Real Estate Blog » Dubai Real Esatte

admin — Tue, 24 Feb 2009 22:42:40 +0000

The question of renting or buying property in Dubai is a common one among expatriates moving there. The Dubai Real Estate market has been going through rapid growth and the whole world knows of the massive construction being carried out.

The market in Dubai is dynamic and quite in high demand. Yet there also remains the fact that mortgage payments in Dubai can be prove to be costlier than the monthly rent. Then there are also the experts that saying that the Dubai Real Estate market grew a little too fast and too big for its own good and that it might be time for it to correct itself by going in the opposite direction for a bit.

A very basic answer to this dilemma can be found by asking yourself how long you plan to stay in Dubai, the sort of property you prefer, how soon you wish your capital released, whether you are in for the long run or you want your property to get sufficient rent to help you repay the mortgage quickly. The reason for all this complication is that Dubai Real Estate is going through a transition period right now, which makes things very uncertain.

The last significant advancement in lending was the widespread use of 30-year amortizing loans that came into favor after World War II. Prior to that time, home loans were interest-only, short-term loans with very high equity requirements (50% was most common). This proved problematic in the Great Depression as many out-of-work owners defaulted on their loans. more…

When in 2002 it first became possible for non-citizens to own freehold Real Estate in Dubai the mortgage was quite lower than the rent and the prices of property were also quite reasonable. Those who purchased property at that time are of course quite happy with their decision now. This created a huge demand for property and that sent the prices rocketing up at an astonishing speed. Unfortunately the rise was so rapid that it is not likely to sustain for much longer.

Many people do not realize the risk they take on when they use some of the innovative loan programs developed during the bubble. Exotic financing terms are not exotic anymore. Interest-only, adjustable rates and negative amortization have become so ubiquitous that nobody seems to remember why 30-year fixed-rate mortgages are used. A home should be financed with a fixed-rate conventionally-amortized mortgage and a sizable downpayment. The reason for this is simple stress management: nobody wants to spend the next several years worried about a loan reset or the need for increasing house values or future salary increases. more…

If your stay in Dubai is going to be around 3 years of less then there is no point in buying any property there. Just stay on rent. There are quite a few construction projects that are nearing completion and the availability of ready property is bound to lower the rent. Several of these properties are owned by investors who will want their property start paying back quickly.

And as mentioned earlier the mortgage rates are higher than rental even now and the difference is going to increase once the new properties become available.

What are the local zoning laws? While this may not seem like an issue that will affect you, it is of the utmost importance that you know what kind of development is allowable in your area. You’re likely going to pay a lot of money for your Los Angeles luxury estate, and you want to keep your property value as high as possible. Commercial expansion like office buildings and supermarkets will work against you, while other high end homes will only serve to increase your own house’s cache. more…

So if your stay in Dubai is going to be short-term then there is no point in buying property. Since most experts agree that the market will reverse itself soon if you buy anything now and try to sell it after three years you are likely to make a huge profit. In fact, most indications are that people investing in Dubai property at this time are going to be in a loss after a few years until the lowering of the market again reverses itself.

Prudence: Successful seller financing is as transparent and safe as possible. That means that as the seller, you’ve run a full credit check and you have accurate records relating to the property, including recent improvements and any past property inspections. You should also welcome the buyer’s investigations into the property. When these precede the signing you prevent future arguments about the property. Finally, make sure that the property is fully insured. Skipping these steps is the source of a great deal of grief for many would be seller-financers. more…

You should buy Dubai property only if you are going to stay there for a long time. This way you can choose longer mortgage tenure to keep payments manageable and once you are done you can rent it out and convert the property into an asset. There will be no short-term gain with this approach.

Author Resource:- William King is the director of Dubai Property & UAE Property & Dubai Real Estate Portal, Pakistan Property & Pakistan Real Estate Properties Portal , Wholesale Suppliers Traders Distributors & Manufacturers Directory and Wholesale Canada – Canadian Wholesalers & Dropshippers Directory . He has 18 years of experience in the marketing and trading industries and has been helping retailers and startups with their product sourcing, promotion, marketing and supply chain requirements.

You learn in your economics course that the banks borrow cheaply from the depositor and lend at a higher rate to the borrower and the difference between the two allows them to run a profitable business.

admin — Tue, 24 Feb 2009 21:16:33 +0000

It is a way to make more money from money and sometimes it is not even on paper and is often not even connected to a physical asset. The demand-supply gap will be the larger, the greater the efficiency and credibility of the bank, which in turn will make the business even more profitable. Islamic banking runs on a very different principle.
The first difference which exists between ordinary banking and Islamic banking is that the object associated with the contract must actually exist, be specific and free from all ambiguities and it also must be permitted by the Sharia’h. This implies that the bank cannot lend money to anyone but may make an investment. All features of a Muslim’s life is embraced by the religion of Islam and this includes the way its business dealings and finance are carried out. This means, in effect, that mortgage products are not acceptable for Muslims. In Muslim countries, Islamic banks and religious scholars has thought of a number of ways by which to offer finance and banking which can be permitted by Islamic law. Ijara and Murabha are considered by religious scholars and Islamic banks to be the most suitable methods of finance for the purchase of property in the United Kingdom.
Ijara – In the Ijara method of finance, the financier purchases the property and sells it to the customer for the same amount of money, with the payment spread over a period of time agreed between them. The customer also has to pay rent to the financier over the repayment term. The installment of the purchase is somewhat like the capital payments under a conventional loan, while the interest in the conventional loan is like the rent in the Ijara.
Murabha – In the Murabha method of finance, the financier purchases the property and immediately sells it to the customer at a higher price. The higher price is settled based on the number of years allowed by the financer to the customer to pay the purchase price. The extra sum can be compared to the interest which is charged on a conventional lo

an at a certain rate over the whole payment term.
An ethical dilemma is faced by about two million Muslims in the UK when they want a loan or a mortgage as conventional loans and mortgages all need the payment of interest and ‘riba’ (interest in Islamic law) is not allowed by the Koran.
Under Ijara, the bank will buy the asset you want and you will be allowed to use the asset for an agreed period in return for a monthly payment which covers the bank’s capital. It is a kind of leasing.
In Musharaka (meaning partnership), the bank buys the asset and becomes the legal owner. You pay monthly installments, covering part of the rent and part of the cost of the asset, so that after a pre-determined period, you own the asset itself. Author Resource:- William King is the director of Dubai Burj Dubai Property & Burj Dubai Real Estate, Lahore Real Estate & Property Pakistan Properties , Dubai Estate Agents & Brokers Properties and Dubai Property Developments & UAE & Dubai Real Estate Projects . He has 18 years of experience in the marketing and trading industries and has been helping retailers and startups with their product sourcing, promotion, marketing and supply chain requirements.

A different economy, different parameters, and a different scenario altogether, recession is here and apparently it’s here to stay.

admin — Tue, 24 Feb 2009 21:07:43 +0000

If you are an aged fellow, you\’d know that these calamities come and go, but if you are relatively young (or someone affected by it), you\’d be feeling like a deer caught in the headlights while listening to the news of economic crisis sprawling all over the world.

A recession like situation in US was always on radar when the credit crunch began, and the aftermaths were supposed to be seen in other economies as well. But some economies were considered resilient enough to pass through this phase unaffected. One of these \”thought-to-be\” solid economies was UAE, which thrives on its oil reserves, real estate and tourism.

Not that the earlier estimates were wrong, and UAE economy is deemed to go down with the recession, but then we are living in a global village and you can\’t just detach an economy from those who are having trouble. All things considered, UAE may well be able to put up with the ongoing recession, but this economic unrest will definitely weaken the economy pillars.

Real Estate & Construction:
In past three years, we saw magnificent growth in Dubai real estate market. Properties were sold like hot cakes; mega projects announced one after another, land reclamation projects, world\’s tallest buildings, huge shopping malls and what not. Is it over? You\’d ask. Well, certainly not, however the things (e.g. property flipping) are going to calm down to some extent. Construction will not come to a halt anytime soon but will surely drop (you\’d have been reading a lot about those 25 percent of world total cranes operating in Dubai, a few of these giant machines can have a break now). Same is the case with real estate prices, they will continue to rise but not at that maddening speed.

Financial Market:
Hardly anyone would have suspected it to reach UAE, but the financial crisis that started from US has been spreading like jungle fire. Even now, the situation in UAE is not that dismal by any means, and it\’s unlikely to get that worse (oil exports will keep bringing in the much needed capital, particularly in Abu Dhabi). But the banks and other conventional lenders are already panicked, which has resulted in high interest rates. Unavailability of finance will most likely be a problem that Dubai government has to sort out (Dubai has recently got a huge financial aid from Abu Dhabi).

Tourism:
It\’s not much of a brainteaser for anybody to realize that recession will have a negative affect on tourism industry, especially when most of the tourists coming to the Emirates are from regions that are believed to be the most affected ones (UK, America or Europe). Instead of spending on traveling, people will be looking to save more for tough times ahead. Among all Emirates, Dubai will be hardest hit by this plunge in tourism.

Generally speaking, the picture may not be that rosy in UAE but it will look a lot healthier when judged against the wobbling economies of US or Europe. Author Resource:- William King is the director of Islamabad Property & Islamabad Real Estate , UAE & Dubai Real Estate & Property Portal , Australian Wholesalers & Australia Wholesale Dropshippers Directory and Drop shippers Directory and Drop shippers Products . He has 18 years of experience in the marketing and trading industries and has been helping retailers and startups with their product sourcing, promotion, marketing and supply chain requirements.

Property Market In Dubai: Will The Prices Keep Climbing?

admin — Tue, 03 Feb 2009 21:21:34 +0000

The ever growing demand for prime property has also engulfed the emirates and in the last few years, prime locations in the emirates like Dubai have seen a real estate boom. Considering that Dubai was a highly competitive but low priced market, this real estate boom is the last thing that the government wants.

A lot of experts feel that Dubai is heading pretty much the same way where some of the Asian markets have headed in the past, towards overpricing. The reason for this is pretty simple. There is not enough supply to meet the demand in Dubai.

Post 2002

In May 2002 the crown Prince of Dubai, Sheikh Mohammed bin Rashid Al Maktoom made a stunning announcement which shook the foundations of the real estate market in Dubai. This allowed foreigners to buy freehold property in Dubai. What this did was that it opened new avenues and the market immediately boomed. The tax benefits, business advantages, the continuous rising demand and the lack of supply have also contributed to the steady rise in property prices in Dubai.

4. Choose land with planning permission as trying to obtain it yourself is a long process. Check what the planning permission covers so that you will know whether the type of house you want will be allowed. more…

The Population

Along with the above mentioned factors one should not forget that Dubai is one of the fastest growing populations in the world. The prosperity of the city and the strong trading tradition are also adding to the demand for property. This in turn is increasing the pressure on rental demand and the prices for property. Many experts consider this to be one of the safest markets ever to venture into.

Curbing the rise

There is only one simple way to curb the rising graph for property prices in Dubai and that is to increase the supply. The government seems to have hit bulls-eye this time and has announced a lot of massive projects that will ensure that the market is well supplied for a lot of time to come.

Even simple concepts like comparative rental rates are ignored by bubble buyers, particularly when prices are rising dramatically and such valuation techniques look out-of-touch with the market. more…

The Dubai waterfront mini city near Jebel Ali, the 250 tower Dubai Business Bay are some of the prime properties coming up in Dubai.

These will surely curb the rise and prevent capital values from going too high for some time. But once again, the problem is that there is a lot of time for these projects to be completed and delivered and till that time, the demand will increase manifold.

Where is it headed?

The government has announced and is working towards making Dubai a safe market where money can be invested with a long term goal. It does not want Dubai to become a market dominated by housing options that can swing either way any time. Hence there are continuous and dedicated efforts to keep the supply in line with the demand. There are also talks to price the short term speculators out and to encourage long term investment.

In every asset bubble people will claim the prices are supported by fundamentals even at the peak of the mania. During the Great Housing Bubble, people believed everyone was making two-times their actual income, and that the unstable loan programs developed during the time were innovations that changed the fundamentals. more…

Most experts are waiting for the demand and supply to top out and for a market correction to happen which should set the prices right. If you are planning to take the plunge into the real estate market in Dubai, then this might not be the right time. Wait for the prices to go down or if you are a risk taking person then you can perhaps venture into the real market in Dubai but making sure not to put all your eggs in one basket.

William King is the director of UK Wholesale & Wholesalers Directory, Wholesale Products, Suppliers & Wholesalers Directory, Dubai Property & UAE Property & Dubai Real Estate Portal and Pakistani Property & Pakistan Real Estate Portal . He has 18 years of experience in the marketing and trading industries and has been helping retailers and startups with their product sourcing, promotion, marketing and supply chain requirements.

With the enterprising vision of Sheikh Mohammed Bin Rashid Al Maktoum…

admin — Tue, 03 Feb 2009 21:06:13 +0000

With the enterprising vision of Sheikh Mohammed Bin Rashid Al Maktoum, the prime minister and ruler of Dubai, this United Arab Emirates is bound to scale new heights. The United Arab Emirates formed in 1971 is a collection of 7 states, but unlike its neighbors, Dubai is not blessed with great oil reserves. Instead Dubai is all set in making itself the newest and the hottest destination of the major global investors.

It is the aim of the prime minister of Dubai, to make it the most preferred tourist and business magnet by the end of 2015. The plan aims that Dubai undertakes an all-round development that includes economic development, social equality, justice, security and government excellence.

The real estate market of Dubai is in its nascent stages, it is merely two years old, but investing in a developing market has its own advantages, few of them are as follows.
1. Prices are quite low, as compared to the property prices in other developed market and is thus a great buy.

2. Property is a good hedge to counter the inflation that is emerging in the world economy. In case the interest rate of debt increases, the extra cost can be passed on as additional rent and at the same time the value of property also appreciates.

3. Unlike the stock market that is highly volatile, the rent on property is quite stable, it may fall at times but it can never be nill.

There are many online agencies that offer affordable Spain holiday rentals which mean you need not to pay a very heavy amount as rent for staying purpose. You can avail cheap Spain holidays rental and also enjoy in your desired resorts where you can stay up with your entire family. more…

4. In the same way, property value can never be zero, but you can’t say this in the case of shares.

5. Property has the advantage of both stock and bond, just like a bond it provides a regular rental income and like a stock it provides capital appreciation.

6. The Dubai property is available for global investors to invest, but this is not true in the case of local stock exchange.

When we think about Spain the first things that come into mind are grand music festival for youth, open air theatre festivals, beaches, banana boat rides and night rocking clubs. Spending holidays in Spain is a great idea for those who want to enjoy their holidays to the fullest. more…

7. This is the best time to invest in Dubai, as Dubai is in an economic boom. There have been developments of massive projects such as Dubai land, Palm Island, and also the Dubai international financial centre is about to be completed. In such a scenario there is bound to be an increase in the real estate value.

8. You can also take loan against a real estate property. Today real estate is rated as the best collateral security that is demanded by banks and other financial institutions.

If you wish to climb the Volcano Baru you can go individually or in a group. It is possible to observe the city of Santiago of Veraguas, in a clear day you can even see the city of Puerto Armuelles on the Costa Rican – Panamanian boarder. more…

9. Investing in real estate is also a very effective way of diversification of risk and having a balanced investment portfolio.

10. As real estate investments are tangible, investors have more control over them, like the timing of sale purchase etc. Author Resource:- William King is the director of Dubai Property & UAE Property & Dubai Real Estate Portal: http://www.bayut.com , Pakistan Property & Real Estate Properties Portal: http://www.zameen.com/ , Wholesale Manufacturers & Dropshipping Suppliers Trade Directory: http://www.aidandtrade.com and Wholesale Dropshipping & Wholesalers Suppliers Trade Directory: http://www.dailytrader.com . He has 18 years of experience in the marketing and trading industries and has been helping retailers, entrepreneurs and startups with their product sourcing, promotion, marketing and supply chain requirements.

Original title: “Dubai, The New Choice For Big Players In Real Estate Investments “