Comparatively Palm property prices still high

Apparently Palm Jumeirah has cut its price by 40 percent from their August 2008 peak. But according to Real Estate expert, units on the Nakheel development are still overpriced. Compared to London, Paris and New York, prices on Palm are still high. In comparison to last year, prices for incomplete units were down by 50 percent and that rents were down by a quarter - favourable to other freehold areas in Dubai.

However based on the number of units due to complete over the next two years it is unlikely that prices will increase. Despite the difficulties faced over the last 18 months the UAE remains a commercial nerve centre of the Middle East. After a period of consolidation of between three and five years prices are expected to rise again. Established areas such as the Springs, Meadows, Jumeirah Islands and the Palm had performed well historically and would continue to see a high turnover of transactions. Dubai World announcement is expected to bring a positive period for the UAE.

property prices

Projects delayed owing to poor planning

The blame on lack of funds holding progress of projects has been proved wrong in a survey which claims that it’s the lack of co-ordination between agencies in the GCC which is responsible for it. In spite of cost and schedule overruns it is completion of a project that makes it successful. A team of professors at the UAE University asked a good sample of sponsors or clients, government departments, contractors, consulting and management firms whether their projects were successful. Despite the many delays and doubling or trebling of total costs, 100 per cent of them replied, "YES".

Lack of funding was not a reason for these delays, the survey, 'Management of Transportation Infrastructure Projects in the UAE', found. Rather, faults are caused by management issues and lack of timely co-ordination among many government agencies, it said. Initial studies revealed that there are frequent disturbances in the decision-making process, which starts from planning, scope assessment, designing and tendering and ends in construction. Some projects that were at the designing phase were sent back to the planning/study phase, while some that were at the construction stage were returned for redesigning. Planning, the most vital part of any project is often not done properly, leading to complicated rework during the process.

Dubai real estate

Dubai home prices slides further

Dubai real estate performed the worst in the current year gliding further by 45 percent. The report is from The Wealth Report 2010 produced by Citi Private Bank and property consultancy Knight Frank. It also showed that Dubai was the biggest faller in the list of the world's 40 most influential cities. The emirate is facing the blow from global economic crisis and plummeted three places to 31 in a list based on their economies, political power, knowledge and quality of life.

New York was the top scorer taking over London's top spot this year, as the UK capital also struggled with the financial downturn. High-end home prices faced turmoil all over but Dubai prices were by far the worst hit and Dublin seeing the second highest declines (25 percent). Luxury home prices rose more than 40 percent in the Chinese cities of Shanghai, Beijing and Hong Kong.

Dubai home prices slides further

Dubai mortgage market soars by 75%

Dubai mortgage market is seeing an upward surge by 75 percent for this fiscal year. Dubai Land Department has made the comparison with same period last year. Official Dubai Land Department (DLD) has given the value based on registration on the system between January 1 and March 21 AED9.99bn ($2.72bn). Comparison shows increase in value by 75 percent to last year when AED5.68bn ($1.54bn) worth of new mortgages was processed.

Mortgage advisor Khadija Ebrahim said this is definitely the case on the ground in the market and that they have seen an increase in the number of inquiries from customers looking for mortgage finance. Number of Dubai residents seeking mortagages is higher and the most popular locations are Emirates Living, Jumeirah Lake Towers and Dubai Marina. The increase was basically ue to a low base last year, and now that the banks have relaxed a bit and are offering better terms and conditions in order to attract customers. Interest rates have also come down and are as low as 6.75 percent, compared to an average of 8.5 percent last year.

Union Properties willing to sell assets

Dubai's Union Properties is willing to sell all any of its projects if it receives a fair price. Union Properties, the third-largest developer in the Gulf Arab emirate has been hit by the global downturn, which has sent prices in Dubai's once-booming property sector tumbling some 50 percent from their peaks in 2008. The developer has received offers for its Ritz Carlton hotel in Dubai which the debt-laden firm is hoping to sell for about AED1.5bn ($408.4m).

The company's complete projects have achieved their investment targets and they are being offered to investors for sale. Buyers are mainly investment companies and individuals who are looking to buy complete and rented properties with an income of 7-8 percent. The funds raised from asset sales will be used to repay financial commitments and finance ongoing property projects. The firm posted a third consecutive quarterly loss on provisions for contracting and property revaluation. It has 6.5 billion dirhams of outstanding debt, of which 2.8 billion had been rescheduled for payment to 2011 from 2009, with the remainder maturing in the long-term.

Dubai realestate

EPG repurchasing units in Palm Jumeirah

Residential and tourism project developer Emerald Palace Group (EPG) is considering repurchasing units of Kempinski Hotel Residences in Palm Jumeirah. There are only 20 units up for sale in the secondary market out of the 244 in the project which made it make the move to buy the units and putting them on rent. The work on the project begun on 2007 and it consists of 244 units, including a mix of high-end suites, residences, penthouses and royal villas. Recently EPG delivered its 100th unit to owners of the development.
The Kempinski Palm Jumeirah Residences range in size from 165 square metres to 1,300 sq m, all including terraces or balconies. The developments consists of a mix of two-, three- and four-bedroom suites and residences, a selection of penthouses and townhouse-style royal villas with their own private pools and gardens. EPG has a strategic partnership with Kempinski Hotels. The developer has commenced work on Emerald Palace Kempinski in Palm Jumeirah.

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Property market on the way to recovery

Dubai’s property market will recover by the end of 2011 as mortgages become easier to obtain and more people move to the city. Dubai, the second-biggest sheikhdom in the UAE, experienced the world’s worst property slump during the global recession, with selling prices falling by more than 50 percent and project cancellations exceeding $300 billion. To sustain itself, Dubai Pearl is relying on $1.5bn paid for apartments in advance and another $500 million that has been committed by Al Fahim Group.
Dubai Pearl is building four 73-story towers connected by a single roof less than a mile from the emirate’s palm-tree shaped man-made islands shaped like palm-trees. The project, which has the same name as the company, will have 20 million square foot (1.9 million square meters) of hotel and residential space. MGM Grand, SkyLofts, Bellagio, and Baccarat are among the six hotels that will have 1,400 rooms. The main structure will be surrounded by an artificial beach and low-rise buildings containing malls and theaters. The project is scheduled for completion 2013.
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Low rents lures people to Dubai

Dubai has become more competitive and attractive for those working in the UAE due to the reduction in residential rentals. Residents moving to Dubai from locations such as Abu Dhabi and Sharjah are most likely reason for a 7.6 percent rise in the emirate’s population last year. Jones Lang LaSalle (JLL), an expert from real estate consultancy Jones Lang LaSalle has claimed, “The major driver for this ‘Dubai Effect’ has been the reduction in residential rentals, which has resulted in Dubai becoming more competitive and therefore attractive for those working in the UAE. “The other component of the ‘Dubai Effect’ is an increase in the number of households, as falling residential rentals are reducing the need for several households to share the same unit. The total demand for residential units is therefore increasing more rapidly than the overall population of Dubai.”

While the increase in demand was certainly good news for landlords, it was important to recognise that it is very dependent upon the level of rentals, with increased demand being driven largely by falling rental prices. Jones Lang LaSalle has said it expects rentals to stabilise in some projects and locations in 2010, but that the overall level of residential rentals will decline further in 2010.

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