Property news

Dubai Marina is one of the most popular developments in the emirates to buy property along with Palm Jumeirah and Jumeirah Lake Towers, a report suggests.

Data from real estate website propertyfinder.ae has found that the Dubai Marina waterside project received more than 18% of searches among would be buyers in the fourth quarter of 2010 and 18.02% of searches for rental properties.

The Palm Jumeirah project had 12% of buyers searched and in rentals Jumeirah Lake Towers was the second most popular spot with 8.58% of searches.

Least popular among potential buyers was Jumeirah, with less than2% of enquiries, with The Lakes and Green Community notching up a fraction. In the rental market Dubai Silicon Oasis, International City and Dubai Land attracted the least attention, each with less than 2.5% of online enquiries.

Among buyers, the single most popular price band was up to AED2.5 million, however, the gross majority of searches targeted properties at AED1 million or under. While renters had tighter purse strings with the top five price searches all aimed at property costing AED100,000 or less per year. Enquiries for properties at more than AED200,000 a year were almost nonexistent.

More than a third of buyers were looking for an apartment and 25% viewed villas. Two bedroom properties were most popular and almost no one was looking for a studio. Those looking to rent favoured two and three bedrooms and were also not looking for studios.

The total value of real estate deals in Dubai plunged 65% in 2010 as new supply squeezed market prices, a new report has said.

Meanwhile, the gap between supply and demand is expected to widen in Dubai in 2011. Sales are slowing. The number of deals fell by more than half in the third quarter of 2010, according to the latest report from consultants Jones Lang LaSalle. Less than 600 property transactions were completed, down from more than 1,200 in the same period in 2009.

The market is likely to see a further 25,500 units come online in 2011, analysts said, with no major project cancellations expected over the next year. ‘Dubai’s residential market will continue to experience a situation of oversupply and prices are not expected to recover before 2012,’ the report said. Apartments will make up 79% of stock.

Lending will remain a key factor in market recovery. The report suggests that the residential market will likely see improved lending in 2011 as more banks are injecting liquidity into the mortgage market.

Real estate prices in Dubai fell 1.7% in February and could fall up to 30% in next two years in a sign that the emirate’s beleaguered property market is still not back on track.

The latest figures from Deutsche Bank show that although the pace of decline is slowing there is still likely to be further downward pressure on the market.‘We do not see any improvement in fundamentals that could trigger a recovery, the bank said in its report.

Residential property prices in Dubai have now fallen by 62% since their peak in the middle of 2008 after the global economic downturn caused mortgage lending to dry up and speculative demand ground to a halt.

And in a separate report it is predicted that prices are likely to decline a further 25 to 30% this year and in 2012. The gloomy prediction from investment bank Rasmala is based on the fact that there is too much supply and not enough demand.

‘We believe the UAE property sector is undergoing mid-cycle dynamics. House prices have corrected by 45 to 55% but rising oversupply could see a further 25 to 30% drop in the next two years,’ Rasmala said.

‘While supply dynamics may be somewhat different for Dubai and Abu Dhabi in terms of volumes, their demand dynamics almost mirror each other in terms of a low appetite for new housing as financing remains tight and negative equity concerns linger,’ the report added.

Developers are, however, seeking to sort it out. The supply of fresh real estate in Dubai will tumble by nearly a third this year as developers hold back units in a bid to manage the city’s saturated property market, according to real estate consultants Jones Lang LaSalle.

The supply of residential, retail and hotel real estate is expected to be 32.2% lower than in 2010, a report from the real estate consultancy showed.

‘The supply clearly is being held back. That is partly due to the market factors and it is partly due to the fact some developers have had trouble financing projects and making the last payments,’ said Craig Plumb, head of research at JLL. ‘There are a number of buildings that have been completed and have not been released to the market,’ he added.

But thousands of units are scheduled for release this year, despite an estimated 40% vacancy rate in homes and offices across the emirate. JLL said some 25,000 residential units will be released on to the emirate’s property market this year, but this is a drop of 31% when compared to 2010.

The hotel market will see the largest decline in supply, with 3,400 new rooms expected to come on stream in 2011, around 55% less than the 7,700 that came online in 2010.

Plumb said an added number of new units may be held over to 2012 in a bid to pace the supply being released on to the market. ‘Some space will simply get pushed to 2012. The supply we have for 2011 will probably finish up less than we are forecasting,’ he explained.

In Abu Dhabi, the situation is reversed, JLL data shows. The capital will see a 108% surge in new real estate this year, driven by its residential market. Some 25,000 new houses and apartments are due online this year, a massive 346.4% rise in the 5,600 units released last year.

‘Dubai is past the peak of its annual pipeline of new supply while Abu Dhabi is still approaching the peak for new supply,’ the JLL report said.

Industry experts have long acknowledged the oversupply problem facing Dubai. However, there is little agreement on how long it will take to clear the backlog. Mohamed Alabbar, chairman of Burj Khalifa developer Emaar Properties, said in November it would take at least 20 months for the city to absorb its surplus stock.

Chris O’Donnell, chief executive officer of debt hit developer Nakheel, said in December that the figure was closer to three to five years.

Apartment rents in some of Dubai’s most popular areas have fallen by about 30% in the last 12 months but villa rents are largely stable, it has been revealed.

The latest figures from the emirate’s Real Estate Regulatory Agency show that apartment rents in Dubai Marina, Palm Jumeirah, Discovery Gardens, and Jumeirah Beach Residences have all seen significant falls.

Prices for a one bed apartment in Discovery Gardens, which houses about 41,000, currently stand at AED40,000 to AED50,000 in the latest index, compared to AED55,000 to AED65,000 a year earlier.

The Rental Index is designed to give landlords and tenants in the emirate a guideline to pricing rents when negotiating contracts. The index is presented in the form of an online rent calculator on RERA’s website.

Dubai Marina, which is consistently voted the most popular for would be buyers and tenants, also saw a big fall in rents. Rents for a studio in the Marina start at AED35,000, down AED10,000 compared to the March 2010 index, while minimum rents for a one bed have fallen more than 30% to AED45,000.

Apartments on Palm Jumeirah have also witnessed a significant drop, with minimum rents of AED60,000 quoted, compared to AED90,000 in March last year. Two bed apartments have seen rents fall AED40,000 to AED90,000, RERA said in its online guide which takes the form of a rent calculator.

Falls of 20% plus were also seen in The Greens where the top price for a two bed has fallen from AED130,000 to AED90,000. Rents also dropped in Jumeirah Beach Residence, down AED5,000 for a one bed apartment and in Jumeirah Lake Towers where the minimum rents for a studio fell by AED12,000 to AED28,000.

Studio apartments in International City were among the lowest rental values, according to the RERA guide, starting at just AED15,000, down AED10,000 from March 2010.

Villa rents have also declined in the past year but some areas have witnessed a stabilisation in values, the RERA guide added. Rents for a four bed villa on Palm Jumeirah remained stable at AED300,000 to AED350,000, as did rents for a three bed villa in The Meadows at AED170,000 to AED210,000.

However, other areas of Dubai still saw declines with the minimum rent for a two bed villa in The Springs down AED20,000 to AED70,000 and minimum rents for a four bed villa in Arabian Ranches now start at AED160,000, some 25% lower than in March last year.

Some 4,000 planning applications a year are expected for the South Downs, the UK’s newest national park which officially comes into being on Friday (April 01).

One of the largest and most complex duties of the Downs National Park Authority will be to direct and control development in the National Park. Southampton planning and urban design consultancy Turley Associates, understands that the new authority could receive some 4,000 applications every year, making it the eighth largest planning authority in the UK.

The size of the South Downs National Park is impressive, extending across 1,650 square kilometres and with more than 100,000 living within its boundaries. The Park extends across 15 local authorities, from Winchester in the west to Eastbourne in the east. Close to eight million people live within one hour of its boundaries, points out Stuart Irvine, associate director, Turley Associates.

‘The Park authority will from 1 April take responsibility for all development within its boundaries. We estimate that the Authority will receive 4,000 applications a year, making it almost twice the size of authorities such as Liverpool and Manchester in terms of applications processed and four times the size of the New Forest National Park,’ he said.

The South Downs National Park is unique amongst the UK’s 15 other national parks in that its landscape is and continues to be shaped by man’s activities and that it includes some large towns and villages, including 16,000 people living in Lewes and 13,000 people living in Petersfield.

‘A more flexible planning policy will be needed in the South Downs National Park when compared to other parks to foster economic and social well-being, particularly in these larger settlements,’ explained Irvine.

Unlike the UK’s other National Parks, the South Downs National Park Authority’s legal responsibility for determining the majority of its planning applications will be delegated to the 15 local authorities that fall within its boundaries.

‘The South Downs National Park Authority will effectively pay local authorities for the services they provide and in effect, the current process of lodging applications will remain unchanged. This is a practical and sensible solution,’ said Irvine but he added that the South Downs National Park Authority will however determine ‘significant’ applications.

‘The Authority has provided some initial guidelines on what it considers significant, but not any specific guidance. It appears that a flexible case by case approach will be taken. We expect the Park Authority to consider about 150 applications a year to be significant,’ he added.

Significant will typically mean schemes of more than 29 dwellings or 1,000 square meters of commercial floor space within urban areas, but outside of the main settlements, it will also include schemes of three or more dwellings.  Other forms of development, such as tourist accommodation, renewable energy scheme and proposals that involve significant external lighting are also likely to be considered as significant.

‘Developers may face uncertainty as to whether their scheme is considered to be significant, potentially a very late stage, with firm guidance only being given once an application is made. This creates uncertainty and developers would be advised to include the Park Authority in any discussions at the pre-application stage if they believe it might be considered significant,’ Irvine added.

The vast majority of people in the UK who buy a new home are satisfied with the overall quality of their purchase and would recommend their builder to a friend, a new survey shows.

The results of House Builders Federation’s 2011 customer satisfaction survey show levels of customer satisfaction that match or exceed those in any other industry or sector. It says that the independently verified results are a testament to the industry’s commitment to deliver the high quality product and service that today’s demanding home buyers rightly expect.

The survey found that nearly nine out of 10 buyers, some 88%, are very or fairly satisfied with the overall quality of their new home and a similar number, 86%, would recommend their builder to a friend.

Despite regular, often unfounded criticism from industry detractors, the latest survey results confirm once again that home builders are committed to quality, the organisation says as it shows that the vast majority of new home buyers are satisfied with the quality of their home and the service provided by their home builder.

‘These results are truly outstanding and a testament to the efforts made by our industry to deliver ever increasing satisfaction levels to new home buyers. All the evidence we now have demonstrates categorically that as an industry we are delivering in the overwhelming majority of cases the type of product our customer’s want, in a manner with which they are satisfied,’ said Stewart Baseley, executive chairman at HBF.

‘It is essential to achieve these high satisfaction levels when providing a product that represents for most people their largest investment both financially and emotionally. But creating a great home is not straightforward. Each home built is different and presents a different challenge. It takes commitment and dedication from the chief executive’s office to the construction site involving everyone from directors to tradesmen to customer facing staff. These results are a credit to our industry and all its employees,’ he added.

Imtiaz Farookhi, chief executive of National House Building Council, which analyses the survey data for HBF said it builds on a significant improvements achieved last year.  ‘NHBC will continue to work closely with homebuilders building on the investments we’ve made in training, through initiatives such as the Consumer Code for Homebuilders and The Callcutt Task Group on customer satisfaction. Customer satisfaction with new build housing now compares extremely favourably with other UK industries and products,’ he said.

UK residential property prices increased by 0.5% in March, an indication that the real estate market is proving resilient despite gloomy economic news and fears about job losses.

The latest Nationwide property index published today (Thursday March 31) shows that prices have increased 0.6% on a quarterly basis and are now 0.1% higher than a year ago. Prices have not risen slightly for three of the past four months.

‘The outlook remains uncertain, but all things considered, this is unlikely to mark the beginning of a strong upturn in prices. The economy entered a soft patch at the back end of 2010, and there have been few signs of a strong bounce back. The jobs market remains challenging and Nationwide’s Consumer Confidence Index suggests that sentiment has fallen to an all time low in recent months,’ said Robert Gardner, Nationwide’s chief economist.

‘While demand is likely to remain fairly soft, a rapid increase in the supply of properties also appears unlikely. Low interest rates and a stabilisation in labour market conditions have prevented a rise in forced selling, and the subdued market outlook is deterring many sellers from entering the market,’ he explained.

‘With the economic recovery expected to remain sluggish, the most likely outcome is that the property market will follow suit, with low transaction levels and prices moving sideways or modestly lower through 2011,’ he added.

He also said that interest rates will play a key role in the recovery of the housing market. The Bank of England is likely to start the process of returning interest rates to more normal levels at some point in 2011.

‘Rate increases may exert more of a drag on the household sector than would have been the case before the recession. Households are more sensitive to rate increases. Mortgages account for around 85% of household debt and since 2008 the proportion of mortgages on variable interest rates has risen sharply, from 48% to 62%,’ said Gardner.

‘Ultimately, the key factor determining the impact of higher interest rates on households is the economic backdrop against which it takes place. If the rise in interest rates is gradual and occurs when the economy is recovering strongly and the labour market is strengthening, then the impact on households and the housing market should be fairly modest,’ he explained.

‘However, still high levels of debt and the increased share of variable rate mortgages suggests increased grounds for caution, since the household sector is likely to be more sensitive to interest rate increases. This is an important consideration, after all, households account for over 60% of spending in the economy, and the recovery remains fragile,’ he added.

Although more households may choose to switch to fixed rate mortgages in the quarters ahead, reducing the sensitivity to rate rises. But Gardner points out that the incentive is blunted by the fact that the rates on fixed rate deals are often higher than the variable rate people are currently on. ‘This is because the cost of fixed rate mortgages is linked to longer term interest rates, which are higher than the Bank Rate. Moreover, the differential may widen further in the months ahead long-term interest rates may move up more sharply than the Bank Rate as investors anticipate further interest rate increases ahead,’ he explained.

High net worth individuals from around the world have been competing to buy a piece of paradise in Australia at a bargain price.

The lavish Orpheus island resort on the world famous Great Barrier Reef which has hosted celebrities such as singer Elton John and actress Vivien Leigh has been on sale for just AU$10 million, some five million less than it was bought for five years ago.

Now it is reported that after some fierce bidding it has been bought by Computershare founder Chris Morris. The Melbourne based businessman, who started the investment services provider and now runs hotel chain Colonial Leisure Group, said the resort would reopen in July after minor refurbishments.

Morris said the resort would be part of his CLG group, which currently runs 15 hotels, including the well known Portsea Hotel in Victoria.

According to selling agent Paul Nyholt of CB Richard Ellis, there had been 150 inquiries regarding the island resort from Australia and overseas, most of them high net worth individuals and hotel resort owners. ‘The market for islands is limited and we don’t often see them come on the market,’ he told The Australian.

The tropical island is 190 kilometres southeast of Cairns and 80 kilometres northwest of Townsville and is accessible by seaplane, boat and helicopter. It includes 21 waterfront guestrooms, a bar and restaurant, gymnasium, tennis court, two swimming pools and guest facilities.

As well as Elton John, singer-actor Phil Collins has been a guest, and it is understood Hollywood stars Mickey Rooney and Vivien Leigh, who starred in the 1939 Hollywood classic Gone With the Wind, have also stayed at the glamorous resort.

It was sold with a seven hectare elevated lot that has development potential. The rest of the 1,368 hectare island is mainly national park.

The Brazilian government is tightening a law that restricts the amount of land foreigners can buy in a move that is aimed at preventing foreign investors from circumventing the interpretation of a law that restricts their direct acquisition of land.

The move comes after agricultural minister Wagner Rossi recently hinted that changes were afoot. ‘We need to distinguish properly on the one hand between speculators and sovereign funds, which are a threat to our sovereignty, and on the other side, foreign investors who come with good projects,’ he said.

It is understood that a new decree will prohibit non Brazilians from buying controlling shares of companies that own vast tracts of territory in the country. Brazilian Attorney General Luiz Inacio Adams has confirmed in a statement that a new ruling exists.

According to O Estado de Sao Paulo the Attorney General’s Office has already issued copies of the ruling to state commerce councils responsible for the registration of company agreements. It’s not clear if deals already agreed could be suspended by tribunals.

Since 1971 the Brazilian government has limited the outright purchase of rural farmland by foreigners or companies based abroad for food security reasons. The law says that foreigners can own no more than one fourth of a county, and no one nationality can own more than 10%.

Under current legislation foreigners could purchase up to 50 modules, ranging from 250 to 5.000 hectares depending on the region and soil yield.

It is estimated that currently, foreigners own 4.5 million acres (1.8 million hectares) of Brazilian land, an increase 11.5% from 2008, according to the government agency charged with land distribution.

As one of the world’s most important agricultural powers, Brazil last year severely restricted all new farmland investment from abroad amid fears that foreign governments, led by China, were snapping up land in emerging markets to boost their food security.

However with global food prices hitting a record in February, Brazil is also eager to attract new capital to the sector to increase its share of world agricultural exports while continuing to screen out unwelcome sovereign investors owned entities.

The Brazilian government, under the previous president, Lula da Silva, in 2010 reinterpreted the law to restrict foreign investment in agricultural land after watching foreign governments including China, South Korea and the Gulf states buying land in Africa and elsewhere to increase their food security.

‘Some of these countries are great partners in other areas, but having them buying land in Brazil creates some sort of sovereign risk for us. This is not part of our plan and we are not going to allow that,’ Rossi pointed out.

New British Airways daily flights from Gatwick to St Lucia in the Caribbean have been welcomed by property developers and second home owners as a move that will boost the real estate sector and the holiday rental industry.

St Lucia, part of the Windward Islands chain in the West Indies is a long standing holiday favourite for the British. In the last five years there have been numerous new developments of homes for second home ownership with attractive tax incentives, as well as new facilities and services that support a luxury lifestyle reflecting its luxury reputation.

The new flights will enable the many British home owners to have greater access and flexibility in reaching their homes, as well as boosting opportunities for renting them out to holiday makers.

Developments such as The Landings, a luxury marina development in the north of the island where 70% of their buyers have been British to date believe it will make a big difference to the sector.

‘The increased airlift is very welcome and makes a big difference to both the tourist and the real estate markets,’ said Ollie Gobat, who was born on St Lucia, and is sales director at The Landings.

‘An island can only develop these sectors with strong airlift and this shows the increased popularity of St Lucia as a holiday destination and place for a second or even third home. The allure of St Lucia’s incomparable natural beauty and friendliness has led to this increased demand and we see it continuing to grow,’ he explained.

The Landings is an ultra luxury development of homes overlooking its own private marina near Rodney Bay, which is in the popular north west of the island. New facilities that have opened recently close to The Landings include a new casino, the first for the island, a multi million pound shopping mall with designer and duty free shops, multi screen cinema and new bars and restaurants at the nearby Rodney Bay marina.

One of the unique aspects of The Landings is that it can offer the only freehold titled ownership of beachfront properties, which are normally sold as leasehold in St Lucia, as it is built on reclaimed land. The Landings is now in phase three of development and is offering a range of property to purchase which includes beachfront apartments.

In addition to the harbour, the extensive amenities on site include a beachfront club lounge and restaurant with beautiful views over the bay plus a fine dining restaurant overlooking the marina, several pools, tennis courts, concierge services and shops. There is also a full service hair salon, fitness club and spa.

The Landings provide water sports facilities including sail boats, wind surfers, kayaks and snorkelling equipment for use. Owners at The Landings also have membership at the St. Lucia Golf and Country Club, which is a three minute drive from the resort.

Confidence is returning to the South African real estate market and the country’s inclusion this year in the BRIC group of major emerging markets is set to boost foreign investment.

South Africa’s inclusion into the group that currently includes Brazil, Russia, India and China, means it will become BRICS and legitimises South Africa as a future global power.

According to the latest Sage Property Report from the Standard Bank, one of the largest banks in Africa, confidence in the South African property market is returning with an 8.3% year on year growth rate in the median property prices in August following a 7.3% rise in the previous month.

Despite the recession, Clifton on the sought after Atlantic seaboard coast, which is rated the top suburb in South Africa, saw prices rising by 48% last year to an average of R16.2 million.

Property developers Lace Market Management, originally formed in the UK in 1991, has focused its attention on exclusive developments predicts that foreign buyers will be attracted by the inclusion in BRICS.

‘We came here 10 years ago, fell in love with the Cape and wanted to spend time here. As property investors, this location and lifestyle would have been the ultimate buy for us when we came here in terms of investing money, getting a return and getting usage,’ said David Higginson, who founded the company with his brother John.

They sell to foreign and local investors looking for a blue chip property investment with solid returns. One offering is Ebbtide which consists of ultra modern, north facing units that feature energy conserving devices such as smart lighting and tinted glass panelling, and generates its own electricity which is stored in batteries for uninterrupted power supply in emergencies.

‘Over 10 years we’ve built a niche clientele which trusts our product’s offering. They know that when they come here, that this is actually something pretty special and they know they’re going to get good service. We have people coming from Johannesburg two or three times a year, and Europeans coming once a year,’ he explained.

‘The big slingshot effect we’ve had over the past five years where property prices jumped by 50 to 60%, which I don’t believe is healthy for any environment, has stabilised now, and top blue chip property investments should stabilise to between 8% and 12% and I think that’s a very fair assumption to make, and quite conservative at that,’ added his brother.

‘The fundamentals of the South African property market are sound. But we’re not only after growth. We are investing in key areas. Camps Bay, Clifton, Bantry Bay are all key areas for us,’ he added.

‘South Africa’s inclusion into the circle of BRIC countries is only going to strengthen the attraction for investors,’ explained David. He dismissed concerns about the volatility of the rand. ‘This is perhaps the biggest concern for a foreign investor. Yet, the rand has been one of the best performing currencies in the past three or four years and it has been pretty stable. I always say that by bonding 50% you are hedging your currency, and there is a way of forward buying as well,’ he said.