The smart way to go house hunting

Dubai's rent decline has everyone atwitter - and moving. From Karama to Ajman, word has it that people are moving to areas where rent is softening. Some of the hotspots mentioned are Jumeirah Lake Towers (JLT), Dubai Marina and Discovery Gardens, among others.

The changing market conditions in the real estate sector in the UAE have indeed made it easier for the tenant community to upgrade their homes or find better and larger accommodations, not only at competitive prices but on easier terms, too. I heard that some landlords are now willing to settle for 12 payments.

To get a first-hand look at the market, I tagged along with a house-hunting expatriate a week ago and explored a high-end residential community in Dubai, where one-bedroom apartments were going for Dh130,000 to Dh180,000 last year.

After scouring almost every empty flat, my friend found a one-bedroom unit with glass-panelled walls and a spacious balcony looking out onto a charming garden and a pool for Dh110,000. By JLT or Discovery Gardens standards, this is still expensive, but considering the location and amenities, I'd say it's a good deal.

The house search wasn't easy though.

Here's how this house-hunting friend snapped the deal:

1.) Know what you want and focus on it. Do you want a furnished or unfurnished flat in the Greens or on Shaikh Zayed Road? What's your budget? Can you afford two or four payments? Should there be a pool, gym or coffee shops nearby? Focus your search on these parameters. This will make hunting a lot easier. Check online ads, newspapers or ask around to get an idea of the prevailing market price.

2.) Get a notebook and write down the details of the flats you want to check. The shortlist should include the price, description of the property, name and phone number of the agent. Don't forget the agents' names. Some of them post the same ad many times, so you'd end up repeatedly calling them and asking the same questions.

2.) Ask a lot of questions before going ahead with the viewing, keeping in mind your list of 'must haves'. One of the things you should not forget to ask is how the apartment is placed. If it's facing a huge construction area, you know what you're getting into: a whole year of sleepless nights. I've seen many one-bedroom flats going for Dh95,000 to Dh100,000 and 99 per cent of them are right in front of a construction site. Trust me, those with a lake view or tucked away in a quiet spot are hard to find.

3.) Do the viewings during the day. Ninety-nine per cent of the apartments I checked don't have Dewa connections. Even if you have a really strong imagination, don't bother to go at night. Not even a flashlight or the agent's vivid description would help.

4.) Call the property agent the night before the viewing. Many of them don't have keys to the apartment and would need time to coordinate with the landlord.

5.) Be honest with your agent. Tell him or her your budget and requirements.

News Source: The Gulf News

A million dirhams is enough

Gregory Antioch, a senior sales negotiator at Smith & Ken, a property broker in Dubai, scratches his head as he tries to remember where property could be bought in the emirate for around the Dh1 million mark before prices started to slide last year.

His initial response is that such properties were “virtually non-existent”, before coming up with “or you may have found something at International City or Discovery Gardens, but that was it”.

So, even the proximity of a sewage treatment plant at International City, a development launched by Nakheel in 2002, the same year Dubai’s property boom took off when the market was opened up to foreign ownership, couldn’t keep investors away.

Just eight months ago it would have been difficult to find a studio apartment there for less than the price of a two-bedroom house in London.

Yet times have changed, and the same type of property can now be snapped up for as little as Dh320,000.

But the real bargains can be found in hot spots where once upon a time the prospect of buying property would have been little more than a fanciful notion, for the majority of people at least.

We’re talking about the likes of the upmarket Dubai Marina and Palm Jumeirah, the epitomes of “Dubai dream living”.

If you have a spare Dh1m lying around, you can now pick up a smart one-bedroom apartment at Time Place in Dubai Marina, says Mr Antioch. The same could be bought for about Dh2.2 m before the slowdown took hold.Other sought-after areas include the Springs, a community development where a two-bedroom villa with a garden and study is now selling for about Dh1.2m, compared to up to Dh2.5m before, and Jumeirah Beach Residence, where a one-bedroom apartment is going for Dh1.1m, down almost 50 per cent from Dh2m.

Compared to the heady days of property prices shooting up by 80 per cent in a year, mainly because of speculative buying, prices are expected to decline even further.

“There had to be some kind of price adjustment because prices in Dubai were just ridiculous, they were so overinflated and that was purely down to speculators buying anything up,” says Mr Antioch. “Before you would look around and would wonder why a villa in the Springs, for example, would be Dh3m. You could go to London and buy a whopping house for that amount, so why buy here?

“Now prices are coming down and, comparatively speaking, they’re fair.”

Prices may be on the decline, but where are the buyers? Mr Antioch says that “things practically stopped” at the start of the downturn in October of last year, with his sales going from about 30 a month to zero.

Signs of a slight pickup surfaced in early February, when brokers reported an increase in interest from buyers and the odd transaction taking place.

The buyers came with available cash, while the vendors, fearing a further drop in the value of their property, were looking for a quick sale.

Even though developers have begun to reduce the price of off-plan property, those who are on the hunt for a good deal are veering towards completed property.

Their profile has changed in other ways as well. They are not buying to turn a big profit within a matter of months. Instead, they want somewhere to live or for long-term rental purposes, and in a good location.

Developments that are proving to be the most popular right now are the Springs, Meadows and Greens, all by Emaar Properties, owing to the fact that they are the most established community schemes in Dubai and have good infrastructure and amenities in place.

“The price is right and they’re very family-orientated developments,” says Mr Antioch.

“You have all the facilities such as access to swimming pools and a golf course at The Greens. Arabian Ranches is also getting popular now that the traffic problems have been sorted out. People can get to Sheikh Zayed Road in 15 minutes instead of 45, so that makes a difference. And such developments will hold their prices because people want to live in them.”

Today’s buyers also have the cash to spare, so do not need a hefty mortgage, which nowadays is difficult to obtain. And compared to this time last year, when vendors ruled the roost, they are controlling the prices.

“It’s very much a buyer’s market at the moment in that they can pretty much demand what they’re looking for,” adds Mr Antioch.

“You get owners who are realistic and will accept an offer, whereas others are so stubborn and say ‘I’ll wait until [the price] picks up.’ But it’s not going to pick up in a hurry, it’s still on a downward spiral and it’s not slowing down. They’ve probably dropped another two per cent in the last month and more owners are becoming more and more desperate.”

Manju Bhatia, a senior property consultant at Prime Location in Dubai, says those who are buying are “hopeful that prices will recover in a year or two”.

“They are end-users and cash buyers,” she says. “They are reluctant to go for anything off-plan as they are scared construction won’t happen ... and people are selling completed properties for less than the market price because they have investment commitments to fulfil elsewhere.”

One buyer who remains confident in the long-term prospects of Dubai’s property scene is Andy Dukes, the first person to move into a villa at Nakheel’s Palm Jumeirah in early 2007. He paid about Dh1.8m for his four-bedroom home when the project was launched in 2001. At its peak last September, the property was valued at about Dh18m. Despite dropping by almost half, he is still in profit and has no intention of selling.

Mr Dukes also has a second home on Palm Jumeirah, which he rents to holidaymakers for a cool Dh53,000 a week, and he is considering making the most of the downturn by buying another property on the island for rental purposes.

“It’s a good development, they’re good-quality villas, they’re by the sea and the market is still a good long-term investment,” he says.

Chris Dommett, the chief executive of John Charcol, a mortgage advisory firm in Dubai, bought two properties in the emirate last year, when prices were at their highest. One is in Dubai Marina, while the other is in The Lakes, another Emaar development.

While he might wait for the market to regain its composure, he would have no hesitation in buying again.

“You’ve still got that choice between renting and buying, and if you buy now you’re getting a much better deal than you did last year,” he says. “I think a lot of people are rather glad they didn’t buy before and see now as a good time. You’ve still got a lot of people working here and who want to stay.”

He adds that the type of properties that will stand firm are ones in good locations that have been constructed with quality and integrity. “I’d be very careful about buying property in faraway locations by third-tier developers,” he says.

Those who have felt the sting of Dubai’s property boom are being even more cautious. In 2006, Saqib Iqbal bought one of more than 1,300 villas at Palm Jebel Ali, the second of three reclaimed island developments by Nakheel. But with construction of his home yet to begin, he faces a further three-year wait before being able to move in. Mr Iqbal and hundreds of other investors in Palm Jebel Ali recently signed a petition urging Nakheel to revise their payment plans to ensure instalments could be paid in line with the construction schedule.

Despite the lengthy delay, Mr Iqbal and his fellow investors want the project to be a success.

But until that day comes, he is reluctant to invest in more property in the emirate.

“Until there are proper regulations in place then I wouldn’t buy again ... you need transparency and a sign that things will improve to bring investor confidence back,” he says.

With such a mixed market, brokers are having a tougher time than ever in finding business. There was a time when the job of a broker in Dubai was a simple and lucrative one. The market was such that agents rarely had to leave their desks to venture out into the scorching summer heat and show somebody on the brink of becoming a customer a property.

The job simply entailed answering the endlessly ringing phones and “taking orders”, says Mr Antioch.

So the sudden screech of the brakes when the downturn set in took them by surprise. They now have to actually go out and find would-be property buyers, and sellers.

“Now that there are fewer speculators and the buyers are people looking for homes, it’s a longer sales process,” says Mr Antioch.

“Real estate agents now actually have to earn their money.”

The slowdown has even prompted brokers to be more creative when it comes to encouraging sales.

Smith & Ken recently started a “swap shop” scheme, whereby those struggling to sell their homes can do a simple exchange with someone looking to either downsize or upgrade their property.

The company has orchestrated about four successful swaps so far. “People can register their property, such as a two-bedroom villa in the Springs that they can’t sell, and we’ll hook them up with someone who’s got a bigger property but who maybe wants to downsize,” says Mr Antioch.

“They simply swap villas, with cash going either way. It’s such a simple concept, but it seems to be picking up quite well.”

The company is also attracting more sellers to its “rent to own” scheme. Through the service, sellers can rent their property to a potential buyer for a certain period of time, with the possibility of selling it in the end.

“There are more sellers willing to go with the scheme, we’re just looking for the buyers that are willing to do it,” adds Mr Antioch.

“Buyers who are struggling to sell their properties are now considering it because at least they know they’re getting some rent back, with the prospect of selling the property at the end of it. If, for whatever reason, they don’t complete the sale, then the owner just keeps the money that’s been paid, so it’s a bit of a winner for the owners.”

Other brokers are also getting more proactive, while developers still hoping to sell off plan need to prioritise customers over projects. They simply have to in order to encourage buyers back to the market, says Iseeb Rehman, managing director of Sherwoods Independent Property Consultants.

“Current market conditions call for more attention to customer needs and expectations, which has become our primary concern as we enter into the rationalisation phase following the start of the credit crunch,” he says.

“We have to be more flexible as Dubai streamlines its property business in anticipation of a steady industry rebound towards the end of the year.”

So, if you have a million dirhams lying around and are looking for a property in Dubai, the time might be right for you to start looking.

Source News: The National

Rental Fees in Dubai

Indeed it is true that there is a silver lining to every cloud. No matter how bad things may seem, some Dubai residents whose lease contracts are about to expire are likely to be relieved as rentals fall.

The Dubai Real Estate Regulatory Authority (Rera) is reportedly set to release, any time this month, the new rental index expected to show a 10 to 15 per cent drop in rentals in some areas. Some people, however, are saying that the reduction could be significantly higher and could be as much as 30 per cent.

Talk on Dubai's falling rentals is exciting average-income earners. Many are hopeful they will finally be able to move into bigger apartments which were once beyond their price range.

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A friend of mine who's living in Sharjah is thinking of moving back to Dubai now that rents in some areas have eased. I have just told her about an online advertisement promoting a "brand new four-star hotel" just off Shaikh Zayed road. The property owner is renting out Full Furnished Rooms for Dh4,500 a month. That's a lot cheaper than the old Hotel Apartments you will find in Bur Dubai!

It appears the property was meant to be a hotel, but the owner apparently decided to rent out the rooms for long term stays, at a very affordable prices. It is equipped with basic hotel facilities - swimming pool, gym, conference facilities, a sports bar, sauna, and other amenities.

Back in the days when rents were sky-high, it was impossible to find similar accommodation at that price. I have friends who paid the same rent last year for an unfurnished old room in Satwa. There was no hint of a "hotel feel" to it whatsoever - no gym, no pool, no sauna.

Given the number of people out of jobs or with shrinking salaries, there is apparently less demand for rental properties. Falling demand should mean there is a larger pool of empty spaces to choose from.

The less demand there is, the bigger the chance that rates will slide, and the more the probability of tenants haggling for a better deal. Recession has its upside.

I know an expatriate from Egypt who just got a fantastic offer from his landlord. He was paying Dh160,000 annually for a two-bedroom apartment in Jumeirah Beach Residence. Since his contract was about to expire, his landlord agreed to let him pay rentals on a monthly basis, instead of paying two cheques as before.

However, he recently found a similar apartment in the area that could cost him 15 to 20 per cent less, so now he's thinking of moving out.

Another expatriate from France who's living in Downtown Burj Dubai is looking to switch apartments. His one-bedroom flat costs Dh125,000 a year. If he were to transfer now, he could find a similar place in the area for Dh90,000 to Dh100,000, or about 20 to 28 per cent less.

Although there are still people reporting rent increases this year, there are certainly cheaper apartments waiting to be snapped up. The key to bagging a good deal is to look around, and then to negotiate.

Source: Gulfnews

Discovery Gardens | Service fees cut

Owners of properties at Discovery Gardens in Dubai will see their service charges significantly reduced, the developer Nakheel said yesterday.

The company is reviewing its budget for providing services such as security and the upkeep of the project’s communal areas, a Nakheel spokeswoman said. The move followed “recent reductions in the cost of services”.

When the review was complete, she said, “it is expected that a revised budget will be issued incorporating significant savings which will be passed on to all unit owners”. She did not indicate, however, when Nakheel would complete the review or how much fees could fall.

The announcement follows complaints from many of the project’s property owners that the annual charge was not reflected in the standard of building care.

At a reported Dh30 (US$8.17) per square foot, the fee is among the highest of any project in Dubai and about three times the cheapest rates, despite Discovery Gardens being built to cater to housing demand from middle- to low-income groups. Situated near Ibn Battuta Mall, the project has an expected population of more than 50,000.

The owner of a one-bedroom flat that typically measures 1,000 sq ft, has to pay Dh30,000 a year. Nakheel argues that unlike many other developments, the Discovery Gardens fee includes the cost of running a central air-conditioning system, known as district cooling, which accounts for a third of the charge.

Read the complete story here: The National Newspaper