Property investors are continuing to take a bath in Dubai as rents fell once again in August. According to a survey by the Khajeel Times and property management firm Asteco. Some of the more upmarket developments are beginning to stabilize, but with the outflux of ex-pats during the summer, falling property prices and a serious over-supply in most markets, rental prices continued their decline, and in many instances, renters are simply choosing to walk away from a new lease. The requirements in Dubai are a little different in that Islamic law does not allow for credit and renters are often required to pay a full years rent in the form of 4 post-dated cheques. This is an excerpt from the report.
Dubai Properties, Sama Dubai and Tatweer have merged in an attempt to lessen the impact of the financial crisis. Dubai holding now consists of just 4 divisions instead of the previous 7 – investments, hospitality, property and business parks. there is also talk of merging Emaar properties into this new vehicle.
As per usual, getting any solid factual information about the state of the UAE’s property investment market is difficult, but a recent survey by the Royal Institution of Chartered Surveyors (RICS) points to another rise in commercial property defaults in the UAE for the second quarter.
More on Investment property in the UAE – Distressed commercial property on the rise
With more financially distressed property on the market than you can shake a stick at, real estate auctions seem to be the best way of moving excess inventory, and will hopefully give some idea as to current market prices in the UAE. At the moment it is anyone’s guess. Sherwoods are organizing an auction of some 50 properties in the UAE in June. Their press release is below:
A well-respected Kuwait-based investment bank has said that the outlook for the UAE real estate market remains negative.
Kuwait Financial Centre, also known as Markaz, said in a report that oversupply in the property market would likely constrain demand and impede economic growth. Markaz said it expects the UAE’s real gross domestic product to grow this year by 0.7 per cent, down from 5.8 per cent in 2008.
Beaches near Burj Al Arab and another one located close to the Umm Suqeim Park have been closed by the Dubai Municipality as traces of Red Tide in these two beaches have surfaced again. Both Abu Dhabi and Ajman have also seen the red tide wash up on their shores this week.
The Indian envoy to the UAE, Talmiz Ahmad says there will be no help for workers returning to India as the global downturn drops demand for unskilled workers in the construction sector in the Emirates.
More on Indian Envoy to UAE says No Help for Returning Workers
The UAE Central Bank is considering tough measures including setting up a Dispute Resolution Committee to look into cases against loan defaulters, in a bid to help lenders ride out the current economic situation. Defaulters could find themselves blacklisted – which in the case of foreigners will also include them being prevented from leaving the country. A blacklisted person could face a number of difficulties in either working, doing business in the UAE, or seeking future finance.
More on UAE considers new laws to prevent Ex-pats from leaving after loan defaults
