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Dubai among top 3 places to live for global executive nomads

 

 

 

 

Lisbon tops the table of the best locations for an executive nomad to live, according to new research released on Wednesday by London-based real estate consultants Savills, with Miami featuring second and Dubai third on its index.

The Savills Executive Nomad Index ranks 15 destinations for long-term remote workers. All either have a digital nomad visa programme, or equivalent, or in the case of the US and European countries, are already part of a large economic bloc that allows free movement of people for living or work.

 
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WhatsApp Down In UAE? Netizens Report Outage In Services

They offer favourable climates year-round, high quality of life and have established prime residential markets. The locations are assessed in terms of internet speed, quality of life, climate, air connectivity and prime residential rents.

 
 
 
 

Paul Tostevin, head of Savills World Research, said: “The modern executive nomad – a distant cousin of the freelance creative working from a cafe in Bali or Costa Rica – owns a villa in the Algarve or a condo in Miami, attends Zoom calls from an airy home office, and hops on a flight back to London, New York, or Geneva for the quarterly board meeting”.

“Provided travel connections are good and high-speed internet is reliable, individuals and families are motivated to relocate and are placing a greater emphasis on health, wellness and overall lifestyle,” he added.

Lisbon tops the ranking thanks to Portugal's high quality of life. Low pollution and a favourable climate are advantages. Lisbon also offers strong physical connectivity, thanks to a well-connected international airport.

Ricardo Garcia, head of residential, Savills Portugal, said: “Tech executives and entrepreneurs are also drawn by Lisbon’s burgeoning status as a tech hub. Real estate costs are low, and there is a strong local talent pool. Companies are moving their headquarters to Portugal. The area is becoming more and more international. I don’t see Lisbon or Portugal slowing down any time soon.”

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Miami is second, a global gateway city, but with a warm climate and beaches, it has grown in appeal as a remote working destination in the US. It has plenty of big-city benefits, such as very good air connectivity, good digital infrastructure, and a strong prime rental market, whilst offering a comparatively good quality of life, Savills said.

 

Third place Dubai tops the index for air connectivity, reaching over 100 countries with more than 240 destinations.

“Remote working enabled business owners from abroad to make Dubai their main hub,” says Helen Tatham, head of residential community sales & leasing, Savills Dubai. “In 2020 rents and sales volumes saw increases not witnessed since 2014, driven both by existing renters who wanted to make Dubai their permanent home, and by an influx of new residents.

“UK nationals have long favoured Dubai for holiday and work, but the market also benefited from new demand from French, German, Swedish and Swiss buyers,” she added.

 

 

source- www.khaleejtimes.com

 

What’s on the wish list for Dubai’s luxury property buyers?

 

 

 

 

 

Mask mandates and social restrictions may have been dropped for the most part, but memories of early-stage pandemic lockdowns continue to influence buyers’ real estate choices in Dubai, agents say. As more end-users come into the market, spacious homes with easy access to lifestyle amenities are in greater demand, in turn setting new sales records.

“In the post-pandemic era, luxury consumers are now looking for open and bigger spaces as buyers are more focused upon their health and mental well-being. This has led to registering record-breaking numbers in villa sales and rentals, as villas provide world-class amenities within the comfort of one’s own community,” says Neeraj Mishra, CEO of boutique real estate agency Scorpion Property.

 

“With more upscale buildings such as Atlantis, The Royal Residences and Six Senses in The Palm Jumeirah, we will continue to witness an increase in luxury projects as the demand from wealthy investors in this sector is on the rise,” he adds.

Capital values for luxury homes in Dubai grew by more than 44 per cent in 2021, the fastest growth among the world’s top 100 urban markets, real estate consultancy Knight Frank says. The pace has continued over the first quarter of this year, with overall total transaction volumes over the first quarter of 2022 at 19,009, the highest total ever, according to data from real estate consultants CBRE.

“As the world recovers from the Covid pandemic Dubai now stands as a strong, vibrant market leader in world-class luxury real estate provision catering to the very top end of a billionaire’s wish list,” says Richard Crossley, Sales Director at the property agent pH Real Estate, listing factors such as the liberal tax regime and excellent quality of life in a crime-free environment.

 

Golden residence

But recent investor interest also follows quick government action on the back of a successful coronavirus vaccination rollout and a slew of immigration and labour reforms, including a relaxation of visa rules and a path to citizenship.

“Even in crisis, Dubai has managed to create demand for luxury homes and hotel apartments,” says Rizwan Sajan, Founder and Chairman, Danube Group.

“The government of Dubai responded quickly and super effectively in controlling the pandemic and that sent reassuring calm to the money markets of the world, which then in turn brought the attention of the major investors and market movers to Dubai. On top of these, the effective handling of the COVID-19 pandemic over the last two years have made the UAE a more appealing, safe and secured place for global investors – who see the UAE and Dubai a safe place to live, work, conduct business and retire. The latest series of property-linked visa reform has made property purchase more attractive – it comes with a 10-year golden visa, depending on the value of investment,” Sajan says.

Real estate investors may obtain a 10-year-long ‘golden’ residence visa when they buy property worth at least Dh2 million following approval of a new rule by Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, in mid-April.

“Dubai remains dramatically under-priced per square foot in the luxury real estate world compared to London and New York, then the world’s super rich and knowledgeable had to and have to give serious consideration to moving to Dubai,” Crossley says. “Having said that, they expect the quality and presentation they see in LA or London and won’t accept second best, so Dubai’s top end real estate had to up its game in its design, build quality and finish and give these ultra-discerning buyers what they need and expect: the latest home smart systems, top notch security and privacy.”

 
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Image Credit: Supplied

Luxury labels

Developers continue to roll out high-end projects, from serviced residences to partnerships with luxury labels, that seek to tick all the boxes on buyers’ wish lists.

Francis Alfred, Managing Director at developer Sobha Realty, agrees: “Luxury investors now view their dream home as a space that is close to nature – preferring waterfront communities that can provide options between luxurious apartments, beautiful villas, or high-end townhouses. High demand can be observed for areas that can offer a holistic experience, complete with lush green spaces, world class amenities, and a wide array of authentic delicacies, retail centres, and entertainment facilities,” he says. The company’s sales over 2021 crossed $1 billion, setting a new record.

With 60 per cent of work on the 8-million-sq-ft Sobha Hartland now complete, Sobha is looking to launch another mega development this year. The new project, Hartland Sanctuary, is valued at $4 billion and cover a 200-acre area in Mohammed Bin Rashid City.

More recently, Damac Properties announced a partnership with Swiss jeweller de Grisogono, for a necklace-inspired twin-tower development at Safa One on the edge of Safa Park.

 

Similarly, in February, Saudi developer Dar Al Arkan announced the W Residences Dubai – Downtown. As the first standalone homes in association with the upscale hotel brand, the development promises uninterrupted views of the Burj Khalifa.

Andrew Covill, Director at estate agents Henry Wiltshire International, underscores how the pandemic has impacted sales at the top end of the market, from high-quality finishes to multi-functional layouts. “Demand for home offices and separation from family living areas are rising, as are gardens or terraces, as widely reported during the pandemic era. These features are highly important given the time many now spend working flexibly from home,” he says.

At the affordable luxury end, meanwhile, Danube recently launched Pearlz, a new residential project in the Al Furjan area. Besides amenities such as a health club, swimming pools and an events area, the development has a doctor on call and a kids’ day care centre.

Some apartments feature foldable wall-mounted beds so living areas can be converted into bedrooms, in line with demands for flexible spaces. Three-bedroom apartments at the development, meanwhile, have their own private pools as well as three parking spots.

Similarly, Sobha too is looking to cater to changing buyer demands. “Today’s homes need to be versatile, and work to enhancing relaxation and comfort, which is why luxury homes with high-end facilities are gaining preference. Investors are seeking spaces that will further their sustainable living ambitions, while also providing a modern edge through various technological innovations,” he says.

 

Sobha homes may now also include additional, under-the-hood features such as wireless home automation, electric car charging stations, single-stack draining systems and leakage-proof plumbing fittings – in line with the low-carbon lifestyle, he adds.

“Sustainable, eco-friendly houses that contribute to reducing the carbon footprint have become a priority for the market.”

Dubai’s luxury market has certainly been altered by the pandemic – whether we go back to work full-time or not. But while end users will continue to benefit when it comes to opportunity costs, investors may need to do a little more diligence before putting down cash.

Luxury property: Abu Dhabi outlook

“There is a limited supply of luxury properties in Abu Dhabi, especially the villa segment. Given the shortage of availability, and with the growth and investment in Abu Dhabi on the rise, we feel that the outlook is very positive. We’ve seen prices increase steadily over the last two years from a seven-year low in 2020, and we expect this trajectory to continue over the next three years,” says Andrew Covill, Director at estate agents Henry Wiltshire International.

Residential prices across the emirate rose 1.5 per cent in the year to March, with villa prices rising 1.1 per cent, according to property consultancy CBRE. The trend is in line with the strength of the wider market, and with a constricted pipeline – just 200 new units were delivered over the first quarter of 2022.

 

 

source- gulfnews.com

 

Dubai apartment, villa prices surge in Q1 as demand rises

 

 

 

The Dubai property market has started the year 2022 on a high note, with the first quarter producing record-breaking numbers as the total transactions reached 19,009 by the end of March, concluding the best first quarter ever in the Dubai property market.

According to Zoom Property Insights, the residential capital value has grown up to 19 per cent annually as the market is progressing rapidly, thanks to the government’s initiatives, visa reforms, Expo 2020 and the influx of foreign investors during the January-March quarter.

 
 
 
 
 
 
 

Ata Shobeiry, CEO at Zoom Property, believes that after a strong 2021, the market will continue its golden run in 2022 as well.

“A strong 2021 and the promising start of the year is a sign that 2022 is going to produce good numbers for the market. Villas will continue their growth, while based on the double-digit growth in Q1 2022, it can be expected that the apartment segment will perform better than last year,” he said.

“The property market will continue attracting foreigners with its new developments, lucrative opportunities, and investor-friendly policies,” Shobeiry said.

Popular apartment communities in Q1

The apartment sector, which recorded nearly double-digit price growth during the first quarter, registered an overwhelming response from the buyers, increasing average rates to AED 1,098 per square foot.

Jumeirah Beach Residence, Business Bay, and Dubai Marina -- with nearly 16 per cent, 10 per cent, and 3.4 per cent annual price growth, respectively, dominated the apartment market, according to the Zoom Property Insights.

Downtown Dubai, with around 8 per cent growth, and Jumeirah Lake Towers, with 10.5 per cent growth, are other communities that remained popular among buyers during the first quarter. Palm Jumeirah also recorded a massive increase of nearly 22 per cent and remained a most sought after community in Dubai.

Popular villa communities in Q1

Continuing their dominance, villa prices increased by a little over 20 per cent during the first quarter. By the end of March, the average villa price in Dubai was calculated at AED 1,267 per square foot.

Among various villa communities, Arabian Ranches and Jumeirah Islands remained the preferred choice of buyers as they reported a little over 40 per cent annual increase. They were followed by The Lakes with around 37 per cent price growth while Jumeirah Village and Palm Jumeirah (with around 35 increase each) were other popular villa communities in Q1 2022.

Besides them, Meadows, Jumeirah Park, and Emirates Hills also remained popular with buyers with a growth of 34.5 per cent, 33.5 per cent, and 32.9 per cent, respectively.

 
 

 

source- gulfnews.com

 

UAE Golden Visa: A 10-25% down payment on Dh2m property can get investors started

 

Dubai: Planning for a Golden Visa with a Dh2 million property investment. Then try this payment formula.

The down payment needs to be Dh200,000 (10 per cent of the Dh2 million investment value to be eligible for the Visa) and developers’ instalment schemes can take care of the rest. This is what developers are working on and there will be multiple competitive offers coming property investors’ way. The first of these Visa-linked schemes could hit the market as soon as the Eid holidays are over. (The earlier requirement was Dh10 million for a 10-year residency.)

 

If the buyer wants to do it through a mortgage, the down payment would be Dh500,000 for 25 per cent of the investment. “This is beyond affordable, because not all these Golden Visa property investments need only be through cash sales,” said Firas Al Msaddi, CEO of fam Properties. “There are other countries that offer investment schemes for residency – but the UAE’s updated Dh2 million represents an unbeatable value-for-money on a global scale.

Stock-Firas-Al-Msaddi
According to Firas Al Msaddi of fam Properties: “Offplan as well as mortgage buyers, will be far more motivated to keep their property ownership, pay their instalments on time and think long-term about residency in the UAE.”

Affordability mix

Developer and property brokers say that it’s vital ways are found to ease entry for those buyers who do not have the full Dh2 million in funds available for an outright purchase. This is where direct-from-developer schemes are vital, to convince new investors to go through an instalment scheme – and at the same time make sure they have the Dh2 million equity to qualify for a Golden Visa.

 

“Many wanting to sign up for Golden Visas may be new residents in the UAE – and would have to spend a certain time to qualify for mortgages from banks,” said a developer. “This is where developers can offer alternate investment options and speed up the transaction.”

Stock - Masaar from Arada
One of Arada's projects in Sharjah, the 'Masaar'Image Credit: Supplied

2-bedroom apartments to the fore

In the new investment space, two-bedroom units and townhouses could be the ‘gold standard’ for investors. Both formats would – based on current market valuations – conveniently break the Dh2 million mark and there are multiple locations in Dubai that fit the bill. In Sharjah, Arada’s projects have these options and in Abu Dhabi, apart from Aldar projects, investors will be checking out Bloom Living (from Bloom Properties), Reem Hills (Q Properties), and Al Jubail Island.

“The offplan projects are already there – and developers only need to tweak their payment schemes just a little to meet the visa eligibility,” said an estate agent. “Currently, all of the UAE’s main property investment destinations have ready and offplan choices for investors seeking a Dh2 million investment.”

MARKET STABILITY WITH LESS FLIPPING
On both rentals and sales, the Dh2 million Golden Visa schemes will 'enhance' stability for the property market.

"When market is on an upswing, landlords become sellers to realize profits from resales," said Firas Al Msaddi of fam Properties. "The number of eviction notices are hundred times higher than in the past five years, notifying the properties are up for sale.

"On the other hand, tenants are holding on to their existing rented homes as current market rates are often much higher than what they signed up for. With the new Golden Visa rules, many property owners with a visa registered to their properties understand they have to hold on to keep their visa valid, which means more stability for tenants too."

 

source- gulfnews.com

 

Dubai's housing sales smash record on rebound, Russian demand

 

DUBAI

DUBAI'S housing market had its best-ever start to the year, driven by higher demand from local residents and bigger flows from outside buyers including Russians, according to real estate adviser CBRE Group Inc.

Total transactions reached 19,009 in the first 3 months of the year, which "is the highest total ever recorded in the first quarter", according to the CBRE report. The only other period to see higher transaction volumes was the second and third quarters of 2009, when around 33,000 and 23,000 properties changed ownership, said Taimur Khan, head of research at CBRE.

 
 
 

Dubai's property market is recovering from a 7-year slump helped by a combination of factors, including European investors worried about a potential surge in taxes at home and an increase in Russian buyers looking to safeguard their wealth.

Russians have long been big buyers of luxury homes in the glitzy emirate, traditionally featuring among the top 10 nationalities to invest in its real estate. Brokers say they've been snapping up property in recent months as their country faces sanctions over its invasion of Ukraine.

The Middle East business hub has also emerged as one of the favourite destinations for some international firms, including Goldman Sachs, seeking to relocate staff from Russia. "It's international money coming into the market whether it's Russian or from other European countries," Khan said. "But that's focused on the high end and it's not really the driving force behind the bulk of the market. The key segment driving the market is the owner-occupier, where people just decided to commit and purchase."

 
 
 
 

Average home prices climbed 11.3 per cent in the 12 months through March, CBRE figures show. Apartment prices rose 10 per cent on average, while prices of single-family homes, known locally as villas, surged 20.2 per cent, a by-product of the pandemic where work-from-home dynamics pushed many apartment dwellers to seek out more space.

The area surrounding the world's tallest tower, Downtown Dubai and Business Bay, drew the highest average prices overall. Villas on the man-made island of Palm Jumeirah, popular with wealthy Russians, recorded the highest average price on a monthly basis in March.

Despite the latest surge, prices remain far below their 2014 peak. The average price per square foot for an apartment in Dubai is 1,098 dirhams (S$405), while the rate for villas stands at 1,267 dirhams - 26.2 per cent and 12.3 per cent below the peak respectively.

Rents rose 13.1 per cent on average across the city, according to the real estate adviser, with the wealthier neighbourhoods of Palm Jumeirah, Emirates Hills and Arabian Ranches witnessing the biggest monthly price increases in March.

The rental surge is "very, very significant", Khan said. "There is an issue with the availability of quality homes and that scarcity is going to drive up demand" as developers release stock in phases to maximise returns.

"While average prices and average rents continue to increase, we are seeing a moderation in both sales and rental growth rates in the villa segment of the market," Khan wrote. The rising cost of finance and further tightening of payment plans offered by developers will likely lead to that moderation, he added. BLOOMBERG

 

source- www.businesstimes.com.sg

 

Dubai property market rebounds with 83% yearly growth in transactions in Q1

 

 

Dubai property market rebounds with 83% yearly growth in transactions in Q1
 
 

DUBAI: Despite market volatility, the residential market in Dubai witnessed a record first quarter as the total volume of transactions reached 7,865 in March 2022, up 83.4 percent from a year earlier, according to a CBRE report. 

Total transaction volumes in the year to date to March 2022 reached 19,009, the highest ever total reported in the first quarter of any year. 

In the first quarter of 2022, off-plan sales increased by 94.6 percent while secondary market sales were up by 76.1 percent.

Average property prices in Dubai increasing

The report noted that average prices increased by 11.3 percent in the year to March 2022. 

Over this period, average apartment prices increased by 10.0 percent, while average villa prices were up by 20.2 percent. 

At the end of March 2022, average apartment prices in Dubai stood at $30 per square foot and average villa prices stood at $344 per square foot.

Compared to the highs witnessed in late 2014, these rates per square foot are 26.2 percent and 12.3 percent below the peak, for apartments and villas respectively.

In the apartments segment of the market, Downtown Dubai has recorded the highest average sales rate per square foot at $550. 

In the villas segment, Palm Jumeirah recorded the highest average sales rate per square foot at $792. 

Average rents increased

Average rents in the 12 months to March 2022 have increased by 13.1 percent, with average apartment and villa rents increasing by 11.7 percent and 22.5 percent respectively. 

As of March 2022, average apartment and villa rents stood at $21,780 and $64,917 per annum respectively.

In the rental market, the highest average annual apartment and villa rents were found in Palm Jumeirah, where asking rents on average were $53,766. 

 

source- www.arabnews.com

 

Report: 2022 marks a new phase for the real estate sector in Dubai

 

 

تقرير: عام 2022 يمثل مرحلة جديدة لقطاع العقارات في دبي

Dubai – Mubasher: There is currently a huge demand for luxury homes from investors and buyers in Dubai. According to Union Square House, a real estate brokerage firm (USSH)

Since last year, all the luxury apartments have been completely sold out by all the major developers in Dubai; Currently, luxury units are traded at higher prices in the secondary market.

Luxury real estate in the emirate was rarely sold, and Dubai often became a “buyer’s market”; Investors were able to buy at a better price in the wake of the epidemic.

Most investors have adopted a model that allows them to buy during epidemics; Most of them buy small and large units in large quantities in order to get higher return on investment.

As the end of the epidemic approaches, the real estate market is undergoing major changes, and more and more people, especially millionaires, are moving to Dubai with their families to invest in luxury vacation homes and permanent residences.

Gaurav Aitasani, Founder and Managing Director of Union Square, said: “The arrival of millionaires in Dubai is boosting the luxury real estate market. Investors today still expect high returns on their investments, but the main reason for their current investments is the luxury home in Dubai.

He added, “The beginning of 2022 represents a new phase for the real estate sector in Dubai, with the continuing effects of the large fluctuations from increased supply to high demand for luxury real estate.”

The real estate sector in the Emirate of Dubai was able to achieve high growth results in 2021; In addition to hosting the global event “Expo 2020 Dubai”, this is thanks to the economic stimulus packages provided by the government.

See also  The United Arab Emirates has won 169 billion real estate deals in the Gulf region

The Dubai Real Estate Market Annual Report, released by the Dubai Land Department, records that by 2021, the market recorded 84,772 real estate transactions worth nearly 300 billion dirhams, a growth of 65 percent. The number of transactions is 71 percent in terms of terms and value, compared to the missed 2020 year.

 

source- www.dubaiweek.ae

 

In Dubai real estate, oversupply stopped being an issue

 

 

This is ironic, because commentators have played a vital role in the discourse, the outcome of conversations, and affected the confidence of investors at large. However, with the end of the ‘one page’ equation doctrine, it is necessary to examine how these narratives have built up, and how to avoid its obvious pitfalls.

The formula for building a narrative has three essential components regardless of whether prices are rising or falling in order to have explanatory value. One: To say whatever that needs to be said to explain the trend. In an era where prices were sluggish, supply became the easiest variable to attack. Thanks to social media, the cost of framing these messages has dramatically fallen.

 
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An easy narrative

Not only is it low cost, but it is also low risk to committing factual errors. Given that the market was awash with supply, presumably developers (who stand most to lose or gain by building) did not have access to these analytical tools.

Two: once the narrative has been built, it is easy to blame everyone else, from errant developers to insufficient regulation or a combination of both. It is always ‘the other’ that is held responsible, conveniently ignoring that the reason for the moderation in demand had to do with prices rising significantly above replacement value. This is the same narrative that was pushed for tech stocks in the US, which now is in the process of deflating.

Three: the piece de resistance is to nurture, cultivate and mine the loyal supporter, whether it is through sympathy (prices are lower because of suppliers not paying heed) or through analysis, by erroneously reporting the number of units being delivered every year.

 

Analysis is a nuanced skill that, alongside rationality, needs to be developed over time. Sell-side analysts will mostly congregate towards one message in unison: this message then attacks the ethos of the ‘money mind’ investor.

Convenient omission of ‘oversupply’

Those who repeatedly pointed out that supply statistics were a) wrong and b) itself needed further scrutiny because of the variability in quality and delivery were conveniently ignored. When the price cycle changed course, these analysts dropped the emphasis on supply and deployed the fresh narrative of ‘safe haven’ status. While the latter is undoubtedly a fact, it again ignores the facts on the ground: value in real estate gets quantified through a series of systematic variables that start with replacement value (its equivalent being book value when analyzing equities).

Astonishingly, there is hardly any mention of supply in the current analyses, and in some cases, even a paucity of homes available. The pendulum of the narrative has swung from one extreme to the other, indicating an amorphous sense of history. This is not new, but the ‘money mind’ has to put it all together to realize what is missing from the analysis before making an investment decision. The phrase money mind, coined by Warren Buffett is an easy to remember prescription that describes, at one level, a way of thinking about complex issues such as capital allocation, but critically, about a commitment to learning and facing down irrelevant noise.

It is clear that in the current environment, there is bound to be some moderation and, in some cases, even a correction in prices at the top end of the market. The yardstick for such a prognosis has been exactly what was the case in the past: an examination of ‘replacement values’. Where prices have gone significantly above replacement value, theory (and common sense) dictates a gravitational pull downwards.

This is reinforced by rising interest rates and inflation, a strengthening of the dollar, tightening liquidity and other geopolitical variables, all of which will temper demand. Supply, which by its very nature is inelastic, will adjust in time, and liquidity will gravitate towards areas that have been largely overlooked in the current rally. To argue otherwise is to argue for a pastiche of a happy ending, and analysts as well as middlemen who seek to foster long-term relationships will be well advised to pay heed.

 

 

source- www.gulfnews.com

 

UAE real estate market is booming with home loan rates set to rise: Here’s how you can benefit

 
 

Dubai: The property market has evidently proved to be remarkably resilient during the pandemic, but what does this mean to an average investor looking to buy real estate in the UAE – is the time right?

UAE property market growth still soars in 2022

 

The UAE real estate market is expected to ramp up going forward, with the property market already witnessing record-breaking growth since the last quarter of 2021. For instance, the value of property deals in Dubai more than doubled last year and broke a 12-year record for value of sales.

Nearly 80 per cent of property professionals surveyed over the past 12 months are confident that the UAE’s real estate market will grow faster over the coming year, as per a 2022 real estate report published by global real estate brokerage Berkshire Hathaway HomeServices.

During 2021, Dubai recorded over 52,000 apartment and villa real estate transactions, totalling Dh114.2 billion, which was more than the total for 2019 and 2020 combined. Meanwhile, about 15,000 property transactions tallying to a total value of Dh71.5 billion dirhams were recorded in Abu Dhabi last year.

Prices on the rise, but will demand be hit?

With high demand for real estate, prices have expectedly been on the rise too. But Dubai-based property experts evaluate how that hasn’t put a dent in the demand.

 

Analysis from market tracker service Property Monitor shows that January 2022 recorded the highest price appreciation since August 2021, in tandem with monthly transaction volumes growing by 2.1 per cent. Residential segments including villas and townhouses saw a steady rise in demand since 2021.

Insights from global real estate consultant Knight Frank highlighted that villas are projected to account for just 15 per cent of total new stock expected to come to the market between 2022 and 2025. This hinted strongly at the continued outperformance of villas, relative to apartments.

Dubai-based property consultant Core reports that 37,000 residential units, including 5,900 villas were delivered in Dubai in 2021. Estimates made in January 2022 by Core suggested a similar volume of units was expected to come to the market, but revisions would be made based on shifting market conditions.

“The demand trend will continue, and property prices will help boost profits,” said Cyril Lincoln, executive vice president, global head of real estate finance and advisory at Mashreq Bank. “But in the longer run, it could give way to shortages in prime segments while keeping prices elevated.”

PW-190925_cityscape_yardi_web_shutterstock_385815319-1569325404283
With high demand for real estate, prices have expectedly been on the rise too. But Dubai-based property experts evaluate how that hasn’t put a dent in the demand.
 

Where is property demand booming in the UAE?

In Abu Dhabi, Dh4.1 billion in real estate transactions were seen in Yas Island during 2021, with Al Reem Island posting deals worth Dh3.2 billion. Saadiyat Island saw deals totalling Dh2.5 billion, while the Forest Belt Al Jarf project recorded Dh1.1 billion and Khalifa City had Dh915 million worth of deals.

In term of types of houses in demand, the Berkshire Hathaway HomeServices study showed that more than half (55 per cent) of property professionals surveyed said that the pandemic had generated increased demand for ‘starter’ homes.

(A ‘starter’ home or starter house is a house that is usually the first which a person or family can afford to purchase, often using a combination of savings and mortgage financing. It is a compact house or flat specifically designed and built to meet the requirements of young people buying their first home.)

Dubai, often seen as a ‘luxury home destination’, had luxury home sales last year hitting their highest since 2015. A total of 93 homes each worth more than $10 million (Dh36.7 million) were sold as wealthy buyers tapped into the post-coronavirus recovery.

However, the results of the survey illustrated a shift towards purchasing first and ‘primary’ properties (explained below) in Dubai. Demand has grown for most property types, but there was a significant rise for ‘detached’ homes (explained below) and for apartments and flats.

 

(The ‘primary’ real estate market consists of new properties, which include new launches and ongoing projects from the developer. A ‘detached’ house is a stand-alone residential structure that does not share outside walls with another house or building.)

Furthermore, the proximity to amenities is particularly in-demand, with almost 70 per cent of respondents highlighting the metric across the Middle East and neighbouring regions.

How can a home buyer financially benefit from a booming market?

Interest rate cuts in response to the pandemic have led to a fall in the cost of borrowing, with rates falling from 2-2.75 per cent in 2019 to 1.5 per cent in 2021. Mortgage rates also became attractive for investors as the mortgage rate fell from 5.2 per cent in 2019-end to 2.5 per cent in the start of 2021.

However, with the recent rate hikes analysts see mortgage rates touching 4.75 per cent to 5.25 per cent at some point during this year compared to the 3 per cent to 3.5 per cent average available now. When that happens, it would be the highest levels on mortgages since 2018. (Residential mortgage loans contributed about 20 per cent to 25 per cent of residential real estate demand in Dubai.)

WHAT THE LATEST RATE HIKE WILL MEAN FOR MORTGAGE RATES?
Let’s say we see an increase of 1.25 per cent in home loan rates. This will mean increased monthly payments for consumers. Here’s an illustration.

If we took an average first-time buyer loan of Dh1 million, borrowed over a 25-year term, a 1.25 increase would equate to a monthly increase in payments of approximately Dh687.

Although this does not seem like a huge monthly amount, it will add up to a significant loan over a 25-year period.
 

For now, anyone wanting to take out a mortgage should opt for a fixed rate loan, at least in the initial year or two. Unless something drastic happens to the global economy, the immediate future will all be about steady upward march on rate hikes.

finance
Interest rate cuts in response to the pandemic have led to a fall in the cost of borrowing, with rates falling from 2-2.75 per cent in 2019 to 1.5 per cent in 2021.

Subsequently, they should either take on a new variable rate loan when the market softens, or have the option to convert the fixed term to a variable with minimal penalty clauses such as a loan structure

(A fixed rate loan has the same interest rate for the entirety of the borrowing period, while variable rate loans have an interest rate that changes over time. Borrowers who prefer predictable payments generally prefer fixed rate loans, which won't change in cost.)

Average villa service charges – which is the recurring fees paid for the maintenance or upkeep of a property – have also fallen to Dh2.96 per square feet from Dh3.60 per square feet in 2019. Service charges tend to be the largest fixed cost for property and a lower service-charge-to-rent ratio makes property investment attractive as more revenue is retained by the investor or property buyer or owner.

 

Loan-to-Value (LTV) ratios, which compares the amount of a loan you’re hoping to borrow against the appraised value of the property you want to buy, have increased by 5 per cent for all first time property buyers – who can now borrow up to 80-85 per cent of a property’s value as the home loan amount.

This means that you only need to invest 15-20 per cent of a property’s value as a down payment. Higher LTV ratios reduced a significant barrier to entry for first time buyers, therefore opening up a larger pool of local, expatriate and foreign investors and homeowners.

Cheaper options to buy properties boosts UAE real estate prospects

Since 2019, the UAE has become a hotspot for emerging financial technology firms, especially those that have provided cheaper alternatives for UAE residents to own, buy or invest in property.

Research shows that the COVID-19 pandemic has accelerated digital changes in the real estate space as the industry now utilises technology to make real estate more accessible and affordable, particularly due to the significant fall in prices and costs brought about by the pandemic.

There are now different platforms available to partly own property in the UAE, like SmartCrowd, Stake, among others, wherein investors can utilise a real estate investment platform (REIP) to invest in a variety of real estate opportunities using a crowdfunding model, where your share of ownership is proportional to your investment.

 

These crowdfunding platforms allow local and international investors to earn rental income from properties with the flexibility to sell the shares in their properties for potential profits. The schemes are regulated by the Dubai Financial Services Authority (DFSA).

‘Real Share’, which is the real estate investment platform by Lootah Real Estate Development (run by the above-mentioned SmartCrowd platform), and peer Stake, provides access to various properties at investments starting from between Dh2,000 to Dh5,000.

So as investors, you are able to take advantage of falling market prices by allocating small amounts into REIPs today in order to take advantage of bargains in the market, without taking on too much risk.

Stock - Dubai property
Is buying property a good investment currently?

Verdict: Is buying property a good investment currently?

If you are looking to buy property right now, experts continue to recommend that it is still an ideal time to do so.

 

With home loan interest rates still lower than it will be later in the year, availability of higher loan-to-value ratio, discounted property prices, reduced service charges, attractive property valuation, and incentives like service charge waivers, the real estate sector currently is still a buyer’s market.

Dubai-based real estate analysts believe that the still-low interest rate environment and the availability of mortgages will continue to boost domestic end-user activity, and investors are returning with confidence, supported by recent capital gains.

Demand has picked up because of key decisions by the authorities in recent years, attractive mortgage rates and a shift in demand patterns due to COVID-19, with the residential property price rally not stopping anytime soon, the analysts added.

(The decisions include new programs such as visas for expatriate retirees and the expansion of the 10-year gold visa program to attract foreign professionals to the UAE. These reforms are also expected to support the real estate market.)

These decisions combined have attracted many professional working people from across the world looking to invest in real estate, whether for work or to make the country their long-term home.

Multiple studies show that expatriates are staying on average three times longer than in the past, with analysts adding that this is driving greater demand for real estate investment. So with demand still high, and prices still largely accessible, it is still considered widely as a buyers’ market – at least for now.

 

source- www.gulfnews.com

 

Dubai's non-oil economy surges to 33-month high as Covid restrictions ease

 

Business activity in Dubai's non-oil private sector economy surged in March to its strongest level in 33 months with new orders increasing as pandemic restrictions eased and Expo 2020 created strong tourism demand.

The headline S&P Global Dubai Purchasing Managers' Index climbed to 55.5 in March from 54.1 in February. A reading above the neutral 50 level indicates economic expansion, while one below points to a contraction.

Dubai's index reading is the strongest since June 2019. The emirate's non-oil private sector improved at a rate faster than the average in more than 12 years of survey data, S&P Global said.

“The Dubai PMI moved clear of its previous post-lockdown high in March,” S&P Global economist David Owen said. “The result rounded off another strong quarter in which relaxed pandemic measures and the Expo 2020 have brought increased economic activity and tourism demand.”

 

Businesses surveyed reported increased client demand in March on the back of rising confidence driven by the lifting of Covid-19 restrictions that had pulled back growth at the beginning of the year during the Omicron wave.

Although new business growth accelerated at a sharp pace, it was slightly weaker than the recent highs at the end of 2021.

Output levels in March also expanded at the fastest rate since July 2019, with more than a quarter of companies surveyed reporting an uplift at the end of the first quarter.

Travel and tourism registered strong growth as international tourists flocked to the emirate before the end of Expo 2020 at the end of March. Meanwhile, an increasing number of projects underlined the recovery of the construction sector in March.

"Output growth in both the travel and tourism and construction sectors also quickened to the highest [level] since June 2019, with the latter driven by a strong drive among contractors to complete outstanding projects," Mr Owen said. "Wholesale and retail activity likewise rose to a greater extent than in February."

 

The UAE economy bounced back strongly from the pandemic-driven slowdown in 2021 and the growth momentum has continued this year, boosted by Expo 2020 Dubai. The government’s mass testing and vaccination programme across the country has helped in curbing the pandemic and led to further opening of the economy across the Emirates.

The UAE’s non-oil economy expanded an annual 7.8 per cent in the fourth quarter of 2021, driven by easing of pandemic-related restrictions and travel curbs, the Central Bank of the UAE said in its Quarterly Economic Review.

Last week, Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai, on Twitter said the country's economy grew 3.8 per cent in 2021, well above the 2.1 per cent estimate by the World Bank. The growth exceeded 2019 and was the highest in the region, he said.

The Emirates' gross domestic product growth was also above Emirates NBD's 2.5 per cent estimate for 2021. The lender expects UAE economic output to accelerate to 5.7 per cent this year.

 
Output growth in both the travel and tourism and construction sectors also quickened to the highest [level] since June 2019, with the latter driven by a strong drive among contractors to complete outstanding projects
David Owen, economist, S&P Global

Dubai's economy grew 6.3 per cent year on year in the first nine months of 2021, according to preliminary data from the Dubai Statistics Centre. Emirates NBD estimates Dubai's economy grew about 5.5 per cent for the full year 2021 – an upward revision from its earlier forecast of 4 per cent.

 

With slower global growth, higher interest rates and a stronger US dollar, the lender expects growth of 4 per cent to 4.5 per cent in 2022.

Dubai’s tourism sector has underpinned the emirate's economic recovery, with international visitor numbers in the fourth quarter having reached about 74 per cent of pre-pandemic levels. Dubai was among the first major global tourism destinations to open it borders under strict health and safety guidelines.

Data by Dubai’s Department of Economy and Tourism showed the emirate attracted 7.28 million international visitors last year, a 32 per cent year-on-year growth. In the fourth quarter alone it received 3.4 million visitors.

The Dubai property market also recorded its strongest start to a year, with 12,119 sales transactions until the last week of March, real estate data platform Property Monitor said. This was a 17.7 per cent increase in transactions compared with 2017, which was the previous best start to a year, according to the report.

With a faster uplift in non-oil economy, staffing levels in March also increased for the fourth month in a row.

Dubai businesses were also upbeat last month about the prospects of growth over the next 12 months. The degree of optimism picked up for the second straight month to the highest since December, and was slightly above the average seen in 2021, S&P said.

 
 

source- www.thenationalnews.com

 

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