Dubai property continues to offer among best yields in world, says Savills

Dubai’s gross residential yields behind only Los Angeles, Moscow and Cape Town, according to latest Savills report

Despite prime residential rents in Dubai falling by five percent last year, the emirate offers up some of the best yields in the world, according to the latest Savills Prime Index” World Cities report.

Dubai and Kuala Lumpur (four percent) saw the highest drops in rents throughout 2019.

The emirate was also the third cheapest city in the world to buy prime property, at $580 per square foot, ahead only of Cape Town and Kuala Lumpur. This was a result of “oversupply and potential renters have a lot of choice and negotiating power”.

“Land-scarce” Hong Kong took top spot ($4,610 per sq ft) followed by New York ($2,510 per sq ft).

However, despite this, Dubai offered some of the best gross residential yields, way above the global average of 3.2 percent at around 4.5 percent and behind only Los Angeles, Moscow and Cape Town.

Apartment and house rents in Dubai remained among the least expensive, according to the index, with both marginally over $1,000 per month, ahead of Guangzhou, Hangzhou, Cape Town and Kuala Lumpur.

The report said: “Globally, one of the key drivers of the market in cities where values are expected to fall is a supply and demand imbalance, including New York, Miami, Dubai and Kuala Lumpur. Hong Kong and Mumbai are the other two cities on the list, both of which are being affected by local politics and economies.”

Dubai’s capital value growth shrunk by almost six percent over the year. This compares to strong growth of 8.8 percent and 6.4 percent in Berlin and Paris respectively.

Source – https://www.arabianbusiness.com/property/440551-dubai-property-continues-to-offer-among-best-yields-in-world

Dubai no longer just a ‘playground for wealthy’ as affordable homes demand soars

Properties priced below AED1.5m are driving transactions in the Dubai real estate market, according to new research

Properties priced below AED1.5 million are driving transactions in the Dubai real estate market so far in 2019, according to new research.

Dubai clocked 18,858 transactions for properties worth up to AED1.5 million each from January until September 30 this year, said Data Finder, the real estate insights and data platform under the Property Finder Group.

Of these transactions, off-plan accounted for 10,989 deals and the secondary market registered 7,869 deals.

Data Finder said the trend is a continuation from last year when 17,009 properties worth up to AED1.5 million each were transacted in Dubai in the comparable period.

“This indicates that Dubai real estate is no longer only a playground for the wealthy but has something to offer the budget-conscious buyer in equal measure. The softening in house prices is steadily making Dubai property more affordable to investors and end-users,” it said.

According to the data, there were 6,888 transactions registered in Dubai for properties valued between AED1.5 million to AED3 million for the first nine months of 2019; 2,196 transactions for properties valued between AED3 million to AED5 million; 726 transactions for properties valued between AED5 million to AED10 million; and 520 transactions for properties worth more than AED10 million.

Off-plan accounted for a bigger share of transactions for properties below AED3 million while secondary market sales contributed a far bigger share in deals for properties worth AED5 million and above, the statistics showed.

“This suggests that both investors and end-users have a preference for less pricey off-plan projects backed by post-handover payment plans,” it noted.

Off-plan sales in the year to end September have already crossed the tally for the comparable period in 2018 — 16,066 units against 13,003 with volumes up 23.6 percent year on year.

“There are many units set to be completed which fall within the affordable category, therefore when they become available in the market, we should expect to see sales activity in the secondary market continue to increase over the next year,” said Lynnette Abad, director of Data and Research, Property Finder.

Dubai Hills Estate has emerged as the frontrunner for off-plan sales this year, with 1,700 transactions registered, followed by Downtown Dubai.

Established communities saw higher demand for ready units, with Business Bay ranking highest at 1,036 sales in the secondary market.

Source – https://www.arabianbusiness.com/news/431329-dubai-no-longer-playground-for-wealthy-as-affordable-homes-demand-soars?fbclid=IwAR0s-SHwVMXdJmODIyh8PcyOl-OpcEV-OvUPG_8zSADqnuO1qFkwImAsOGQ

Dubai real estate committee has clear agenda

Key will be creating a ‘vision’ for the major projects Dubai needs over next 10 years

UAE properties provide higher rental yields than New York, London and Hong Kong

Dubai properties offer rental yields of 7% – higher than its international counterparts

UAE properties continued to provide high rental yields despite sales prices and rents softening in the first half of the year, according to a report by real estate listings portal Property Finder.

Dubai properties consistently offer more than 7 percent in rental yields on average, which compares favourably with other major cities. Average rental yields in New York stand at 2.9 per cent, London 2.7 per cent, Singapore 2.5 per cent and Hong Kong 2.4 per cent.

“Despite a sustained contraction in prices, Dubai still holds its own as an investment hot spot with attractive yields and new legislative initiatives to further entice investors and companies,” Lynnette Abad, director of data & research at Property Finder, said in a statement on Tuesday.

Dubai Silicon Oasis apartments provided the highest gross rental returns in Dubai at 9.5 per cent in the first half of the year, compared to 9.2 per cent a year ago.

New communities such as Meydan and Damac Hills also offered gross rental yields at 9.3 per cent and 8.9 per cent, respectively.

Rental yields are calculated by taking a property’s rental income and dividing it by the purchase price. Landlords usually achieve higher rental yields from apartments than villas and make more profit by renting studios than large apartments.

Established communities that continue to offer compelling returns for buyers include International City and Dubai Sports City, both of which offer gross rental yields of 8.4 per cent, and International Media Production City and Arjan, both at 7.6 per cent, the report said.

Among villa and townhouse communities in Dubai, Town Square offered the highest gross returns (7.8 per cent) in the first half of 2019, followed by The Springs (6.6 per cent), Reem – Mira (6.4 per cent), Mudon (6.3 per cent) and Jumeirah Village Circle (6.2 per cent).

Luxury villa communities such as Palm Jumeirah Signature Villas, Palm Jumeirah Garden Homes, Emirates Hills, Jumeirah Islands and Mohammed Bin Rashid City offer smaller yields, ranging between 2 to 4 percent, Property Finder found.

In Abu Dhabi, Al Reef leads in terms of gross rental yields for both apartments and villas or townhouses – at 8.5 per cent and 6.7 per cent, respectively.

Apartments in Al Ghadeer come second, with rental yields of 8.3 per cent, and Al Raha Beach at 7.2 per cent. Villas and townhouses in Al Raha Gardens, as well as Golf Gardens, are also popular with those looking to secure rental income.

The report also highlighted rental returns in Northern Emirates, with apartments in Ajman’s Emirates City providing the UAE’s best gross rental yield at 11 per cent and Ajman Downtown offering 8 per cent. Al Hamra Village in Ras Al Khaimah also provided apartment buyers with robust rental returns at 9 per cent, the report said.

Meanwhile, Ajman’s Al Mwaihat (6 per cent), Al Zahraa (4.9 per cent) Ras Al Khaimah’s Al Hamra Village (5.2 per cent) rounded up the top three list of best gross returns in villas.

The UAE property market slowed in the wake of a drop in oil prices, as well as ongoing concerns about an oversupply of properties. Experts have forecast a recovery in Abu Dhabi, however, on the back of a new immigration regime offering long term visa for investors, the Dh50 billion Ghadan 21 initiative and changes to the emirate’s freehold property law.

– Source: https://www.thenational.ae/business/uae-properties-provide-higher-rental-yields-than-new-york-london-and-hong-kong-1.903183

Dubai property is ripe for shared experiences

Whether it be co-living or co-working, it is shaping real estate development

China’s appetite for Dubai property grows amid strengthening of Sino-UAE ties

Downtown Dubai, The Greens and International City are ranked as top three areas for investment

A large number of Chinese people are investing in Dubai’s real estate market due to strengthening of ties between the UAE and China and implementation of the Belt and Road Initiative and other developments, according to a property consultant with Coldwell Banker UAE.

Xiaoyun Du said that current trends in both the Chinese stock market and its property market, both of which have been experiencing rapid growth in recent years, have encouraged upper-middle class Chinese nationals to invest in overseas markets, including in Dubai. Depreciation of the yuan, as well as the high rental yields on offer in Dubai, are other factors that are influencing Chinese investors, Ms Xiaoyun said.

Using data from Dubizzle, she identified Downtown Dubai, The Greens and International City as the three most popular areas for Chinese investors to buy ready properties, whereas Dubai Creek Harbour, Meydan and Madinat Jumeirah Living top the areas in terms of off-plan sales.

“Location, annual yield and selling prices are the three of the key factors considered when making purchasing decisions,” Ms Xiaoyun said.

In Downtown Dubai, the average price of resale properties is between Dh1,700 and Dh2,200 per square foot, which is equivalent to one quarter to one-sixth of the selling price of real estate in Downtown Shanghai, she said.

“For Chinese investors, this price for a fitted flat with a free parking in the heart of Dubai is very cost-effective. The yearly yield in Downtown Dubai is around 6 per cent to 7 per cent, slightly lower than the annual average yearly yield of 8 per cent in Dubai, but because of the above two advantages, Chinese buyers accept this.”

The Greens is another popular choice for Chinese investors due to its proximity to Dubai Internet City and Dubai Media City. The average selling price within The Greens is between Dh1,200 and Dh1,500 per square foot and average yields in the community are around 8 per cent.

International City is close to Dragon Mart, the retail and wholesale development that has become one of the biggest hubs for Chinese traders in the Mena region. The average selling price in International City is Dh700 to Dh980 per square feet, meaning properties are more affordable, and it offers some of the highest rental yields in Dubai of 8 to 9 per cent, Ms Xiaoyun said.

In off-plan properties, Dubai Creek Harbour is a new development by Emaar Properties and Dubai Holding, and Chinese investors have already become the number one investors in the area. Last year, master developer Emaar Properties announced plans to build a major ‘Chinatown’ retail and leisure area within the six square kilometre development.

“Emaar’s development track in Dubai, including Burj Khalifa and whole Downtown area, instills confidence in Chinese nationals considering investing in projects by the developer. Besides, based on their investment experience in major cities in China, investors are confident that such ‘city hub’ developments will provide good returns in the near future.”

Investments by Chinese nationals accounted for Dh1.7 billion in the first three quarters of 2018, making them the sixth-most active buyers of property, according to the Dubai Land Department. Dubai is targeting Dh1bn of Chinese real estate investments in 2019.

The number of Chinese expats living in Dubai has increased by 53 per cent over the past five years, with around 230,000 Chinese nationals currently living in the emirate and around 4,000 Chinese companies operating.

Figures released by Dubai Tourism yesterday also revealed that Chinese visitor numbers increased 11 per cent in the first six months of 2019. China was the emirate’s fourth-biggest market for tourists, welcoming 501,000 overnight visitors from China.

Ties between China and the UAE have strengthened since the visit of Chinese President Xi Jinping in July 2018. Sheikh Mohamed bin Zayed, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, also visited China last month. During his visit, a raft of new trade deals between the two countries were announced.

– Source: https://www.thenational.ae/business/china-s-appetite-for-dubai-property-grows-amid-strengthening-of-sino-uae-ties-1.899698

Dubai third most affordable city for prime property

Prime residential property prices in Dubai fell 1.9 per cent in the first half of the year.

Dubai ranks as the third most affordable major global city for purchasing prime residential property, according to the findings of a new survey by Savills.

Savills’ World Cities Prime Residential Index shows that Dubai property prices have dropped over the past five to ten years. This means that investors willing to hold property as an investment for a longer period of time can take advantage of attractive yields. In-house Savills research into prime residential rental yields, pinpoint Dubai as the fourth best global hub for returns on investment (4.6 per cent).

“It is a good opportunity for domestic and foreign investors to look at Dubai. Firstly, because the time is right as it is far more affordable to purchase prime residential property now due to lower transactional costs and overall lower prices when compared to other major cities. Investors are paying less for top class specifications. Secondly, strong rental yields mean that long-term investors could generate robust annual returns when letting out property in the city,” said Swapnil Pillai, associate, Research Middle East at Savills.

Prime residential property prices in Dubai fell 1.9 per cent in the first half of the year due to an oversupply in real estate market that has been steadily contracting since mid-2014 as foreign investor interest cooled. Prime market prices declined 19.8 per cent in the past five-years to $600 a square foot “due to high levels of new build stock and global economic uncertainty,” the Savills report said. Only London (down 18.1 per cent) and Moscow (down 15.1 per cent) reported similar price declines over the five-year period.

According to Knight Frank’s recent Wealth Report, Dubai is the most affordable market for luxury property market among the world’s top 10 cities as the average price declined 84 per cent from its peak level in the last five years. Average prime property price fell 3.4 per cent from $6,966 per square metre in 2017 to $6,729 per square metre last year, making the emirate’s property cheaper than London, New York, Miami, Hong Kong, Singapore, Paris, Berlin, Shanghai and Sydney. Analysts forecast that the prime property prices will witness further softening in 2019 amidst increased supply and overall softening in real estate market and weaker economic background.

Real estate consultancy, JLL, noted that with residential sale prices falling at a slower rate than rents, the UAE’s property market is likely to see an increasing number of end users buy properties rather than rent them. According to a Q2 report from JLL, rent prices for apartments fell by approximately 11 per cent, while sales prices fell by about nine per cent compared to the same time period last year.

“It is transparent that capital values in Dubai have not grown at the same rate as other global destinations over the past 10 years, but that is not to say that the next 10 years will mirror this. In Dubai, demand is still strong; however, a mismatch of supply and demand has compressed prices. As supply/demand balances out over time, prices will adjust accordingly, so investment towards the bottom of the cycle could be a shrewd move,” it said.

Price growth across the world’s leading prime city housing markets has continued to slow during the first half of 2019, rising by just 0.4 per cent, taking the annual growth to 0.7 per cent. This compares to an annual increase of 5.1 per cent in the year to June 2018.

“There are a number of reasons why the prime residential markets in global cities are seeing a slowdown, with government policy, the cost of money, increased supply and global economic uncertainty all playing their part,” said Sophie Chick, head of Savills World Research. “Despite this, we do not expect significant price falls across the index, but that growth will remain flat or experience small increases in value in the medium term.”

The latest data from Savills World Cities Prime Residential Index shows that Berlin and Paris have seen stand out growth for prime residential property of approximately four per cent over the last six months and eight per cent over the last year. Both markets have low supply levels coupled with increasing demand from domestic and international buyers.

– Source: https://www.khaleejtimes.com/business/real-estate/dubai-third-most-affordable-city-for-prime-property

Warren Buffet’s real estate firm establishes operation in Dubai

Berkshire Hathaway HomeServices Gulf Properties will represent properties valued at AED3m and higher from individual sellers

Dubai has become the fourth overseas market for famed investor Warren Buffet’s Berkshire Hathaway Home Services real estate brokerage following a deal with Gulf Properties.

The firm – which already has a presence in London, Berlin and Milan – will initially focus on Dubai before extending to Abu Dhabi.

Berkshire Hathaway HomeServices Gulf Properties’ new CEO, Phil Sheridan said that it firm will represent properties valued at AED 3 million and higher from individual sellers.

“The price range will definitely be broader when we are selling on behalf of developers,” Sheridan told Gulf News.

In the interview, Sheridan said that the company will focus on Dubai’s long-term prospects.

“It will not be about us only trying to get US buyers interested in Dubai or Abu Dhabi,” he said. “There were 16,000 overseas buyers acquiring property in Dubai between January to June 2018 for $10 billion. There will be more of them and that’s whom we will target.”

The firm, which was founded in 2013, boasts 1,450 offices in the United States and approximately 50,000 advisors.

Sheridan added that he believes Dubai’s “over-brokered” market may see a wave of consolidations.

“I see the bigger names in the business getting bigger,” he said. “While the number of agents active in the market could remain the same or go up, the number of brokerage businesses is going down. There is no way that many of them can sustain the cost of running a business.”

In November 2018, Berkshire Hathaway’s Gino Blefari said that Dubai was one of a number of international markets the firm was exploring, which also included Vienna, Mexico City, Hong Kong and Tokyo.

– Source: https://www.arabianbusiness.com/news/418868-warren-buffets-real-estate-firm-establishes-operation-in-dubai