The annual property and construction industry ladies’ ski challenge has taken place for a fourth year on the pistes of Les Gets in France.
Due to its success this year, the event is planned to run again in 2011. The five-day challenge is now in its fourth year and over 40 competitors took part.
“It has been a success – recession withstanding – and gives women in the property and construction industry the opportunity to network and discuss business whilst improving their skiing,” said Chapman Consulting director Sarah Chapman.
Women of the property and construction industries competed for prizes including Best Technique, Most Improved Skier and Bravest Descent of a Black Run.
Companies represented at the challenge included Team Prosail, Paragon Management, Costalita Apartments, Robert Bird Group, Structuretone, sq-m2, Chapman Consulting and the Royal Borough of Kensington & Chelsea.
Source:http://www.nce.co.uk/5214261.article
The competition is open to all women skiers across the industry who enjoy informal networking, and is organised by Robert Bird Group consultant Lynn Keenan.
Next year’s trip commences on Jan 16 2011 and options on places will be agreed as soon as possible. For further details call 020 7592 8000.
Banks could hold the key to what will happen with Bulgaria’s depressed real estate sector in 2010, it is claimed.
There are concerns that if they decide to start selling foreclosed properties this will lead to prices falling even further.
Along with foreign real estate investors banks have had a major impact on the country’s property market offering low interest rates at a time when home ownership was encouraged.
But the global economic downturn has meant a drop in incomes and led to a rise in loan defaults and foreclosures, according to Address, one of Bulgaria’s leading real estate companies.
The banks have been trying to stay away from an overall policy of foreclosing, but if 2010 proves to be a more difficult year than 2009, banks might change this policy and appear on the market as one of the big players.
‘If banks start selling foreclosed properties in search of quick returns there is a serious risk that the property market could collapse altogether,’ said a spokesman.
According to its statistics, prices in 2009 dropped by 28% on an annual basis, with 47 % of buyers paying in cash, while 22% of deals were financed with bank loans.
The concerns come at a time when analysts are predicting further price falls in the Bulgarian real estate market. According to Colliers International prices could fall by another 10% in 2010 although it predicts that prices will stabilise in the second half of the year.
In 2009 real estate prices dropped by about 20% on average nationwide, compared to 2008 figures, according to Colliers data.
Some analysts believe that there would be an increase in demand prices and meet buyers expectations of finding a bargain. The worst hit sector has been new builds along the coast and in the ski resorts. There are also a lot of so-called distressed sellers who are forced to sell at levels even lower than 50% of values.
Stephane Lambert of Stara Planina Properties reckons that on average prices have fallen by approximately 35%, based on actual sale prices not asking prices. ‘This is important to highlight because many properties are still marketed at pre-crisis prices and there is a margin for negotiating down the asking price,’ explained Stephane.
Source: http://www.propertywire.com/
UK residential property prices rose for a seventh consecutive month in January, increasing by 0.6% but the outlook for the year is flat, according to the latest index to be published.
Mortgage lender Halifax said that prices have now risen 9.9% since the lows of April 2009 and they are up 3.6% on the same time last year.
But the figures show that the price increases are slowing with January’s rise more modest than in any of the previous six months. Halifax also expects prices to remain flat in coming months as more properties are coming onto the market and it has been a lack of supply that has been driving prices upwards.
So although the pace of the recovery in the property market has surprised many commentators and means property values have retraced almost half their August 2007 to April 2009 decline there are now checks on growth.
‘A further increase in the supply of property is possible over the coming months, which would help to curb the upward pressure on prices,’ said Halifax economist Martin Ellis.
The Bank of England’s decision yesterday to put its quantitative easing programme on hold and keep interest rates at the historic low of 0.5% means rates are likely to remain low until the second half of 2010.
‘The marked reduction in interest rates over the past 15 months has, from a low base, boosted housing demand from those with a sufficient deposit to enter the market,’ said Ellis.
Others agree that price growth is likely to be muted. ‘We are sceptical that the marked rises in house prices seen since early 2009 can be sustained given a still far from favourable economic environment,’ said Howard Archer at Global Insight.
‘Future developments in unemployment, earnings and interest rates will be key factors to future movements in house prices,’ he added.
The average price of a house is now £169,777 compared with £154,490 last April. ‘Overall, our current view is that house prices will be flat during 2010,’ added Ellis.
Source: http://www.propertywire.com/
Demand is likely to be the main driver of real estate performance across all sectors in Dubai in 2010, according to the latest analysis.
The Dubai office market is becoming increasingly favourable for tenants as it is witnessing a significant demand-supply mismatch along with falling rentals and increased vacancies, says a new report from consultants Jones Lang LaSalle.
While demand levels are increasing, as both existing and new tenants seek to consolidate and take advantage of better quality space becoming available on more competitive terms, there is not likely to be enough demand to meet the high level of new supply entering the market in 2010,’ says the Dubai Real Estate Market Overview January 2010.
Average vacancies across the City are therefore likely to increase from their current level of around 33% during 2010. One reason is that much of this space is contained in non-core locations that international and regional tenants will not consider. So a two tier market is therefore likely to emerge, the report points out.
Vacancies in single ownership buildings in the most sought after Central Business District locations are currently less than 10%, resulting in selective shortages in meeting certain tenant requirements.
‘The tenant is becoming the ultimate winner as the office market is going through a significant adjustment with more vacancies and cheaper rents on offer. This scenario is encouraging for businesses as it offers multiple options for expansion and relocation as Dubai becomes more competitive office location both locally and regionally,’ said Blair Hagkull, Managing Director of Jones Lang LaSalle Mena.
‘Attractive deals can be found throughout the city’s prime and peripheral areas as rental rates and capital values are hovering at pre-2007 levels,’ he added.
The report also indicates that average prices and rentals in the Dubai residential sector are expected to show more stability in 2010 as the rate of decline has slowed in the past few months. But, while conditions may stabilise in some locations and sectors, the overall market is likely to see a continued decline in average prices and rentals in 2010. The performance of different locations will be more driven by local demand and supply issues.
‘Prices seem to have stabilised over recent months, despite the existing over-supply situation. Stabilisation of transactional volumes is another positive indicator of investor confidence but the lack of housing finance remains a major challenge in Dubai. An improved lending scenario is one of the key factors for a sustainable recovery as the value of mortgages as a percentage of total sales value has dropped significantly during 2009,’ explained Hagkull.
‘With an additional 24,000 units expected to be completed in 2010 and 25,000 units in 2011, there may be an emerging opportunity for both investors and financers in the Dubai residential market as it has already seen a significant level of pricing adjustment in 2009,’ he added.
Rental adjustments were comparatively less in the Dubai retail market than the office or residential sectors but the market is still moving in favour of tenants in 2010. Average rentals have declined by around 29% from the fourth quarter of 2008 to the same period in 2009 and by 13% from the third quarter and the fourth quarter of 2009 on the back of a 15 to 20% decline in retail sales in 2009, the report also reveals.
Several planned projects have experienced delays, which in turn has affected the future supply pipeline. This lower level of future supply relative to planned completions in the office and residential sectors, is providing the retail market with something of a breathing space,’ it adds.
‘This is an interesting time as the dynamics of the Dubai retail market continues to swing in favour of tenants due to falling rents and increased vacancies in some centres. In spite of the cut back in future supply levels, we expect to see an increase in shorter leases, break clauses and rent free periods as we go through this tectonic shift in the market. There will be more and more incentives for tenants due to the shift in power from landlords to tenants. We are also seeing the emergence of a two-tier retail market as occupancy rates in super regional and regional malls remain above 90% as opposed to older shopping centres,’ said Hagkull.
http://www.propertywire.com/
What Burj Khalifa will have impact on other properties Business in Dubai, it cannot be fore-casted now but we haope it will have…! Brief News of inauguration of Burj Khalifa is as following:
“Engineers in Dubai have overcome a range of technical and logistical challenges to meet the opening deadline, which is over a year later than originally planned. The tower was inaugurated by His Highness Sheikh Mohammed Bin Rashid Al Maktoum and coincides with this fourth anniversary of becoming Ruler of Dubai.
The tower became the world’s tallest man-made structure, bypassing 508m Taipei 101, just 1,325 days after excavation work started in January 2004.
In total 330,000m3 of concrete, 39,000t of reinforced steel, 103,000m2 of glass and 15,500m2 of embossed stainless steel have been used in the building which to date has taken 22M man hours to build.
Developer is Emaar, architect is Skidmore Owings & Merrill and contractor is a joint venture of Samsung, Arabtec and Besix. Consultant Hyder acted as the developer’s engineer.
“The building represents engineering application at its finest and Hyder Consulting is very proud to add this project to its heritage of world class construction feats on one of the world’s most prestigious developments,” said Hyder Consulting regional managing director Wael Allan.
Source:http://www.nce.co.uk/5212402.article”
Giant investment funds are poised to start buying Japanese property in the first half of next year when prices are expected to be at rock bottom, it is claimed.
Global investors including Carlyle Group, Blackstone Group and Lone Star Funds are still waiting for prices to drop a bit further, according to Ben Duncan, managing director of CB Richard Ellis Japan.
‘The market is steering toward big, opportunistic funds. They’re waiting for prices to fall further. At the moment they are not seeing as much distress as they hope for. But as the market starts to bottom out they’ll probably start to buy,’ he explained.
Commercial land prices in Japan fell 4.7% to a three-year low in 2008, with the decline increasing to 5.4% in the three largest metropolitan areas of Tokyo, Osaka and Nagoya, official government figures show. Office vacancies in Tokyo’s main business districts increased for the 17 month in a row in June to 7.25%.
Blackstone has already said publicly that is plans to invest in Japanese property companies that need financing.
One factor that is hampering a move forward is that Japan’s banks have been lenient in allowing companies to refinance borrowing rather than forcing them to liquidate assets, Duncan said.
‘That’s held back recovery in that the market hasn’t corrected. If there had been more pressure we’d see more transactions and investment from all sectors,’ he added.
Firms like Barclays Capital are indicating a turnaround is not far off. ‘Pessimism has been retreating recently with the re-emergence of office contract and condominium sales transactions,’ it said in a statement.
Other factors are being taken into account. Tokyo, for example, recently overtook Shanghai as Asia’s most attractive city for real estate investment, according to the Urban Land Institute and PricewaterhouseCoopers LLP.
‘What we’ve seen in the last three quarters is a lot of upgrading. Companies in good shape are taking advantage of the market to move into more attractive quarters at no increase in cost,’ Duncan said.
Source: http://www.propertywire.com/
Asian investors, particularly from China, are setting their sights on property in Australia as it has not been as severely hit by recession and is regarded as a safe place to invest.
Richard butler, senior managing director of CB Richard Ellis International Investments said there were lots of bids for a prominent building in Sydney recently.
His firm has calculated that overseas investors accounted for 12% of total transactions in Australia in the first half of this year, up from around 9% in 2008.
‘What they are seeing is Australia probably is a safer bet, where returns will be more secure and safe because of the transparency. Whereas no one wants to go into markets that are decimated like Singapore at the moment which is suffering from massive oversupply,’ Butler explained.
The fact that values have not been decimated in Australia adds to the feeling of safeness. According to Jones Lang LaSalle prices for commercial properties in Sydney fell some 15% in the first quarter of 2009 from a year ago, but that is compared with a more than 30% drop in Shanghai, Hong Kong, Tokyo and Mumbai.
It also says that rents fell around 25% in Sydney while Singapore, Tokyo and Mumbai saw more than a 30% drop in the first quarter.
Recently in the commercial sector those investing include Woori Investment from South Korea, and Japanese builder Sekisui which is to develop homes in Sydney and Brisbane. The Chinese are active in the residential sector too. ‘There is a fair bit of movement, with wealthy Chinese having their children study in Australia,’ said John Bongiorno, director for real estate agent Marshall White based in Victoria.
The company is considering opening an office in Shanghai or Beijing to attract more buyers. ‘They are attracted by the safety of the country, by the high standard of education we offer, by the high standard of living we offer,’ he said.
Analysts said the timing may be good for foreign investors to enter the market as many local players are currently inactive due to tight credit. David Green-Morgan, Asia Pacific research director for DTZ, said that he expects transactions to pick up as foreign investors are likely to rush and get the best deals.
‘They are coming in at this point of the cycle as they see opportunities. They will be happy to hold for five to eight years and then they’ll get out when the market gets back up,’ he added.
Source: http://www.propertywire.com/
Property vultures are circling to pick the bones clean of deals as the US property clock has wound prices back to the same levels as they were in 2003, according to financial researchers Standard and Poor’s.
House prices fell 18% in April in S&P’s 10 and 20 city indices.
Commercial property has crashed alongside home prices registering a 20% decline, with market expectations of another good way to go – perhaps another 20%.
“Now that the meltdown has happened, the new emerging market is the United States,” Tom Shapiro, president of real estate investment firm GoldenTree InSite Partners, said at the Reuters Global Real Estate Summit in New York.
“I think there’s going to be the best opportunity to make money in the last 20 years in real estate in the US.”
GoldenTree InSite pulled the plug on US real estate investment in 2006 and focused attention and cash on Brazil instead, with investment in residential and office properties.
The company has a war chest of about a $1 billion to sink in to property, and is ready to return to the US market and take advantage of the right projects that need or will need money when they come up short.
“We are just at the point now where we are seeing some very interesting entry points on certain transactions,” he said.
New York-based GoldenTree InSite invests institutional funds.
Shapiro said his firm likes big cities, such as Los Angeles and New York where struggling commercial real estate markets tend to rebound strong.
“San Francisco right now is a pretty interesting place to think about because San Francisco is a very diversified economy,” he said.
Meanwhile, residential property prices fell – but the rate of decline is beginning to show signs of holding steady fueling hopes that the market will soon hit rock bottom.
“While one month’s data cannot determine if a turnaround has begun; it seems that some stabilization may be appearing in some of the regions,” said David Blitzer, chairman of the committee in charge of S&P’s index. “We are entering the seasonally strong period in the housing market, so it will take some time to determine if a recovery is really here.”
Phoenix posted the largest annual decline of 35.3%, while Las Vegas slipped 32.2% from last year and San Francisco fell 28%. Denver, Dallas and Boston posted the best performance in terms of annual declines, down 4.9%, 5% and 7.7%, respectively. On a month-on-month basis, Dallas saw 1.7% gain from March while Las Vegas lost 3.5%.
Source: http://www.nuwireinvestor.com/
There has been a rise in demand for residential units in the area known as ‘New Dubai’ during the second half of 2009, according to a new report from Asteco, a property services company.
Apartment and villa sales prices across Dubai decreased by an average 15 per cent and 13 per cent respectively, representing a significant slowdown in negative growth compared to the quarter-on-quarter decline from Q4 2008 to Q1 2009, the report said.
However, Palm Jumeirah, which along with the Dubai Marina forms the area known as ‘New Dubai’, has reported a surge in sales prices during the second half of the year, the report claims.
It was found that villa prices rose by 20 per cent and apartment prices have risen seven per cent. With more properties being handed over, owners are reluctant to sell at a reduced cost and are therefore leasing their units, Asteco claim.
This has led to apartment and villa rental rates on the Palm dropping by 12 per cent and 25 per cent respecively.
“The last few months have also seen distressed sellers being flushed out the market, with remaining owners now refusing to drop below a certain price level,” said Vincent Easton, sales director at Engel and Volkers estate agency in Dubai.
“Increasing numbers of peo-ple are prepared to commute to Abu Dhabi from Jumeirah Lake Towers and Discovery Gardens,” Easton told 7DAYS.
Andrew Chambers, Asteco’s managing director, said the “demand has mostly been for one- and two-bedroom apart-ments and for three- and four-bedroom townhouses” in the ‘New Dubai’ areas.
Source: http://www.zawya.com/
The number of new properties being built is increasing but they are still way below what they were a year ago and the situation is set to result in severe shortages in years to come.
The latest figures from the NHBC show that private sector starts are 36% on a year ago although they have reached the highest point in almost a year.
The warranty and insurance provider received 8,305 applications in June 2009 for builders to start new properties in the combined private and public sectors, the greatest number since July 2008, when 9,530 applications were received. However, private sector new starts (excluding housing associations) were down 36% on the same three-month period a year ago (20,973).
There is a significant fluctuation in the number of applications across the UK, with figures for some regions, including Greater London and Merseyside, more than 50% down on a year ago.
A shortage of new build housing will emerge particularly in the South East of England next year, according to the latest Knight Frank residential development review.
New build starts in the region this year are likely to amount to the lowest since the 1950s. When combined with the lack of supply in the second-hard market, caused by the number of potential vendors opting to ‘wait out’ the recession, this could lead to a real shortage of properties for sale next year.
‘Developers who opt to move now may be in the position of being able to sell into an undersupplied market next year. However, they need to be very cautious, opting to deliver in-demand family housing into those areas with resilient housing markets. Elsewhere, a greater number of forced sales could undermine this strategy,’ said Jon Neale, head of development research at Knight Frank.
The property consultants have noticed a growing interest from residential developers and housebuilders for well located locations. This is in complete contrast to the last quarter of 2008 where there seemed to be little appetite for any form of speculative land acquisition.
But the report suggests that, given the current constraints in the market, it will be difficult for the required delivery levels to be achieved unless new models are found for regeneration schemes or more Greenfield land is released for development.
The National Institute of Economic and Social Research warned that it is a lack of available homes that is driving up recent prices increases in parts of the UK.
As a result, the think tank expects the house price slump to persist for another two years.
‘The temporary rise in prices is probably the result of limited supply. There has been talk of stabilisation and some recovery in the housing market, but we don’t think this is the case. We only see growth in the housing market returning in 2012,’ it said.
Source: http://www.propertywire.com/
The United Arab Emirates is leading the way in development in the Gulf region with almost $930 billion worth of projects currently underway, according to a new report.
A study from the Kuwait National Bank says that this amounts to 45% of all projects planned in the Gulf area which amounts to some $2.1 trillion.
The report shows the extent of the boom in development in the region. The value of property construction is four times higher than had been estimated in June 2005 and represents an annual growth rate of nearly 50%.
‘The UAE accounts for by far the biggest share of project activity, totalling around $929 billion and affirming its position as the leading GCC country in attracting capital investment. Some 81% of the UAE projects are in the construction sector,’ the report says.
The report shows that the construction sector dominates in every GCC country while the total value of projects in the UAE is far higher than anywhere else. Although Saudi Arabia has a much larger base of non-construction related projects, some $224 billion which is 28% more than in the UAE. ‘This probably reflects the larger size of the Saudi economy in absolute terms, necessitating a greater degree of industrial diversification,’ the report says.
Also the higher value of non-construction related projects in Saudi Arabia stems largely from the petrochemical, power and utilities sectors. At a combined $127 billion, the value of the Kingdom’s projects in those sectors is about 35% larger than in the UAE.
The overwhelming balance of non-construction-related projects in other GCC countries comes in the oil and gas, power and utilities sectors, with the latter reflecting the region’s growing domestic power needs, the report adds.
Source: http://www.propertywire.com/
Dubai property prices and rents recovered slightly in June, signaling that the worst for the sector may be over, Deutsche Bank said in a report on Monday.
The average house price for apartments and villas rose 6.5 percent month-on-month in June to AED1,285 ($349.9) per square foot, while rents rose 1.1 percent over the same period following a 10 percent fall, Deutsche Bank said in its proprietary price index, which covers 13 locations in Dubai.
“Although monthly data should be viewed with caution given the limited number of transactions, recent numbers tend to confirm the stabilization in the market we saw in May,” said Nabil Ahmed, head of research at Deutsche Bank in Dubai in comments published by newswire Dow Jones.
“This might not be the bottom yet, but the worst increasingly looks behind us,” he said.
The global financial crisis has taken its toll on the UAE’s once-booming property sector with the slump so far wiping an estimated 50 percent off Dubai prices since their peak in August 2008, Deutsche said earlier this month.
“We believe the stabilisation in prices was mainly driven by easing pressure from distress sales and potential remaining sellers now being unwilling to sell at current prices, off 50% from peaks on average,” Deutsche Bank said.
“Our industry contacts confirm that prices have tended to stabilise, even increased in some areas, but the level of transactions/ demand remains very low,” it said.
Deutsche said it still expects property prices to bottom out at the end of the year after falling a further 15-20 percent.
“We continue to see risks of further weakness on the combination of expatriates’ exodus during the summer and new supply flowing into the market in the second half of 2009. However, the worst regarding property prices increasingly looks behind us,” Deutsche added.
The latest report on the Dubai market comes just days after one senior analyst described it as one of the “riskiest” property markets of the post war era.
Saud Masud, analyst at Swiss investment UBS, said problems of over-supply and population shrinkage with thousands of jobless expatriates expected to return home when the schools break up next week, would mean continued pressure on house prices.
“In my view Dubai’s property risk profile appears to be one of the highest in the post war era and while one may debate the potential support factor from Abu Dhabi the fundamental oversupply and population dynamics risks are very much there,” he told Arabian Business.
Source: http://www.arabianbusiness.com/
What is the current situation of properties in Dubai and its surrounding states, you can imagine from the following news:
A new property regulatory authority has been introduced in Ras Al Khaimah giving a new layer of protection to real estate investors in the emirate.
The Ras Al Khaimah Investment Authority (RAKIA) Real Estate Regulatory Agency will oversee the implementation of escrow accounts law fro all freehold development projects, officials said.
Several property developers have already registered their projects with RAKIA RERA, which is similar to the Real Estate Regulatory Authority operating in Dubai, and the new watchdog will now monitor developments with a collective value of AED6 billion.
Developers can only register when their project’s concept design has been approved, which will then allow them to open an escrow account and start selling properties. RAKIA RERA will also oversee the construction by sending out a team of engineers to inspect projects.
‘The escrow account has been implemented to prevent mishandling of construction funds and ensure that investors’ money is spent according to the master plan of the project,’ said Yahia Kambris, general manager.
‘The establishment of the new real estate watchdog is an important step in our efforts to safeguard and protect the interest of investors and reinforce the reputation of Ras Al Khaimah as an attractive and practical investment destination in the region,’ he added.
Among the developers that have registered with RAKIA RERA include Select Group, the developer of Pacific; Manazil Real Estate, which is developing Marbella Bay; Pure Real Estate, developer of Blue Mirage; Stallion Properties, which is developing Santorini; and e-myproperty, developer of Bab Al Badr.
Yes Properties, developer of The Quay, is also currently completing the registration process and will soon open an escrow account.
Several banks, including Badr Al Islami-Mashreq, Bank of Baroda, Commercial Bank of Dubai, Abu Dhabi Commercial Bank and Dubai Islamic Bank, have also signed an agreement with RERA to offer escrow accounts.
Source: www.propertywire.com
The property market in Dubai has undergone a substantial drop in the last few months offering excellent investment possibilities, according to the latest research.
Residential rents fell 23% in the first quarter, with Discovery Gardens posting the biggest drop, while prime office rents declined 18%, according to the analysis from CB Richard Ellis.
Both off plan and finished properties witnessed a sharp drop in sale prices over the last quarter as the number of transactions fell by 60% from the corresponding period last year.
The fall in rents was particularly steep in Nakheel’s Discovery Gardens development, where the average rent for studios and one bedroom apartments fell by 28%.
The exit of speculators from the market would see further interest from real time investors/end users and investment funds entering the market during the rest of the year with the focus on properties which are ready to occupy or expected to enter the market over the next 12 months.
‘In some of the developments prices have already bottomed out, providing excellent investment opportunities for investors,’ said analyst Matt Green.
Many projects currently due to be completed this year are likely to be further delayed and pushed back into next year, the commercial property consultant said. Developers of off plan properties have revised payment plans and in a few cases their prices in order to retain a steady flow of funds for their developments.
In the commercial sector prime office rents in Dubai fell by around 18% on the quarter. Secondary locations with Grade A office buildings, mainly in the freehold locations of Jumeirah Lakes Towers and TECOM, are experiencing a sharp decline in lease and occupancy rates, the research indicates.
The drop in demand for commercial and rental space, following the decline in an expatriate workforce, will have a significant impact on the lease and occupancy rates in all areas of Dubai throughout 2009, it predicts.
A new rental index for Dubai to be published this week is expected to a 30% fall in rents since March for Palm Jumeirah villas and other residential hotspots in Dubai such as apartments in Jumeirah Beach Residence and townhouses in the Springs will show rental falls of 8%.
Source: http://www.propertywire.com/
There is a two-bedroom apartment on the 25th floor of Jumeirah Beach Residence with an excellent view of Dubai’s property market; where it has been and where it is heading.
In February, the apartment’s British owner sold it for Dh1.5 million (US$408,000) to a compatriot, reaping a Dh680,000 profit on what he had paid for it less than two years earlier – a return equal to 44 per cent a year.
Then in mid-March, as the global economic crisis raged on, the apartment’s new owner decided to sell it for a little more than Dh1.43m to a Russian buyer, escaping with a loss of about Dh66,000. That works out equal to a loss of 42 per cent a year.
Since peaking last September, property prices in Dubai have dived, according to data from Reidin.com, a Dubai-based company that has compiled an online database of every property transaction registered with the Dubai Land Department since 1973.
An analysis by The National of the more than 24,000 transactions registered in the past two years reveals that the average property price in Dubai has tumbled about 33 per cent from its peak last September, with prices in the first quarter slipping 11 per cent since the start of this year.
But prices in the first three months of this year were still 12 per cent higher – not lower – than they were in the same quarter last year.
“That is a surprise,” says Ryan Mahoney, the managing director at the Dubai property agency Better Homes.
Mr Mahoney and other property experts predict prices will keep falling for at least the next three months before finding their footing.
In the meantime, they say, the property market is diverging. Where once investors were willing to buy from blueprints, the emphasis now is on finished properties that offer high-quality, affordability and a convenient location close to amenities such as cafes, restaurants and shopping.
As the market has shifted, Mr Mahoney says, buyers are thinking less about whether a property will earn quick profits and instead asking themselves how much they might enjoy living there.
How they answer will reshape the future of the country’s property industry. In the meantime, the continuing slump has troubling implications for the economy. Property and construction still account for about 15 per cent of the nation’s economy and represent the largest source of jobs.
Yet lenders such as the mortgage company Amlak Finance predict more defaults as job losses mount and property prices fall, a trend that will put further pressure on the country’s banks.
Some foresee a vicious circle of layoffs, expatriate departures, slower economic growth and falling property prices.
“We will see a slowdown or contraction in a number of economic sectors, most notably in real estate and construction as projects are cancelled or put on hold,” Monica Malik, an economist with EFG-Hermes, wrote in a March report that forecast a 30 per cent decline in Dubai’s population of construction workers. “The fall in population will further result in weaker demand for housing.”
The Reidin.com statistics are not perfect. Analysts note that the data is only as reliable as the human beings at the Land Department whose job it is to input data on each transaction.
And since registration of property became mandatory in November, the department’s employees have apparently been inundated with owners rushing to register deals dating back as far as 1997. In March alone, the land department registered more than 500 deals that took place before 2007.
The data also probably fail to fully capture the frenzy last year in off-plan sales, in which buyers made down-payments to developers for property still under construction.
If the value of the property fell below their purchase price, many probably walked away from their deals, never bothering to register them.
Nevertheless, the data provide what is probably the most comprehensive look yet at trends in Dubai’s property market. According to Reidin.com’s data, the property craze peaked in April last year as prices were rising at a rate of 43 per cent a year.
Prices continued to rise until September, even as the number of deals dwindled.
Then, after rising 37 per cent in the third quarter from the previous quarter to Dh1,106 a square foot (sq ft), property prices dropped, losing 15 per cent in the fourth quarter and another 11 per cent in the first quarter to an average of Dh839 a sq ft.
The numbers look even worse when adjusted for inflation. The latest official estimate of inflation, from March of last year, is 11.5 per cent. In real terms, then, property prices managed to eke out a 0.5 per cent gain over the past year.
To gain some comparison, Dubai residential prices in February dropped by 7 per cent in inflation-adjusted terms. In the US, home prices fell by almost 19 per cent.
One of the market’s vulnerabilities, property executives say, is that it is driven primarily by foreign buyers and is therefore even more susceptible than others to global economic trends.
One of Dubai’s primary sources of demand, for example, has in recent years come from increasingly affluent Indians. But in September, Indians became net sellers of Dubai property.
That is when panic seized the market, executives said, as widespread predictions of Dubai’s immunity to global economic trends proved to be wishful thinking.
Property owners rushed to sell. But would-be buyers found themselves stymied by a sudden freeze in lending as UAE banks faced a global liquidity crunch that forced the country’s two main mortgage lenders, Amlak Finance and Tamweel, to stop financing new mortgages.
Now, with global liquidity recovering and local banks slowly easing lending restrictions, analysts say buyers are tip-toeing back into the market to hunt for bargains.
They are proving pickier than in the past, agents and executives say. Properties that are still under construction are out of favour. What’s in? “Anything that’s ready,” says Anjili Samtani, an agent at Megabucks Realty in Dubai.
In part, this shift reflects the disappearance of short-term speculative buyers, the kind of investors who bought “unbuilt” properties with only a small cash down payment, without ever obtaining a home loan.
After being driven sky-high by investors eager to own property in the shadow of the world’s tallest building, prices at two properties near Burj Dubai, Old Town and The Residences, have fallen since September by more than 50 per cent.
Likewise, villas on Palm Jumeirah, some of the world’s most high-profile properties, have fallen in value by 44 per cent.
Analysts say there is also a shift among buyers to quality, a move made possible now that more and more developments have been completed.
“Investors are able to look and touch and feel something that previously they could only see in a brochure,” says Blair Hagkull, the managing director of Jones Lang LaSalle in Dubai. “The motivation of an end-user is quite different from that of a speculator. End-users focus on size and views and parking. People are starting to look at who the developer is, who the contractor is. Design issues are becoming more important.”
Some developments have therefore bucked the trend and risen in value. Affordable housing in developments such as Discovery Gardens and International City, for example, has managed to rise in value through the slump.
Properties with prime locations or outstanding amenities have performed even better. Yacht Bay, with views of Dubai Marina Yacht Club, has enjoyed a 55 per cent jump in price.
The Waterfront, one of several luxury developments by Trident International Holdings, has jumped in value by 62 per cent. “The finishing is superb,” says Ms Samtani.
The bluest of the blue-chip properties have lost little of their lustre. The most expensive property in Dubai, for example, remains the luxurious La Reve Tower, where prices remain at roughly Dh2,500 a sq ft even after falling 26 per cent since the start of the year.
But prices at La Reve are still 35 per cent higher than they were a year ago.
This differentiation, property executives say, is likely to determine which developers survive the downturn and which don’t.
“In this process of natural selection, buyers will be killing off the brands of developers that didn’t deliver on their promises,” Mr Mahoney says.
Analysts warn that there is little to keep prices from falling further during the summer slowdown in business activity. “The panic is still there,” says Sharjeel Bijdani, a banker in Dubai who owns four apartments. While transaction numbers improved in February and March, analysts say not to expect any improvement until after Ramadan.
Some also warn that easing mortgage terms could unleash a wave of pent-up selling as buyers obtain financing to pick up bargains.
When the market finally recovers, analysts say, it is likely to be much more robust. The Land Department’s statistics, for example, could help reduce volatility in prices by improving transparency, and the shift from short-term, speculative property investing to long-term purchases by people who want to live in the homes they buy will tend to make prices more stable, they say.
The market’s current malaise, therefore, is helping push Dubai’s urban development into a more mature phase. “This whole move, as painful as it is for everyone, particularly for us,” says Mr Mahoney, “is better for the city in the long term.”
Source: http://www.thenational.ae/
Residential property prices in the UK fell slightly in April putting an end to optimisim that had been created by a small rise in March.
Prices fell 0.4% and the average price of a home is now £151,861 according to the April House Price Index from Nationwide, the country’s larges building society. The price of a house is now 15% less than it was a year ago.
Nationwide had said after the March figures that too much should not be read into the small rise and now it is saying that recent measures announced in the Budget were unlikely to turn things around.
But it said that the extension of the stamp duty threashold might encourage first time buyers and this combined with falling prices should have some kind of effect on the property market.
The building society said the government could have done more to aid the availability of credit. ‘The chancellor announced several measures aimed at boosting the housing market in his Budget,’ said Fionnuala Earley, Nationwide’s chief economist.
‘The scheme for government guarantees for new, high-quality residential mortgage backed securities are welcome and may help to boost the amount of mortgage credit available. However, since the availability of credit is only part of the reason why the housing market is in the doldrums it is unlikely to lead to a swift turnaround in its fortunes,’ she explained.
‘Lenders have already indicated that the availability of credit is less of an issue than it has been, but at the same time expect that the demand for secured lending will fall further. Given the weakness of the economy and the expected further increase in unemployment this comes as no surprise,’ she added.
Earley pointed out that the effects of unemployment would have an effect the property market is very sensitive to income and, as a result, conditions in the labour market are crucial to its performance.
‘That said, the correction in house prices and improved affordability conditions provide a good grounding for the market once domestic and global economic conditions once again become more favourable,’ she concluded.
Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors said the figures were not a surprise.
Source: www.propertywire.com
Many major global property markets recorded positive price growth in 2008 but by the end of the year that had stopped or fallen in 75% of locations, according to a new report.
There were wide variations in performance around the world with Hong Kong showing the sharpest annual drop in property prices with a fall of 24.5%, the Knight Frank 2009 Wealth Report, shows.
While Bangkok saw residential prices rise by 22.5% and overall just under 50% of the locations featured managed to record positive price growth on an annual basis in 2008.
Other real estate markets saw a drastic change from boom to bust. For example, Dubai recorded annual overall growth of almost 11% but property prices fell by 19% in the last quarter of 2008.
The report, which includes new research from Knight Frank and Citi Private Bank, shows that prime property in Monaco is the most expensive in the world costing an average of €55,000 per square metre for the best properties with London and Manhattan in second and third place.
But despite house price falls almost 55% of high net worth individuals plan to increase their exposure to residential property over the next two years.
Global farmland prices started to slip last year on the back of falling commodity prices, but remain more resilient than residential or commercial property. Exchange rate fluctuations mean affordability in some countries has increased for US dollar and euro-backed buyers, despite strong price increases in local currencies.
‘Covering a period of global wealth destruction rather than creation, the report’s annual analysis of prime residential property markets and the behaviour and attitudes of the wealthy has become even more relevant,’ said Liam Bailey, head of residential research at Knight Frank.
‘Even the world’s richest people have cut their discretionary spending and most desirable prime residential property markets have now been affected by the global downturn. Although almost half the locations in Knight Frank’s Prime International Residential Index managed to show a positive overall return in 2008, price growth had either stalled or started to decline in nearly 75% of them by the end of the final quarter,’ he added.
But it is a positive sign that the rich are committed to property despite the gloom, he added.
Source: http://www.propertywire.com/
Contractors in Dubai hope that Saudi projects are more sustainable. Local companies will take the majority of the available work.
Contractors in Dubai have been spoilt over the past five years. Mega projects were launched on a monthly basis and major contract awards were made each week. There was so much work that managers even used to boast that filling order books was easy.
Those days have gone. Real estate projects have dried up. Government authorities have come to realise that if their planned developments will probably never be built, they do not need to build access roads and sewers either. Many of Dubai’s supposedly safe infrastructure projects will start to slowly fade away.
As contractors realise that Dubai just does not have the projects any more, companies are looking elsewhere for work.
Abu Dhabi is the obvious answer, and tender lists now include Dubai-based companies that until recently showed little interest in working in the UAE capital.
Doha is another option, but like Abu Dhabi, the volume of work available is limited. Both markets serve more than 1 million people each, and their populations are also growing more slowly than expected.
Saudi Arabia is different. It already has 23 million people who need more homes and the schools, hospitals and roads that come with them. Contractors hope that Saudi Arabia’s projects are more sustainable and will survive the economic downturn.
There is certainly a lot of work to be done, but will it fill the Dubai contractors’ empty order books? The answer is no. Private development in Saudi Arabia – like in the rest of the world – has slowed as banks and investors get cold feet.
But there is some good news. The government is moving ahead with a raft of projects, and although Saudi companies will take the majority of the work, there will be opportunities for Dubai-based firms. However, compared with the mega projects that were on offer in Dubai, the pickings in Saudi Arabia will be slim indeed.
Author: Colin Foreman. Gulf Bureau Chief
Dubai
The world’s most respected property professional’s organisation is to undertake a global consultation to develop an enhanced regulatory frame work for real estate.
The Royal Institution of Chartered Surveyors aims is to raise professional standards, improve confidence for clients and help secure the accurate valuations that underpin most economic activity.
It wants all members involved in the valuation of commercial and residential property and specialist areas such as rural property, plant and equipment, personal and business property along with mineral asset valuations to have their competence monitored on a continuing basis to satisfy clients, and public authorities that RICS is able to properly regulate its members in a testing environment.
It also wants to introduce an accreditation scheme for RICS valuers which will provide a recognizable ‘kitemark’ covering the method and practice of valuations and require re-accreditation every three years.
The organization said that there is an even greater public demand for measures that ensure that markets and other stakeholders can have the highest level of confidence in the competence and probity of professionals working in key sectors of the economy.
‘The value of property is the key component which underpins economic activity. It is vital that there is an effectively regulated gold standard for valuation across the globe which inspires public confidence in the profession,’ said RICS spokesman Mark Gerold.
‘The economic and social importance of all property assets can not be underestimated especially towards wealth generation in a functioning economy. The current financial turmoil highlights the need for raising standards to ensure a stabilising foundation for future economic development,’ he added.
Source: http://www.propertywire.com/
Dubai will have to deal with the thorny issue of what to do with the projects that have been put on hold.
There are now fewer projects being built than there are on hold in Dubai. This will come as no surprise to consultants, contractors or suppliers working in the emirate.
Since October last year, real estate projects have fallen like dominoes as investors have stopped buying properties and developers run out of funds.
The impact on the construction market has been profound. Some $335bn of projects are now on hold compared with $254bn that are being built. Of those that are continuing, many are progressing using extended schedules and minimal workforces.
But despite the suspensions and cancellations, some projects are still moving ahead, and most Dubai-based contractors are confident that they have enough work to see them through the rest of 2009.
The bigger problem is 2010. According to the data, there is some cause for hope. About $334bn worth of projects are still in the planning stages, and if these schemes do go ahead, contractors will have nothing to fear. The question is, will these projects go ahead?
A lot has to happen for developers to stick to their plans. On the finance side, banks must solve their credit problems, and liquidity needs to return to the market. And on the population side, the number of people in the emirate must continue to grow and tourism numbers remain strong if there is a chance of these projects remaining viable.
To make matters worse, if and when market conditions do become more favourable Dubai will have to deal with the thorny issue of what to do with all the projects that have been put on hold before it can move ahead with new schemes.
Until there is a clear strategy outlining what should be done with these abandoned construction sites, it is unlikely that Dubai’s once white-hot construction market will be able to make a convincing return to form.
Author: Colin Foreman. Gulf Bureau Chief
Dubai
