subsequent flooding of the construction site.
Construction of the 330 m (1,080 ft) building began in February 2006 and when completed in 2010, it will have 73 stories and be the world's tallest high rise building with a twist of 90˚. The tower will twist exactly like the Turning Torso in Malmö, Sweden, and will be the tallest to do so. Each floor is rotated by 1.2˚ to achieve the full 90˚ spiral, creating the shape of a helix. The Tower will have residential apartments, conference rooms, tennis courts, pools, a state of the art gymnasium, a nursery and a spa. An earlier design was for a taller, darker tower 372 m (1,220 ft) tall with 93 floors.





The Project of the property development company CAYAN, its architects were Skidmore, Owings & Merrill (SOM) and will be located in the Dubai Marina.
As of March 2010, 57 floors have been completed.

Dubai builders start to regain some motivation

Construction companies are expected to start regaining some momentum with second-quarter earnings now that Dubai World’s debt issues are mostly resolved, analysts say.

Overall, Nomura expects a 12 per cent decline in earnings for the sector compared with the second quarter of last year, largely because Dubai World’s issues slowed the amount of work available.

Late last month, Nakheel said it had reached an agreement with 75 per cent of its trade creditors and would settle just over $US1 billion (Dh3.67bn) of claims within two weeks.

Arabtec Holding said last week it had received its first cash payment but did not reveal how much.

A consensus of three analysts, from Nomura, Shuaa Capital and UBS, predicted a net profit of Dh146 million for Arabtec in the second quarter.

“The first quarter of the year was marred by a UAE construction-wide slowdown between the two Dubai World announcements,” said Chet Riley, an analyst with Nomura. “We expect (the second quarter) to witness an improvement in construction activity.”

Saud Masud of UBS cut his target share price for the contractor to Dh1.70 from Dh2.10 last week, as he saw Arabtec’s opportunities in Saudi Arabia to be less attractive than initially perceived.

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Apartment owners face huge bills for upkeep of their blocks

DUBAI-Hundreds of apartment buildings in Dubai are facing a shortage of maintenance cash because property owners have failed to pay service fees.

The full extent of the default rate, which has reached 75 per cent in some developments, is only now coming to light as developers hand over building management responsibilities to homeowner associations under the recently enacted strata law.

It means that the new homeowner groups could be saddled with debt as soon as they start taking over the management of their buildings.

For example, to replace a basic chiller in a tower building costs up to Dh3 million – and if there is no reserve fund in place because of service charge defaults, owners would have to foot the entire bill when the work was done.

“Service fee arrears is a big issue in many buildings,” said Gary Bugden, the executive chairman of PRDnationwide, a property services company. “A lot of people just aren’t paying.”

The amount paid in service fees has been a bone of contention for residents in some developments, where property prices have fallen by as much as half since the end of 2008.

Service fees surged during the boom years, with some developers charging up to Dh21.85 a square foot in annual fees, or more than Dh20,000 for a typical one-bedroom flat. Property owners started refusing to pay, either for services they felt were not provided or shared amenities that were poorly maintained.

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Abu Dhabi's towering achievement

The building leans westward at 18 degrees, more than five times the angle of the Leaning Tower of Pisa. The top 17 floors, out of a total of 35, hang over the edge, putting thousands of tonnes of pressure on the core of the building.

Contractors and engineers devised a series of solutions to this problem, some of which have never been seen in the world of tower construction. In fact, this unique challenge is the reason that National Geographic is featuring the building along with Sheikh Zayed Mosque and the circular Aldar headquarters building as the “making of three modern day wonders” starting on Saturday.

To understand the epic engineering challenges of building the leaning Capital Gate tower in Abu Dhabi, you must first realise that nature wants it to collapse.

“Everything about the tower makes it want to fall over,” says Michael Johnson, who has been appointed to oversee the final phase of construction of the building by the Abu Dhabi National Exhibitions Company (ADNEC). “But it has been designed to stop.”

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Dubai grows as depreciate rents attract migrants

DUBAI // The population of Dubai rose 7.5 per cent in the first quarter of the year as lower rents and living costs drew migrants from neighbouring emirates to the city.

Dubai property prices may fall by a further 15 per cent, Bank of America Merrill Lynch said in a report last month. “Rents are cheaper and people are upgrading their lifestyle,” said Mishaal al Gergawi, an Emirati social commentator.

The emirate’s total population rose to 1,803,000 from 1,676,000 in the same period of last year, figures released yesterday by the Dubai Statistics Centre show.

Dubai’s transient population, or those commuting to the emirate for work, rose by more than 1 million people to 2.87 million, the statistics centre said.

Analysts believe lower rents and the availability of accommodation has fuelled the growth. House prices and rents have been cut in half since peaking in late 2008.

“This is a conservative figure. It could be much more.”

The shifting demographics were demonstrated in the numbers moving from Ajman to Sharjah, and in those moving from Sharjah to Deira. Deira resident were then moving to Bur Dubai and later settling on Dubai’s Sheikh Zayed Road, Mr al Gergawi said.

The new data showed the so-called “active population” was boosted by labourers, white-collar workers and visitors coming to the emirate seeking work. It was unclear whether labourers or white-collar workers made up the biggest chunk of the 1 million rise in the transient population.

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Donald Trump gets OK for world's greatest golf course

Celebrity real estate developer and avid golfer Donald Trump has been given the go-ahead to build what he says will be "the world's greatest golf course" in Scotland as part of a US$1.5 billion development.

Despite some local opposition to the project, Aberdeenshire Council has granted the American tycoon, host of the popular reality TV show "The Apprentice", full planning permission to build the championship links in the north-east of the country.

"My team will (now) finally get to work and build the world's greatest golf course for Scotland and for the great game of golf," Trump, 64, said in a statement.

"We are building on the finest piece of land I have ever seen and we will turn it into a national jewel," added Trump who owns several championship courses around the world.

His organisation said that more than 40 million pounds ($60.19 million) had already been invested in the Scottish project during four years of development.

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Dubai rental index being refresh

The Land Department of Dubai is working on revamping the rental index, making it more comprehensive, Emirates Business can reveal.

As of Monday, the rent increase calculator on the Real Estate Regulatory Agency’s (Rera) website was not showing the requisite calculations from July 1 onwards with an alert saying, “no rental index available for the selected date”.

The first rent index in Dubai was released in January 2009, complied on the basis of rents during the second half of 2008.

Rera says it is not mandatory for landlords to follow the rent index but it is just a guideline or a reference point in case of disputes.

Acticle here: business24-7