5 things to ponder if you plan to borrow in 2018

55% of UAE home-buyers look to finance, a huge leap from less than 20% in 2012

  • The anticipated interest rate hike has yet to come to pass and banks are remaining competitive with very marginal increases in interest rates, according to Propertyfinder Trends
  • Taking into consideration what this means for the homebuyers of 2018, Propertyfinder rounded up five things to keep in mind when considering a home loanThe sharp rise to 55% of buyers financing their home is a sign of maturity in the UAE real estate market, as more and more residents take advantage of low borrowing costs to buy a property.

    Indeed, the pendulum officially swung from majority cash-buyers to most in the UAE buying property with a home loan at the end of 2016, according to REIDIN. In 2012, the percentage of those taking out a home loan was less than 20%. The shift makes for a more stable market (that is, one less prone to speculation) but leaves individuals vulnerable to interest rate hikes.

    Here are 5 things to ponder if you are considering borrowing in 2018:

    1. Home ownership is set to become more expensive. UAE mortgage rates are tied to the Emirates Interbank Offer Rate (EIBOR), which has been stable for years but is set for incremental increases as the United States Federal Reserve ups interest rates. EIBOR continues to rise and has increased by over 130 per cent since January 2015, currently standing at around 1.56 per cent. Banks typically add 3 to 5 percent to EIBOR to calculate the rate it offers to borrowers. The upward trend is expected to continue throughout this year.
    2. If you can, lock in a fixed rate. Generally, fixed rates provide homeowners with the comfort of knowing what their payments will be during their fixed rate period, regardless of what happens to EIBOR. Once the fixed rate comes to an end, a new fixed rate can be negotiated in line with the bank’s current offers. With a tracker mortgage, mortgage payments will increase in line with EIBOR, which isn’t attractive whilst rates are on the rise, as they are expected to be in 2018.
    3. Off-plan isn’t for everyone, but has an upside. Off-plan financing is restrictive, given the policy that a maximum of 50 per cent financing is available, which also depends on payment schemes and developments partnering with banks for payment plans. But where there are payment plans of 25 per cent payable under construction and 75 per cent at completion, buyers can make their final payment to the developer by way of a mortgage. Similarly, when clients pay the full property value during construction, cash can be released back to those buyers to use as they wish.
    4. Does this sound like you? “A familiar story is clients coming to Dubai with a three-year plan and finding themselves in year four with hundreds of thousands of dirhams sunk into rental payments,” says Brendan Kennelly, Senior Mortgage Consultant at Mortgagefinder, an independent mortgage brokerage owned by Propertyfinder Group. “They plan to stay for at least another three years (probably more) and don’t want to spend any more on rent. The affordability of villas and the increase in property stock has made the dream of owning a property more of a reality. They use what savings and investments they have to buy a property.”
    5. Even if borrowing gets more expensive, it’s still cheap, historically speaking. If interest rates go up, as they are forecast to do, they will do so incrementally, and would likely not get near 2009 levels, when rates topped out at 4.3%.


6 Reasons Why The UAE Is An Awesome Place For Expat Women

Moving to a different country can be a daunting experience, especially if you’re a single woman looking to build a new life. A number of expats consider moving to the UAE because of the several lifestyle benefits it has to offer, from better job opportunities to a high standard of living. It has undoubtedly become a popular choice for women moving here from all corners of the world. Today, in celebration of International Women’s Day 2018, we take a look at 6 reasons that make life for expat women in the UAE nothing short of amazing!


International Women's DayWomen in the UAE have many platforms to further their career and explore entrepreneurship opportunities.

Known as the land of opportunity, the UAE offers plenty of career growth opportunities for men and women alike (we won’t discriminate here). The infrastructure within the country does not limit one’s chances of success based on gender, but rather opens up new avenues for the truly talented and skilled members of society. As a commercial hub, there are plenty of opportunities for expat women in the UAE to think big and aspire to new heights.

There are several organisations in the UAE to support and encourage entrepreneurship among local and expat women. Dubai Business Women Council (DWBC), Entrepreneur’s Organisation, International Business Women’s Group Dubai and the Women’s Network Group are a few of these groups that provide networking opportunities and professional support to help out female entrepreneurs in the UAE. Not to mention, these amazing creative co-working spaces in Dubai, with a lot more coming up in other emirates as well, that inspire, motivate, and reinforce your entrepreneurial spirit!


living in the UAE

Walking home alone or hailing a cab late night is safe in the UAE.

Whether you’re moving from the UK or South-East Asia, living in the UAE offers a high level of comfort and safety that is easily one of the biggest perks for expat women. Most residential buildings are equipped with state-of-the-art security equipment and usually have a security guard at the reception desk, where visitors generally need to sign in. Women working and living in the UAE can safely move around at any time of the day or night, without crippling fear of being harassed or worse. Walking home or catching a cab alone at night is never a source of anxiety thanks to strict laws against any kind of violence and crime in the country.

There are also special taxis driven by women (which in itself is awesome!) for those who want to be extra careful. Just flag down a pink cab and travel in peace.


Dubai metro

The RTA Metro in Dubai has a separate cabin for women and children. 

The Dubai Metro is one of the best ways to get around the city and central to the UAE lifestyle for those who don’t drive. It is connected to all the right spots for your morning commute and evening plans. This godsend mode of transport has a designated cabin for women and children which means more comfort and no awkward huddling in over-crowded compartments. While it can fill up pretty fast during rush hour, it still feels like a luxury and makes a huge improvement in your daily commute (especially for those moving to the UAE from a Western country). Men caught in the women’s cabin are charged with an AED 100 fine.


Waiting area

Government buildings in the UAE have separate queues and designated waiting areas for women.

Visiting a government office is never a fun ride. They generally turn out to be an exhausting ordeal of waiting in queues and chip away hours of your day. In the UAE, women have some perks in this aspect as well. Whether you’re getting your driver’s license renewed or getting your visa paperwork sorted, government buildings in the UAE always have separate queues for women along with designated waiting areas. Since a lot of these buildings are generally filled with men, queues for women aren’t usually very long. And that means more time for…


shopping in Dubai

Massive shopping malls are one of the best things about living in the UAE.

 We know the shopping factor may apply to most fashion hubs in the world, but how many of those would have sprawling shopping malls in every other neighbourhood? Shopping is an integral part of the UAE lifestyle. Women living in the UAE are always within close proximity to a shopping mall, big or small. And while that may not seem like a big deal to most, when you need a last-minute outfit for an event, it makes all the difference in the world. The go-to mall for shopaholics in the UAE is, of course, Dubai Mall. The gargantuan shoppers’ paradise has over 1,200 stores with top international brands and literally everything you might need for your chic and stylish wardrobe.


Ladies night in Dubai

Ladies night deals are quite common (and frequent) at popular hangout spots.

You may not think that your usual girls’ nights would be the same when you move to the UAE, but guess what? They’ll actually be better! Ladies nights are huge on the social circuit in Dubai and Abu Dhabi. Usually falling on Tuesdays, these fun nights are when women can head down to their favourite hangout spot and enjoy free entry, drinks, special discounts and even complimentary goodie bags at times. Need we say more?


VAT 101: Renters and home buyers escape the brunt of new tax policy

This article was originally published in Propertyfinder Trends 2017, Vol 3.

As UAE residents, we all want to know how the revised VAT law will impact our lives here. In October, Propertyfinder contributed a column for Khaleej Times detailing what we knew about the tax roll-out. Since then, the picture has become even clearer, but we are still in the “prepare as much as you can, but then we will have to ‘wait and see’” part of this process, as it is still early days.

Propertyfinder Group relies on our data and prior performance to provide market insight, and without any history to fall back on, it is difficult to say what the immediate impact will be. Overall, the introduction of VAT will likely increase the cost of living by about 2.5 per cent, according to experts.

Based on what’s exempt, the five per cent value-added tax on property transactions is expected to impact only large-scale investors and those buying and renting commercial properties in the UAE.

Meanwhile, residential deals, including rentals, will remain tax exempt, and therefore should not be affected.

That’s good news for home-buyers. All residential housing, both for first-time buying and for buy-to-rent, will be subject to VAT at zero per cent.

Residential renters will escape taxation because residential leases are exempt from VAT, and therefore landlords would not be allowed to add VAT to rent. But landlords may lose out on other expenses they incur with VAT, making rental prices vulnerable to an uptick.

From a developer’s standpoint, VAT will certainly impact the price of construction contracts, since goods and services related to construction are taxable. Since Dubai developers have been ramping up launches of their off-plan projects in the last six months, it’s imperative that they lock down processes so they are prepared to recoup potential losses under the new tax system.

They will still be able to claim a rebate, though, on the VAT of building materials as long as they are able to sell within three years of completion. Also, there will be no VAT on residential units within three years of their completion. This will incentivise developers to be sure that what they are adding to the market will be in demand.

As the sale and purchase of newly constructed real estate is likely to be zero-rated (that is, reported on a tax return but taxed at a zero per cent rate), investors in residential property will not be required to pay VAT to the developer or a subsequent seller. However, investors are likely to have to pay VAT to providers of leasing or management services relating to the property.

Therefore, large-scale investors and developers are likely to feel a pinch. In addition, developers’ documentation should be sure to clarify that VAT will be payable by investors otherwise they’ll be on the hook. Commercial tenants will be required to pay VAT. For most commercial tenants, this will not be a material issue as they will be able to offset this VAT against VAT that they are collecting on their supplies used for construction.

The initial, first sale of new homes will be taxed at a rate of zero per cent. This means property developers will be able to claim back any VAT they had to pay from the government. Residential tenants’ leases will be exempt from VAT, but commercial tenants – those in offices, shops, -etc. can expect to pay VAT at the standard rate of five per cent. Also, sales of commercial property will be subject to VAT at the standard rate of five per cent.

In addition, commercial developers and property buyers may want to consider the one-off costs of setting up shop as a taxpayer. This may include new software and staff training to ensure compliance and reduce the risk of penalties from a VAT audit.

Simply living in a home will become more expensive, however. Water and electricity bills in the UAE will be subject to the ve per cent value-added tax starting in the new year.

According to the executive regulation, approved by the UAE Cabinet, water and electricity are considered supplied goods. In article 2, headed “Supplies of goods”, it says: “A supply of water and all forms of energy including electricity and gas…whether used for lighting, or heating, or cooling, or air conditioning or any other purposes.”

The exciting news for everyone in the UAE is that VAT could generate AED 12 billion in its first year and AED 20 billion in its second year, according to Sultan bin Saeed Al Mansouri, UAE Minister of Economy. This may be reinvested in domestic infrastructure projects to draw more people to the UAE and attract more end users to the real estate market. This is certainly something to look forward to.


Want to rent a property in Dubai? Know the law

If you are looking to rent a property in Dubai then equipping yourself with the property laws of the emirate should be on priority.

Aiming to regulate the relationship and minimise disputes between a landlord and a tenant, the Real Estate Regulatory Agency (RERA) has definitive laws and specifications that outlines their roles and responsibilities.

Let’s take a look at the important aspects of the law before you rent a property in Dubai:

Regulating the relationship between landlords and tenants in Dubai

Article 1

This law will be cited as “Law No. (26) of 2007 regulating the relationship between landlords and tenants in the emirate of Dubai “. Law No. (33) of 2008 ammendents supersede Law No. (26) of 2007.

Definitions and scope of application

Article (2)

In implementing the provisions of this law, relevant words and expressions along with their description have been mentioned below.

Emirate: The Emirate of Dubai.

Tribunal: The Special Tribunal for the Settlement of Disputes between Landlords and Tenants.

RERA: The Real Estate Regulatory Agency.

Real Property: Immovable property and everything affixed or annexed to it, and which is leased out for purposes of accommodation or conducting a business activity, trade, profession, or any other lawful activity.

Tenancy Contract: A contract by virtue of which the Landlord is bound to allow the tenant use of the real property for a specific purpose, over a specific term, and in return for a specific consideration.

Landlord: A natural or legal person who is entitled by law or agreement to dispose of real property. This also includes a person to whom ownership of the real property is transferred during the term of a tenancy contract, an agent or legal representative of the landlord, or a tenant who is permitted by the landlord to sub-let the real property.

Tenant: A natural or legal person who is entitled use of the real property by virtue of a tenancy contract, or any person to whom the tenancy is legally transferred from the tenant.

Sub-tenant: A natural or legal person who is entitled use of the real property or any part thereof by virtue of a tenancy contract entered into with the tenant.

Rent: The specified consideration which the tenant must be bound to pay by virtue of the tenancy contract.

Notice: A written notification sent by either party to the lease contract to the other through the Notary Public, or delivered by registered post, by hand, or by any other technological means approved by law

Article (3)

The provisions of this law will apply to lands and real property leased out in the emirate excluding real property provided free of rent by natural or legal persons to accommodate their employees.

Term of tenancy contract

Article 4 – Amended; Law 33 of 2008

1.  The contractual relationship between landlord and tenant will be regulated by a tenancy contract detailing, in a manner allowing no room for uncertainty, a description of the leased Real Property, the purpose of the tenancy, the term of the tenancy contract, the rent and payment method, and the name of the owner of the real property, if the landlord is not the owner.

2. All tenancy contracts or any amendments to such tenancy contracts related to real property which are subject to the provisions of this law will be registered with RERA.

10 tips to remember before signing on the dotted line

1. Ensure that your real estate agent is Rera registered. They should be able to provide you with their broker number.

2. Write your cheques directly to the landlord. Before handing them over, ask for a copy of your landlord’s passport and if possible the title deeds too.

3. Ask your agent to check that all service charges have been paid by the landlord, and if possible get it in writing too.

4. Ask your agent to check that there are no outstanding bills for Dewa or the chiller (air conditioning). If there are, they will need to be paid before you can set up an account.

5. If there are maintenance issues that need to be resolved before you move in, ensure that they are taken care of.

6. Be aware of how many car parking spaces you have. It is not uncommon for there to be only one to share between a husband and wife. Also find out if there is visitors parking too, and how to access it.

7. Know how to access all parts of the building. Often, swipe cards and door keys are needed to enter your property.

8. If the property is not clean before you move in, ask for it to be cleaned in advance of you moving in. A property should be handed over in a habitable condition.

9. Take photos of any issues you find with the apartment and let your agent and landlord know. This will avoid issues when you try and prove they were there before.

10. Once you have your tenancy contract, sign up for Ejari.

Article 5

The term of a tenancy contract must be specified. Where the term is not specified in the tenancy contract or where it is impossible to prove the alleged term, the tenancy contract will be deemed valid for the period specified for payment of the rent.

Article 6

Where the term of a tenancy contract expires, but the tenant continues to occupy the real property without any objection by the landlord, the tenancy contract will be renewed for the same term or for a term of one year, whichever is shorter, and under the same terms as the previous tenancy contract.

Article 7

Where a tenancy contract is valid, it may not be unilaterally terminated during its term by the landlord or the tenant. It can only be terminated by mutual consent or in accordance with the provisions of this Law.

Article 8

The term of a sub-tenancy contract entered into between the tenant and sub-tenant will expire upon the expiry of the term of the tenancy contract entered into between the landlord and tenant, unless the landlord expressly agrees to extend the term of the sub-tenancy contract.

The rent

Article (9) Amended; Law 33 of 2008

1. The landlord and the tenant must specify the rent in the tenancy contract. Should the parties omit or fail to specify the agreed rent, then the rent must be the same as that of similar real property.

2. The Tribunal will determine the rent of similar real property taking into account the criteria determining the percentage of rent increase set by RERA, the overall economic situation in the Emirate, the condition of the real property, and the average rent of similar real property in similar real property markets within the same area and in accordance with any applicable legislation in the Emirate concerning real property rent, or any other factors which the Tribunal deems appropriate.

Article 10

RERA will have the authority to establish criteria relating to percentages of rent increase in the Emirate in line with the requirements of the prevailing economic situation in the Emirate.

Article 11

Unless otherwise agreed, the rent will cover use of the real property amenities such as swimming pools, playgrounds, gymnasiums, health clubs, car parks, and other amenities.

Article 12

The tenant will pay the landlord the rent on the dates mutually agreed upon. Where there is no agreement or where it is impossible to verify the payment dates, the Rent must be annually paid in four (4) equal instalments to be paid in advance.

Article (13)

For the purposes of renewing the tenancy contract, the landlord and the tenant may, prior to the expiry of the tenancy contract, amend any of the terms of the tenancy contract or review the Rent, whether increasing or decreasing it. Should the landlord and tenant fail to reach an agreement, then the Tribunal may determine the fair Rent, taking into account the criteria stipulated in Article (9) of this Law.

Three months notice a must

Article (14)

Unless otherwise agreed by the parties, if either party to the Tenancy Contract wishes to amend any of its terms in accordance with Article (13) of this Law, that party must notify the other party of same no less than ninety (90) days prior to the date on which the Tenancy Contract expires.

Landlord’s obligations

Article (15)

The Landlord will be bound to hand over the real property in good condition, which allows the Tenant full use as stated in the tenancy contract. However, the parties may agree upon renting an unfinished real property provided that the tenant agrees to complete the construction of the real property in a manner to render it suitable for use as intended. The identity of the party who will incur the costs of completing the construction will be determined in the Tenancy Contract.

Landlord is responsible for maintenance

Article 16

Unless otherwise agreed by the parties, the Landlord will, during the term of the Tenancy Contract, be responsible for the Real Property’ maintenance works and for repairing any defect or damage that may affect the Tenant’s intended use of the Real Property.

Article 17

The Landlord may not make to the Real Property or any of its amenities or annexes any changes that would preclude the Tenant from full use of the Real Property as intended. The Landlord will be responsible for such changes whether made by him or any other person authorised by the Landlord. Further, the Landlord will be responsible for any defect, damage, deficiency, and wear and tear occurring to the Real Property for reasons not attributable to the fault of the Tenant.

Article 18

The Landlord must provide the Tenant with the approvals required to be submitted to the competent official entities in the Emirate whenever the Tenant wishes to carry out decoration works or any other works that require such approvals, provided that such works do not affect the structure of the Real Property and that the Tenant has the official documents requesting such approvals.

Tenant’s Obligations

Article 19

The Tenant must pay the Rent on due dates and maintain the Real Property in such a manner as an ordinary person would maintain his own property. Without prejudice to the Tenant’s obligation to carry out the restorations that have been agreed upon or which are customary for Tenants to undertake, the Tenant may not make any changes or carry out any restoration or maintenance works to the Real Property unless so permitted by the Landlord and after obtaining required licences from the competent official entities.

Article 20

When entering into a Tenancy Contract, the Landlord may obtain from the Tenant a security deposit to ensure maintenance of the Real Property upon the expiry of the Tenancy Contract, provided that the Landlord undertakes to refund such deposit or remainder thereof to the Tenant upon the expiry of the Tenancy Contract.

Article 21

What to do if your deposit stuck with your landlord?

Upon the expiry of the term of the Tenancy Contract, the Tenant must surrender possession of the Real Property to the Landlord in the same condition in which the Tenant received it at the time of entering into the Tenancy Contract except for ordinary wear and tear or for damage due to reasons beyond the Tenant’s control. In the event of dispute between the two parties, the matter must be referred to the Tribunal to issue an award in this regard.

Article 22

Unless the Tenancy Contract states otherwise, the Tenant must pay all fees and taxes due to Government entities and departments for use of the Real Property as well as any fees or taxes prescribed for any sub-lease.

Article 23

Unless otherwise agreed by the parties, upon vacating and surrendering possession of the Real Property, the Tenant may not remove any leasehold improvements made by the Tenant.

Article 24

Unless otherwise agreed by the parties to the Tenancy Contract, the Tenant may not assign the use of or sub-lease the Real Property to third parties unless written consent of the Landlord is obtained.

Eviction cases

Article (25)

1.Before the expiry of the Tenancy Contract:

Under Article 25, the landlord has the right to evict the tenant from the Real Property prior to the expiry of the term of the Tenancy only in the following cases:

where the Tenant fails to pay the Rent or any part thereof within thirty (30) days after the date a Notice to pay is given to the Tenant by the Landlord unless otherwise agreed by the parties;

a. where the Tenant sub-lets the Real Property or any part thereof without obtaining the Landlord’s approval in writing. In this case, the eviction will apply to both the Tenant and Sub-Tenant. However, the Sub-Tenant’s right to claim a compensation from the Tenant will be preserved;

b. where the Tenant uses the Real Property or allows others to use it for any illegal purpose or for a purpose which breaches public order or morals;

c. where the Tenant of commercial Real Property leaves the Real Property unoccupied for no valid reason for thirty (30) consecutive days or ninety (90) non-consecutive days within the same year, unless agreed otherwise by both parties;

d. where the Tenant makes a change to the Real Property that renders it unsafe in a manner that makes it impossible to restore the Real Property to its original state, or damages the Real Property willfully or through gross negligence, by failing to exercise due diligence, or by allowing others to cause such damage;

e. where the Tenant uses the Real Property for a purpose other than that for which the Real Property was leased, or uses the Real Property in a manner that violates planning, construction, and use-of-land regulations in force in the Emirate;

f. where the Real Property is condemned, provided that the Landlord must prove this by a technical report issued by or attested to by Dubai Municipality;

g. where the Tenant fails to observe any obligation imposed on him by this Law or any of the terms of the Tenancy Contract within thirty (30) days from the date a Notice to perform such obligation or term is served upon him by the Landlord; or

h. where competent Government entities requires demolition or reconstruction of the Real Property as per urban development requirements in the Emirate.

For the purposes of paragraph (1) of this Article, the Landlord will give Notice to the Tenant through a Notary Public or registered post.

2. Upon expiry of the tenancy contract:

Upon expiry of the Tenancy Contract the Landlord may request eviction of the Tenant from the Real Property only in any of the following cases:

a. where the owner of the Real Property wishes to demolish the Real Property to reconstruct it, or to add any new constructions that will prevent the Tenant from using the Real Property, provided that the required permits are obtained from the competent entities;

b. where the Real Property is in a condition that requires restoration or comprehensive maintenance that cannot be carried out in the presence of the Tenant in the Real Property, provided that the condition of the Real Property is verified by a technical report issued by or attested to by Dubai Municipality;

c. where the owner of the Real Property wishes to take possession of it for his personal use or for use by any of his first-degree relatives, provided that the owner proves that he does not own another Real Property appropriate for such purpose; or

d. where the owner of the Real Property wishes to sell the leased Real Property.

For the purposes of paragraph (2) of this Article, the Landlord must notify the Tenant of the eviction reasons twelve (12) months prior to the date set for eviction, provided that this notice is given through a Notary Public or registered post.

Article 26 – Amended; Law 33 of 2008

If the Tribunal awards the Landlord possession of the Real Property for his personal use or for use by any of his first-degree relatives in accordance with sub-paragraph (c) of paragraph (2) of Article (25) of this Law, the Landlord may not rent the Real Property to a third party before the lapse of at least two (2) years from the date of possession of the Real Property by the Landlord in case of residential Real Property and three (3) years in case of non-residential Real Property, unless the Tribunal, in its discretion, sets a shorter period. Otherwise, the Tenant may request the Tribunal to award him a fair compensation.

General Provisions

Article 27

The Tenancy Contract does not expire upon the death of the Landlord or the Tenant. The contractual relationship continues with the heirs, unless the heirs of the Tenant wish to terminate such relationship, provided that termination comes into effect no less than thirty (30) days from the date of notifying the Landlord of such intent or the expiry date of the Tenancy Contract, whichever comes first.

What happens when your rented property gets a new owner?

Article 28

Transferring the ownership of Real Property to a new owner does not affect the Tenant’s right to continue to occupy the Real Property by virtue of the Tenancy Contract entered into with the previous owner, provided that such Tenancy Contract has a fixed term.

Article 29 – Amended; Law 33 of 2008

Right of first refusal in real estate

1. The Tenant has the right of first refusal to rent the Real Property after it has been demolished and reconstructed or renovated and refurbished by the Landlord, provided that the Rent is determined in accordance with the provisions of Article (9) of this Law.

2. The Tenant must exercise the right of first refusal referred to in the preceding paragraph within a period not exceeding thirty (30) days from the date the Tenant is notified by the Landlord.

Sub-Tenant services

Article 30

If the Tribunal issues an award terminating the Tenancy Contract and the Real Property is occupied by a Sub-tenant under a contract entered into with the Tenant and approved by the Landlord, the Sub-tenant may continue to occupy the Real Property under the terms of the sub-Tenancy Contract.

Article 31

Filing a claim to evict the Tenant does not exempt the Tenant from paying the Rent for the whole period during which the claim is considered, and until an award is rendered and executed.

Article 32

If the Landlord and Tenant agree in the Tenancy Contract or in any other subsequent agreement to refer any dispute arising between them out of the Tenancy Contract performance to arbitration, neither party may take any action that would affect the Real Property or the parties’ rights and obligations as set out in the Tenancy Contract. The Tribunal may, upon the request of the Landlord or the Tenant, issue any interim awards it deems appropriate to preserve such rights and legal position until the arbitration award is rendered.

Dispute resolutions

Article 33 – Renting out an apartment

Where a dispute arises and the Landlord and Tenant have not agreed on the arbitrators or if one or more of the agreed on arbitrators refrains from doing the work, resigns, is removed, or disqualified, or if an issue arises preventing the arbitrator from doing his work, and there was no agreement between the parties in this regard, the Tribunal, upon the request of either party, will appoint the arbitrator(s). The number of arbitrators appointed by the Tribunal must be equal to or complete the number of arbitrators agreed on.

Article 34 Disconnecting service is illegal

The Landlord may not disconnect services from the Real Property or disturb the Tenant in his use of the Real Property in any manner. If this happens, the Tenant may have recourse to the police station under whose jurisdiction the Real Property falls to seek a remedy for the violation or to file a police report regarding the violation. He also may have recourse to the Tribunal by filing a claim for damages for any loss he may have suffered, supported by official reports that support the existence of such violation.

Aticle 35

The awards relating to vacating the Real Property will be executed through the Tribunal and pursuant to the rules and procedures issued in this respect. Apart from such awards, other awards issued by the Tribunal will be executed by the Execution Section of Dubai Courts.

Article 36 – Amended; Law 33 of 2008

The Chairman of the Executive Council will issue the regulations, bylaws, and resolutions required for the implementation of the provisions of this Law. Article (2) This Law will be published in the Official Gazette and will come into force on the day on which it is published.

Article 37

This Law will be published in the Official Gazette and will come into force after sixty (60) days from the date of publication.

Call centre 6005 55556

Source Dubai Land Department

Locate RERA


Unified lease agreement

To establish transparency and clarity for the benefit of all parties in the real estate market, the Dubai Land Department (DLD), announced the launch of the unified lease in March 2017 with the aim of establishing greater transparency and credibility in the real estate market. The unified lease agreement was implemented to contribute to the completion of the legal system and the consolidation of the rights and duties of contracting parties.

Legal reference

Law (2) 2003 is one of the references on which the unified lease agreement was based. The lease agreement was also based on Law (33) 2008 regulating the relationship between landlords and tenants in Dubai, specifically Article 25 that outlines scenarios in which the landlord can request the eviction of the property (including the sublease), allow others to use the property and use the property for purposes other than stated in the licence.

In accordance with Law (26) for the year 2007, specifically Article (16), during the term of the lease, the landlord shall be responsible for the maintenance of the property and for the repair of any malfunction that affects the tenant’s satisfaction of the intended benefit, unless otherwise agreed. The law obliges the landlord to bear this responsibility in all cases, but does allow for the liability to be transferred to the tenant if there is a consensual agreement. This prevents the establishment of a binding clause and ensures tenants and landlords are in agreement.

Easy operation

DLD encourages landlords to download and print contracts from the Ejari official website (, and provides assurance that all items included within such contracts are based upon a legal framework that regulates relationships and transactions. It is the responsibility of the parties to the contract to agree on items that meet their requirements and needs when signing the unified lease for the first time.

Three reasons qualify or give the right to the landlord/property owner to evict a tenant:

1. Breach of tenancy agreement or violation of a law

2. Landlord wants to sell the property

3. Landlord wants to self-occupy the property

10 tips to remember before signing on the dotted line

1. Ensure that your real estate agent is Rera registered. They should be able to provide you with their broker number.

2. Write your cheques directly to the landlord. Before handing them over, ask for a copy of your landlord’s passport and if possible the title deeds too.

3. Ask your agent to check that all service charges have been paid by the landlord, and if possible get it in writing too.

4. Ask your agent to check that there are no outstanding bills for Dewa or the chiller (air conditioning). If there are, they will need to be paid before you can set up an account.

5. If there are maintenance issues that need to be resolved before you move in, ensure that they are taken care of.

6. Be aware of how many car parking spaces you have. It is not uncommon for there to be only one to share between a husband and wife. Also find out if there is visitors parking too, and how to access it.

7. Know how to access all parts of the building. Often, swipe cards and door keys are needed to enter your property.

8. If the property is not clean before you move in, ask for it to be cleaned in advance of you moving in. A property should be handed over in a habitable condition.

9. Take photos of any issues you find with the apartment and let your agent and landlord know. This will avoid issues when you try and prove they were there before.

10. Once you have your tenancy contract, sign up for Ejari.


How the Dubai real estate market evolved in 2017

Off-plan sales revived sentiment and an abundance of supply opened the doors for affordable opportunities

2017 was a year of change in the Dubai real estate market, where we witnessed real estate trends transform to new and refreshing positions, off-plan sales revive market sentiment and an abundance of supply open the doors for many affordable opportunities in the sales market and offer more options and lower rents in the rental market.

More affordable properties
The current momentum in sales activity is driven by a larger proportion of end-users than before, particularly first-time buyers, who are entering the market enthused by lower prices and encouraged by attractive payment plans offered by some developers.

Off-plan market
Off-plan sales has dominated 2017, accounting for 68 per cent of all sales transactions to date and has increased by 55 per cent year on year. As of November 27, there have been 18,657 off-plan apartment sales transactions. The most popular unit types for off-plan apartment sales were one-bedrooms, accounting for 39 per cent of these sales transactions and studios accounting for 36 per cent of the transactions.

As per the Property Monitor database, the top five areas for off-plan apartment sales to date are (in order):

> Jumeirah Village Circle covering 11 per cent of the transaction volume with the top three projects being Ghalia Constella, Belgravia and Bloom Heights.

> Business Bay covering 11 per cent of the transaction volume with the top three projects being Aykon City, Bayz by Danube and Damac Towers by Paramount.

> Downtown Burj Khalifa covering 10 per cent of the transaction volume with over 1,500 units sold in the Downtown area and over 300 units sold in the Opera District.

> Al Furjan covering eight per cent of the transaction volume with the top three projects being Azizi Residence, Azizi Plaza Serviced Apartments and Roy Mediterranean Serviced Apartments.

> Dubai South covering eight per cent of the transaction volume with the top three projects being The Pulse, Mag 5 Boulevard and Emaar South.

To date, there have been 3,957 off-plan villa/townhouse transactions. The most popular types were three-bedrooms, accounting for 54 per cent of the transactions and two-bedrooms accounting for 24 per cent of the transactions.

As per the Property Monitor database, the top five areas for off-plan villa/townhouses sales to date are (in order):

> Town Square covering 31 per cent of the transaction volume.

> Arabian Ranches 2 with 27 per cent of the transaction volume.

> Dubai South with 18 per cent of the transaction volume.

> Mohammed Bin Rashid City with 11 per cent of the transaction volume.

> Reem Mira with 3.6 per cent of the transaction volume.

Secondary market
The secondary market accounted for 32 per cent of the sales transactions in 2017. Prices in established communities with limited upcoming supply have held stronger than emerging locations even as marginal price declines continue. One of the main reasons sales activity in the secondary market has been low this year is due to prices still trading at a premium and sellers not very motivated to negotiate. However, in Q4, sellers have started to budge on their pricing which has caused an increase in secondary sales.

According to Lewis Allsopp, CEO of Allsopp & Allsopp: “From our statistics this year, we can see that our average sale price has been at Dh2,566,709 and that 55 per cent of our buyers have been ‘end-users’ and 45 per cent buying for investment. We can also see that 52 per cent of purchases have been made using a mortgage. The type of properties that we have seen the most activity in this year are apartments and small villas, which fits the profile perfectly of a first-time buyer.”

Rental market
This year, we have seen the shift in power from the landlord to the tenant. Due to new supply, rent declines for residential properties in Dubai have been more pronounced than sales price declines over the last 12 months.

According to Property Monitor’s database of rental contracts, no area or property type was immune to the declining trend. Areas with more supply are obviously impacted higher but other established, mid-market locations are also affected as consumers are shifting and opening their options to areas they never considered before. With new supply coming into the market in suburban communities, we are seeing tenants shift from established communities to like-for-like product in suburban communities at a cheaper price over multiple cheques. According to Property Monitor, four cheques annually are now the average, with 42 per cent of villa/townhouse contracts negotiated with four cheques and 54 per cent of apartment contracts were done with four cheques.

Upcoming supply
According to the Property Monitor Supply Tracker, which tracks supply in real time, there are a little over 13,000 units expected to be completed by end of the year. A majority of these projects will most likely get pushed to Q1 2018. However, there are quite a few projects which are looking to be very near completion in Al Quoz, Business Bay, Jumeirah Village Circle, Sports City, Al Furjan and Town Square.

According to the Property Monitor Supply Tracker, in 2018, over 40,000 units are expected to be completed. The areas with most supply expected to be completed in 2018 are:

> Mohammed Bin Rashid City with over 3,800 units.

> Jumeirah Village Circle and Al Furjan, each with over 3,700 units.

> Damac Hills with over 3,200 units.

> Town Square with over 2,500 units.

> Akoya Oxygen with over 2,900 units.

> Deira with over 2,100 units.

> Dubai Marina with over 2,400 units.

The writer is partner and head of Property Monitor at Cavendish Maxwell. Views expressed are her own and do not reflect the newspaper’s policy.

Source by:

How VAT on Property and other products works elsewhere

VAT in Dubai will be levied at 5% which will be one of the lowest in the world. At present, Yemen has the lowest VAT chargeable rate at 2%, and North Korea has between 2 to 4% depending on the goods and or services offered. Whilst there are countries that charge around the 20% mark, the highest rate charged at present is Hungary which levies its citizens a whopping 27% of the goods/services value.

Despite the value added tax in the UAE being levied at only 5%, its introduction could raise concerns among some investors and end-users of real estate alike. The chances are that this tax will potentially become a cash flow issue with funds moving from one account to another, i.e. VAT paid will be compensated with VAT charged. It is likely that it could have an adverse effect since the consumer will end up paying more for property related goods and services and therefore could affect the sentiment in general.

‘It’s important to know that there are two types of charge.’ – Mario Volpi


The VAT charged on supplies which include services by a registered company (outputs) and the levy paid to suppliers for them to produce these goods and services (inputs). It is likely that these inputs and outputs should level each other out, but sometimes it is not possible to charge VAT in both cases for that to happen.

These goods and services can attract either zero rating or can be exempt from VAT. A zero-rated tax means that zero % is charged for goods and services produced or sold (output) while any levy paid on production costs on inputs can be recovered.

Exempt VAT cannot be charged for outputs, while the provider/seller will have to pay VAT for its inputs.


When buying a primary off-plan property, a buyer will not have to pay VAT on Dubai real estate to the developer, but a developer will be able to claim back any input levy paid to its suppliers during the course of building the project, therefore off plan property transactions will be classified as zero-rated.


The secondary market will be exempt from VAT at the point of sale but buyers will, of course, be subject to VAT on commissions and other governmental fees relating to these purchases. Individuals may have to pay VAT on Dubai real estate only in terms of lease management services or other management services.

Commercial property buyers will have to pay VAT on Dubai real estate on both off plan or secondary market units.

If the commercial property is acquired for the purpose of further leasing to commercial tenants, the cost of the VAT paid when buying, for example, a retail unit, a warehouse or office, can be reclaimed when charging the levy for the tenants. These same tenants who are charged VAT from the landlord in addition to the rent will be able to recover the VAT from their commercial activities when charging the levy for goods and services.


As stated before, the issue of VAT, therefore, becomes a matter of cash flow, so in theory, should not affect the value of real estate units and/or property prices in general.

The advantage for the government to balance the financial books is far more advantageous and will outweigh any negativity in sentiment that the introduction of VAT may bring.

It also remains to be seen if a company or entities will pass on the full amount of value added tax to the consumers as some would prefer to stay competitive in the eyes of the customers by not actually doing so or only partially passing on the charge. All is yet to be revealed when it comes to VAT on property in Dubai…

It is best, however, to go ahead with property investment plans before VAT goes into effect on real estate transactions by making a purchase in an area that best suits your investment needs, albeit not before conducting research on the ROI in different areas of Dubai.


Dubai realty still a winner

Dubai Marina identified as the most sought-after area for both renting and buying apartments this year, while Mirdif and Arabian Ranches led the pack in villa renting and buying, according to’s annual report for 2017.

Dubai real estate’s competitive prices will continue to attract investors in 2018

Dubai remains an attractive market for property investors despite softening rents and sale prices this year as the emirate still offers stable returns on real estate investment, a latest report says.

Property portal’s annual report for 2017 indicated a seven per cent and five per cent average return on investment on apartments and villas, respectively, in Dubai this year.

It identified Dubai Marina as the most sought-after area for both renting and buying apartments this year, while Mirdif and Arabian Ranches led the pack in villa renting and buying, respectively. It noticed Dubai International City as the most affordable popular area for both renting and buying apartments, while Mirdif offered the lowest-priced villas and townhouses in the emirate.

“As more and more off-plan projects are completed in 2018, handed over and put on the secondary market, we can expect prices continuing to attract investors while landlords will have to stay competitive to entice potential tenants,” chief executive of Haider Ali Khan said.

“In the long run, as the market and the broader economy move on a trajectory of diversification and maturity, the opportunity for developers and sellers to capitalise on their investment remains strong,” Khan added.

Atif Rahman, director and partner of Danube Properties, said Dubai is perhaps one of the best real estate markets from an investment perspective, where rental return on investment is one of the highest.

“Typically, an investor can easily fetch seven to 10 per cent annual rental returns, depending on the location, product quality and size of the property. In most developed markets worldwide, the rental yields vary from two to five per cent,” Rahman said.

“The other aspect of investing in Dubai is the presence of an extremely sound regulatory environment that makes the investment in Dubai’s real estate an absolutely safe proposition – regardless of which location you invest in. So, from real estate investment point of view, Dubai offers one of the best investment opportunities when compared worldwide.”

Prabhakar Raghavendra Rao, joint managing director of Gemini Property Developers, said real estate assets – residential, commercial, retail and hospitality properties – in Dubai offer one of the highest rates of return on investment, compared to most metropolises in the world.

“Depending on the location, size and the quality of the property, buyers could recover the total investment in 12-15 years – one of the fastest rates of return on investment due to high rental yields. That’s one of the reasons why there won’t be any shortage of property buyers and investors in Dubai and the UAE – no matter how many properties are added to the existing properties every year,” Rao told Khaleej Times.

Rents on decline

The report said apartment rents in Dubai remained on the decline with highest decrease of 16 per cent recorded in International City where tenants paid annual rents of Dh31,000, Dh42,000 and Dh65,000 for studios, one- and two-bedroom apartments, respectively. Dubai Silicon Oasis, Mirdif, Bur Dubai, Deira and Al Nahda were other sought-after areas for renting apartments this year.

For villas and townhouses for rent, Mirdif was the top choice of tenants and followed by homes in Jumeirah, Al Barsha, Umm Suqeim and Arabian Ranches.

Mirdif was the most affordable villa community with yearly leases of Dh130,000, Dh145,000 and Dh150,000 for three-, four- and five-bedroom villas, respectively, with a 9 per cent to 13 per cent year-on-year drop.

Palm Jumeirah was the most expensive popular villa locality in Dubai this year with yearly leases of Dh315,000, Dh420,000 and Dh450,000 for three-, four- and five-bedroom villas, respectively, with a six per cent to 13 per cent year-on-year decline this year.

Sales prices more attractive

Dubai Marina was the most desirable Dubai community for buying apartments this year, followed by Downtown Dubai, Jumeirah Village Circle, Jumeirah Lake Towers (JLT) and Palm Jumeirah. Investors paid Dh850,000, Dh1.35 million and Dh2.2 million for studios, one- and two-bedroom apartments, respectively.

Palm Jumeirah remained the most extravagant popular area with studios, one- and two-bedroom flats, demanding Dh1.25 million, Dh2.4 million and Dh2.7 million, respectively.

In terms of investment in the affordable segment, Dubai International City remained the most cost-effective to investors as studios, one- and two-bedroom apartments were priced at Dh350,000, Dh475,000 and Dh850,000, respectively, roughly reflecting a 5 per cent decline from 2016.

Apartment types that bucked the trend were studios in Dubai Silicon Oasis and Dubai Sports City with a 1 per cent increase, one-bedroom apartments in Palm Jumeirah with a 5 per cent upturn and two-bedroom apartments in JLT with a 0.5 per cent rise.

Most of the interest for buying villas and townhouses in 2017 was observed in premium gated communities such as Arabian Ranches, Reem Community, Dubailand, Palm Jumeirah and The Springs, among others.

The most expensive well-liked area for buying villas is Palm Jumeirah with three-, four- and five-bedroom villas and townhouses commanding Dh8 million, Dh11.5 million and Dh15.5 million, respectively, with a 4 per cent to 9 per cent year-on-year decline from 2016.

Off-plan listings in Dubai Marina were the most sought community by investors followed by projects in Downtown Dubai, Jumeirah Village Circle, JLT and Dubai Silicon Oasis, according to the report.

“We have seen an overwhelming response to our apartments, a positive sign that the market is still robust with plenty of demand for high quality yet affordable properties,” Muhammad BinGhatti, CEO and head of architecture at Binghatti Developers, said.

Referring to a report by Reidin/Global Capital Partners report, Rao said the total return of real estate assets in major cities such as Dubai, New York, Singapore and London stood between five and 11 per cent.

In Dubai and Singapore, he said real estate assets have returned close to 120 per cent in the form of rents and capital gains over the last 10 years, compared to 75 per cent in London and 63 per cent in New York. In Dubai, the majority of returns have been through rental increases.

“Going forward, affordable luxury properties will be on high demand. Therefore, those properties will command a higher and faster return on investment,” Rao of Gemini Property said.



Al Furjan

Budget-conscious buyers make a beeline for Al Furjan

Fairly high supply levels should ensure prices remain within a tight band

Al Furjan

Launched in 2007, Al Furjan is a residential community currently under construction near Jebel Ali Village and Discovery Gardens. The master-developer, Nakheel, has ensured that Al Furjan is an attractive site for investors.
Azizi Developments, which came in during the first phase of the community, did its initial handover of apartments in the third and fourth quarter of 2016 and the process completed in the first quarter of 2017. Current completed and under construction units comprise of fully-furnished serviced apartments.

The average sales price for a fully-furnished two bedroom off-plan apartment in Al Furjan is Dh1.30 million, which is slightly below that of a non-furnished two-bedroom off-plan apartment in Jumeirah Village Circle, which is now selling at Dh1.32 million.
With similar specifications, Al Furjan villas are priced significantly lower than those in Jumeirah Park. According to the Property Monitor Index, in September 2017 the average sales price of a villa/town house in Al Furjan was Dh3.13 million in comparison to the average in Jumeirah Park of Dh4.6 million.
With 171 off-plan apartment transactions taking place in October so far in Al Furjan, buyers are flooding towards the community to take advantage of the lower price units. The transport links in this area may be a bit of compromise as the closest metro station is 5.59 kilometres away.


However, under the Route 2020 project, there is upcoming infrastructure such as redesign of metro stations. There is a 15 kilometre extension of the Red Line, which will serve people living in a variety of areas including Al Furjan. There is also been a new interchange between Al Yalayis Road and Shaikh Mohammad Bin Zayed Road, easing traffic congestion to Jebel Ali and Al Furjan.
Al Furjan is close to a variety of schools, hospitals and the Ibn Battuta Mall just 3.3 kilometres away. The community thus presents an opportunity for investors and first-time buyers.
According to Property Monitor’s Supply Tracker, Al Furjan has 3,950 units scheduled to be completed in 2018. The increasing supply of apartments in Al Furjan, shown by the large number of units due to be completed in 2018, may put pressure on future sales and rental price of apartments within the community.


real estate in Dubai

Dubai growth to outperform GCC countries

Dubai growth expected to accelerate from 2.9 per cent in 2016 to 3.2 per cent in 2017 and 3.5 per cent in 2018.

Diversification has put the Dubai economy on road to progress and the emirate will outperform the rest of the Gulf countries by sustaining strong growth in gross domestic product (GDP) in 2017 and 2018, according to a latest report.

Institute of International Finance (IIF) said Dubai has performed relatively well due to its diversified economy. Tourism, retail trade and transport will continue to be the key driver of its economic growth.

“We expect growth to accelerate from 2.9 per cent in 2016 to 3.2 per cent in 2017 and 3.5 per cent in 2018,” said Garbis Iradian, chief economist for Middle East and North Africa at IIF.

The IIF growth forecast is in line with the International Monetary Fund (IMF), which said Dubai will record 3.2 per cent growth this year compared to 2.8 per cent in 2016. “Dubai economy is moving at relatively good speed due to investment in infrastructure projects led by Expo 2020 developments,” Jihad Azour, director of the IMF’s Middle East and Central Asia Department, said recently at a media briefing in Dubai.

Infrastructure spending is a prime focus of Dubai government as it registered 27 per cent year-on-year increase in 2017 due to allocations of more funds towards Expo 2020 projects. It is accounted for 17 per cent of total expenditures this year, reflecting the emirate’s concern for the gradual implementation of Expo 2020 developments, according to analysts.

“With the government focus on the Expo 2020, there will be additional government spending which in turn will provide lubrication to the economy. Being a stable and peaceful country in the region, the UAE in general and Dubai in particular, are seen as an investment destination in the region,” Atik Munshi, senior partner at Crowe Horwath – UAE, said.

About the economic growth outlook, he said it is not surprising that the IMF and other international organisations have predicted a higher growth for Dubai GDP backed by the non-oil revenue. He said the main thrust will actually come from the implementation of value-added tax, which is expected to provide a boost to the government exchequer.

“Real estate and construction, which is one of the major sectors for Dubai has also fared better and the same is expected to continue in 2018. I personally feel that the Dubai GDP will be in excess of 3.5 per cent in the next year,” Munshi told Khaleej Times.

Dubai Economy also forecasts that the emirate’s GDP will grow at 3.1 per cent this year and 3.6 per cent in 2018 as it pursuits diversification policy to reduce reliance on trade and trade and focus more on real estate, manufacturing and tourism.

Richard Stolz, head of corporate development at grmc Advisory Services, said Dubai’s tourism sector is ever growing in terms of tourist volumes visiting the city.

“For the first nine months of 2017 Dubai’s visitor number grew by 7.5 per cent over the same period last year to a total of 11.58 million overnight visitors. The steady growth in this sector can certainly be regarded as one of the contributors to Dubai’s growing GDP,” Stolz told Khaleej Times.

Dubai has been ranked among the world’s top most-visited cities and secured sixth place after Hong Kong, Bangkok, London, Singapore and Macau by Euromonitor International in its top 100 city destinations rankings. It is expected that the number of foreign visitors to emirate will reach 16.56 million in 2017 as compared to last year’s 14.9 million, an increase of 11.2 per cent – the highest growth in the top 10 cities.

Dubai Properties

Dubai’s housing handover upsurge

We look into the impact of a sharp increase in housing deliveries this year

Dubai has seen a significant upsurge in new home handovers during the first half of the year, with 12,525 deliveries as opposed to 5,039 during the same period last year, according to data from REIDIN. Dubai Silicon Oasis had the most handovers with 2,740 units, Dubailand had 2,588 units and International City had 1,679 units. The other communities with significant handovers were Downtown Dubai (1,411), Business Bay (869) and fast-emerging Jumeirah Village Circle (694).

“The market upturn in 2011 gradually led to a recovery in the prices, and as the market [improved], a significant number of off-plan projects were launched from the end of 2013,” says Suraj Poon, senior global property sales consultant at Gulf Sotheby’s International Realty. “With an average of three years completion time, there is bound to be substantial handovers in the first half of 2017.”

Generally, there is a difference between delivery dates announced by the developers and the actual completion dates, as seen in the last couple of years. However, Ozan Demir, research and data manager at REIDIN, points out that government regulations are now forcing developers to hand over projects on time.

“Payments towards off-plan property purchases are protected with escrow accounts, wherein the investors’ payments are released to the developers once the construction reaches certain milestones,” says Demir. “We have seen around 12,500 handovers during the first half, of which a majority were apartments, villas and town houses totalling 10,000 units. The rest were serviced apartments across Dubai.”

Demir says the increase in unit handovers this year reflects the developers’ reaction to the market. “We have seen many launches between 2013 and 2014, while property prices were climbing upwards, and those developments are now in the handover phase, says Demir. “When we analyse the past three-year period, project materialisation rate stands at 60 per cent. In other words, 60 per cent of the expected units at the beginning of the year will be added to the market. The rest will be delayed and the stock will be added to consecutive years.”

“As per our latest research, Dubai’s real estate supply is currently synced with demand when we consider a materialisation rate of 50-60 per cent and population growth rate at 6 per cent. If Dubai’s population continues to grow at a rate of 6 per cent a year, this means it can absorb around 20,000-25,000 units a year with the current conditions.”

Demir points out that any sudden boost in handover may affect the current equilibrium and prevent a price recovery. “Around 25,000 units are in the pipeline in the second half of the year, and 40,000 units are in the pipeline in the first half of 2018. Based on the previous year’s materialisation we expect half of what has been announced to be handed over.”

Supply and demand

Manika Dhama, senior consultant, strategic consulting and research at Cavendish Maxwell, says the housing demand in Dubai is influenced by white-collar population growth. “While this number has increased in absolute terms since 2014, the percentage contribution of this segment in total population has declined from 44 per cent in 2014 to 40 per cent last year,” says Dhama. “Meanwhile, housing stock has continued to increase over this period, with nearly 12,000-15,000 new units being added each year in freehold areas alone. The impact of increasing supply has had a more pronounced effect on rents, with 12-month declines averaging 3-4 per cent as of September.

“However, there are community-level differences in how demand stacks up against supply, and this incorporates factors such as household sharing ratios, migration trends, project handovers within the community, as well as lower-priced inventory entering the area.”

Citing figures from the Property Monitor supply tracker, she says that approximately 30,000 apartment units, 896 villas and 2,500 town houses are scheduled for completion next year. “The historical trends of handovers within each month reveal that the materialisation rate could be less than 50 per cent of the announced supply by the time 2018 ends.”

Some of the factors that cause project delays include financing issues, contractual disputes and other interruptions, says Dhama. “In response to the falling rents and prices, developers are now increasingly resorting to staggered delivery schedules to avoid swamping the market with new units, driving prices further down.”

On the other hand, handovers are based on factors including the financial strength of the developer to complete construction on time, regulatory documentation from the government and phased delivery by the developers.

“Handovers completed in first half of 2017 include projects that have been delayed from previous time periods and hence together with initially projected completions for this period, the total handovers appear higher than earlier years,” says Dhama. “Several stalled projects from 2013-14 or even earlier have now been able to complete, possibly as a result of project financing for the affected projects or off-plan sales.”

Here is the low-down on the top-performing communities this year.

Dubai Silicon Oasis

Demir says around 7,500 units are expected to enter the market from Dubai Silicon Oasis (DSO) in the next three years. The place is preferred by mid-income families because of its location and its commercial and residential amenities.

“DSO is one of the top areas for rental returns. While average apartment gross yield in Dubai is around 7 per cent, investors in DSO can expect around 9 per cent return on the apartments. Existing supply is around 12,500 units and more than 60 per cent will be added in the next three years period. The area has around 90 per cent occupancy rate, hence, there is high absorption.”

The completed projects this year include four from Binghatti Developers, which added around 700 units, and Seven Towers, which added 1,000 units. Other private developers brought in about 1,000 units. “Around 3,500 units are expected to be handed over next year, if all the developers deliver in the announced timeline,” says Demir. “Key projects include Binghatti Stars and Vista, Topaz Residences, Arabian Gate and Serenity Heights.”


Tarun Amarmani, global property consultant at Gulf Sotheby’s International Realty, says that over 50 projects are scheduled for handover in Dubailand over the next 12 months. “Most of these are new phase developments of existing smaller communities,” says Amarmani. “For instance, in Mudon an additional 600 units are to be handed over in the first half of next year. Similarly, Damac, Liwan, Al Barari and Reemram will be handing over additional units within the community.”

Projects such as Vincitore Palacio and town houses, villas and apartments in Damac Hills are among the projects that were handed over during the year, he says. The community caters to both the low and high income individuals, offering them different options.

“The place offers good value for money for end users as it provides affordable housing and it’s well sized units also serve perfect for them,” says Amarmani. “The investors get high rental yields, as their capital investment is low. The community still has to undergo a lot of development, however, since the residential units are increasingly getting handed over in the area, retail spaces should be well planned and developed on time to accommodate the rising population and their needs and requirements in the community.”

Commenting on the occupancy rates, he adds that these are not very high but are decent as the community is still slowly developing. “The place covers a huge area, wherein few parts of the place are heavily occupied, and areas that are undergoing construction are more silent.”

International City

Demir says there are 3,600 units in the pipeline in International City until the end of 2020, based on developer announcements. “International City is one of the most affordable communities compared with the rest of the city, with easy access to both Shaikh Mohammad Bin Zayed and Emirates Roads,” says Demir. “Occupancy level in this place currently stands at 91 per cent. The existing supply in this area stands at around 35,000. Hence, the 10 per cent increase in the supply this year is likely to be absorbed easily by the investors and residents. The projects that were completed and handed over this year included Warsan Village Townhouses by Nakheel and many other single buildings by private developers. The place offers 9.3 per cent gross rental yield, one of the best areas.”

Downtown Dubai

Poon says 11 projects are expected to be completed next year, adding 4,832 new units in Downtown, with 27 per cent hotel and serviced apartments and 73 per cent residential units. Among the key projects will be The Address Residences Fountain Views and Sky View and Burj Vista by Emaar Properties.

“Downtown caters to large and nuclear families as well as executive working singles, and the place has an average occupancy rate between 80 per cent and 85 per cent,” says Poon. “All units delivered in the first half this year were under the hotel/serviced apartment category.

“The place was one of the best-performing residential markets in the city during the market upturn in 2011. Investing in a well-established master community like Downtown provides certainty and security.”

The area itself is a recognised brand with iconic structures such as the Burj Khalifa and the recently opened Dubai Opera. “By the end of 2021, all of Emaar’s flagship developments in Downtown will be completed, which is predominantly the completion of this mega master community,” says Poon. “This is an indication that the demand for property will only be on the up.”

Business Bay

Citing the Property Monitor, Dhama says more than 2,000 apartments and about 1,000 hotel rooms are expected in Business Bay next year. Some of the major projects to be completed next year include Damac Towers by Paramount, MajestineAlure with serviced hotel apartments, Marquise Square Tower, The Pad by Omniyat and Moon Tower by Arabia.

“Since the master developer, Dubai Properties, began selling plots in Business Bay to private developers in 2005, this community has emerged as one of the core business districts of Dubai,” says Dhama. “Investors can avail of several types of properties ranging from residential, commercial, hospitality and mixed use. Also, this community is located right off Shaikh Zayed Road, close to the airport, the Dubai International Financial Centre and Downtown Dubai, which has helped maintain stable investment yields.”

There are still undeveloped plots closer to the canal. “Occupancy rate in this area varies by building, with better-maintained buildings operating at more than 85 per cent occupancy,” says Dhama. “However, with the upcoming supply, these could also come under pressure. The place has a variety of stock available, both for residential and office units. This variation thus creates a disparity in overall occupancy and demand levels, with healthy demand levels being maintained for better-managed buildings as opposed to occupancy pressure for grade B stock.”

Jumeirah Village Circle

An emerging community with competitive prices, Jumeirah Village Circle (JVC) continues to evolve with its infrastructure is still under development. “Over 600 units have been handed over in JVC as of the third quarter. These include Al Yousuf Towers, Park Square and Pantheon Boulevard, among other projects from private developers,” says Dhama.

While a significant number of projects are still under development, existing infrastructure and community facilities, as well as proximity to locations such as Dubai Marina, Jumeirah Lakes Towers and Jebel Ali, “make JVC a popular location for renting and hence it usually tops the off-plan market activity tally,” says Dhama.