UAE Property

UAE rents 'more likely to fall in 2009' - senior economist

2009-01-31T15:41:00.002+04:00

Rents in the UAE are likely to fall as the country’s population flows reverse, a senior economist said on Wednesday.“We expect rents to cool off as population inflows slow down,” said Philippe Dauba-Pantanacce, of Standard Chartered in a research note.

The bank earlier warned that rising job losses would inevitably force a number of expats to leave the country, with the majority of the UAE labour force made up of foreign nationals.

Dubai ruler Sheikh Mohammed bin Rashid Al Maktoum on Monday issued a decree freezing rents on properties in 2009 for tenants who renewed contracts signed last year.

However, if rents are more than 25 percent below the guideline figure recommended in Dubai’s new rental index , then the freeze does not apply. This means many expatriates who arrived in the emirate before rampant inflation took hold, face paying substantially more to renew their leases this year.

The formula suggested is believed to be as follows: For rents 26-35 percent below, the increase can be up to five percent.

For rents 36-45 percent below, the increase can be 10 percent, while for rents 46-55 percent below the guideline, an increase of up to 15 percent can be added.

For rents more than 56 percent below the guideline, a maximum increase of 20 percent can be applied. Arabian Business contacted the Real Estate Regulatory Agency for confirmation on the figures but no-one was able to comment.

Dauba-Pantanacce said that there is mounting evidence that rents are more likely to fall than increase irrespective of this new decree.“The introduction of a rental index is a positive development which can bring more transparency to the market,” he added.

Land Department lifeline to help property buyers

2009-01-27T18:58:00.001+04:00

Investors facing cash-flow constraints can approach the Dubai Land Department for rescheduling payments for their properties, a senior government official said.

"Our goal is to maintain the contractual relationship between the two involved parties [developer and buyer] and so the most we can do is allow people an extension to arrange money or reschedule their payments," Emad Eldin Farouq, Senior Legal Counsel.

"Although there have been some cases of payment default, we have not yet terminated any agreement. We are assessing the relationship between the two parties. The administrative circular, which we had released on November 10, 2008, has managed to so far stop unjustifiable cancellations."

A few developers are offering flexible payment options to investors, with the global credit crisis making it difficult for buyers to pay mortgages on time.

Moreover, payment defaults can lead to attachment of the property by competent authorities, or even allow the developer to move court.According to Farouq, the decision of any extension or rescheduling is taken on a case-to-case basis and usually a "reasonable" time is granted to buyers for arranging the money.

The Land Department is also finalising the regulation aspects of laws already introduced – such as Law No 7 of 2006 concerning land registration, Law No 13 regulating the interim real estate registration and Law No 14 of 2008 on mortgages.

Rera and property firm's rates vary by 11%

2009-01-25T22:24:00.000+04:00

The rents detailed in the Real Estate Regulatory Agency's (Rera) residential index vary an average 11 per cent from current numbers compiled by a property services firm.Rents for the first quarter of 2009 compiled by Asteco and the average of Rera's residential rental index show differences in most localities and categories.

According to Asteco, studio apartments in Discovery Gardens can be leased for Dh62,100 per year, one-bedroom for Dh90,000 and two-bedroom for Dh121,500. Rera's index puts the rents at Dh72,500, Dh100,000 and Dh137,500, respectively. Rents for three-bedroom apartments in The Greens are 29 per cent higher than market rates, according to the index. The four-bedroom villas on The Palm are available for Dh495,000 compared to Rera's Dh450,000.

Asked if the tenants could approach the Rent Committee for reduction of their rents if they were paying more than the index value, Bin Hammad, Director of Rera's real estate relations regulatory department said: "That is not possible. We can arrange a meeting between the landlord and the tenant."

According to Andrew Chambers, Managing Director of Asteco, the index is more scientific and much more detailed than the rent cap.

"Although there could be a cross-over between our figures and theirs, the revised versions of the index will become more transparent and realistic," Chambers said. Analysts said as more landlords start registering their contracts on Ejari.com, the online tenancy registration system, the index will increasingly reflect market reality.

Ajman sets up realty authority

2009-01-25T22:21:00.000+04:00

His Highness Sheikh Humaid bin Rashid Al Nuaimi, Supreme Council Member and Ruler of Ajman, has issued a decree to establish Ajman real estate regulatory authority.

Sheikh Ammar bin Humaid Al Nuaimi, Crown Prince of Ajman and Chairman of the Executive Council, issued Decision No90 of 2008 appointing Omar Jawdat Al Barghouthi as Director General of the real estate regulatory authority.
The decree stipulates the setting up of a public authority named the Ajman Real Estate Regulatory Authority affiliated to the emirate's government.The authority will enjoy financial and management independence.

It will approve banking and financial establishments to manage escrow accounts in line with the emirate's legislations.
It will also monitor and supervise owners' associations, checking their accounts and records.

It will aim to regulate activities in Ajman's real estate sector, frame policies and set up a legal framework for the licensing of real estate projects.

The authority will draw up public policies to develop real estate projects, and suggest legislations and systems needed to organise real estate development operations and transactions.

It will stipulate and supervise the legal relationship between developers and buyers of real estate units and suggest means of resolving disputes.

Further, the authority will license real estate developers, and monitor and supervise their development activities in the emirate. It will also keep records of projects and in the real estate project register. Monitoring real estate adverts published in media channels is also part of the mandate.

Emirates Business 24/7January 7, 2009