Monday, September 5, 2016

PRIME PROPERTIESOnline: www.gulfnews.com/GN-Focus Facebook.com/GNFocus Twitter.com: @GNFocus Instagram: @GNFocus

PAG

E 3

PAG

E 4

PAG

ES 6

-7

●● Prime real estate in the emirate spikes after sustained demand from Indian, British, Saudi and Russian nationals

Foreign buyers keen

on Dubai

Even though rents and sales prices are flat in Dubai’s broader

market and softening ten-dencies are expected to last throughout the year for the residential sector, demand for prime prop-erty seems to be healthy enough to continue out-performing the market.

Consultancy Knight Frank’s UAE Real Estate Mid-Market Review in June shows that prime property in Dubai has been outper-forming the market aver-age with prices rising by 2 per cent in the first quar-ter of 2016 over the fourth quarter of last year.

Experts say that this has to do with controlled supply being kept in pace with demand, continued government infrastruc-ture spending, strong or returning buying pow-er from foreign property investors and the pros-pects of Dubai hosting the Expo 2020.

In terms of nationalities, the most active foreign buyers in the Dubai prop-erty market last year re-mained Indians, followed by citizens of the UK and Saudis, Dubai Land De-partment data reveals.

TURN TO PAGE 3

By Arno MaierbruggerSpecial to GN Focus

STATUS UPDATE:

Dubai Canal

●● Work on the Dubai Canal is in full flow as its year-end launch nears, as seen in this photo taken by GN Focus’ Aiza Castillo Domingo from the roof of the JW Marriott

Marquis hotel. For more on the project, see our infographic on pages 6-7

SPOTLIGHT ON CITYSCAPE

Premier property exhibition starts tomorrow

MORTGAGE CAP DEBATEGN Focus looks at the pros and cons

HOMEBUYER’S GUIDE

This quick primer has all you need to know

PRIME PROPERTIES 3Gulf News | Monday, September 5, 2016

CONTINUED FROM PAGE 1

Printed and published byAl Nisr Publishing LLCDistributed byAl Nisr Distribution LLC

Dubai P. O. Box 6519Editorial: 04 406 7473 Advertising Sales: 04 406 7455Email: gnfocus@gulfnews.comAbu Dhabi P. O. Box 7441 Tel: 02 634 5144

A GULF NEWS PUBLICATION EDITOR — GN FOCUS Keith J. Fernandez | DEPUTY EDITOR Sankar Sri Pillai | ART EDITOR John Catherall | DEPUTY ART EDITOR Giovan Paz | DESIGNER Pranith RatheesanDEPUTY CHIEF SUBEDITOR Priya Mathew | SUBEDITOR Riaz Naqvi | PRODUCTION EDITOR, GN PUBLISHING Keith LangfordSENIOR PICTURE EDITOR Verina Durand | PICTURE RESEARCHER Harriet Santos | OFFICE SECRETARY Ma Cecelia Jyrwa HEAD OF ADVERTISING Tripti Singh | SALES MANAGER Sundar Ghosh | ACCOUNT MANAGER Isha Bhatia AD CONTROL Gordon D’Souza | PRE-PRESS SUPERINTENDENT Sarder Bakiruddin | PRE-PRESS OPERATORS Yousaf Naeem, Shirantha Mendis, Atul Paradkar, Sohellur Rahman, Eliezer Semine

EDITOR-IN-CHIEF Abdul Hamid Ahmad | DESIGN DIRECTOR Miguel Gomez | PRODUCTION EDITOR Omar Ali

While the share of Chi-nese and Russian buyers is comparably small, it is expected to rise as a re-sult of a shift expected this year in the aftermath of the UK’s Brexit vote.

Russians are coming?For example, Rus-

sian buyers with a bud-get of more than $1 mil-lion (Dh3.67 million) are looking at the UAE as a prospective market once again. According to Mos-cow-based real estate agency Tranio, the UAE is the most popular non-Eu-ropean country desti-nation for Russians with such a large budget.

In terms of cities, Dubai outranks even New York,

Barcelona, Miami and London.

“Remarkably, many of these places have lower property prices than Mos-cow where a square metre costs $5,297 on average,” says Tranio property an-alyst Yulia Kozhevnikova in a recent study acquired by GN Focus, adding that “Dubai remains one of the cheapest cities for Russian buyers in our top ten list.”

However, despite de-mand picking up, Russian buyers still need to plan their budgets wisely.

“Based on our most re-cent requests, Dubai re-mains a sought-after in-vestment destination [for Russians],” Daria Batiuk, Tranio’s Sales Manager

in Dubai, tells GN Focus. “However, our customers’ budgets have decreased significantly, mainly due to the rouble devaluation.

“A lot of our clients are looking to invest in rent-al properties now and the most popular are studios and small apartments. We also get a lot of enquiries for off-plan property.

“The average budget for buy-to-let proper-ties is anywhere between $110,000 and $450,000, compared to $1.24 million in 2014.”

But this should improve over time, Tranio suggests.

“Dubai is still a much-appreciated over-seas property investment destination, but the most significant change is that our investors have small-er budgets at this point of time,” says Bianca Juta-ru, Tranio’s international spokesperson.

In turn, investment by Britons in the UAE will

However, even if Brit-ish real estate investment in the UAE takes a dive, it does so from a high level. Last year, Britons injected close to Dh11 billion in the local property market, al-most as much as investors from Canada, Russia, Chi-na and the US together.

The leaderHowever, the proper-

ty investment champi-ons in the UAE remain Indians who mainly look for real estate in Dubai with Downtown Dubai and Dubai Marina being favoured addresses for apartments and Reem and Dubailand when buying villas, data from property portal Bayut.com reveals.

Indians in fact have been the largest non-Ar-ab investors in the Dubai real estate market in terms of both value and volume since 2012.

Over the past three years, Indians invested

Dh44 billion here, Dubai Land Department data shows, of which Dh20 billion has been spent in 2015 alone in more than 8,700 transactions backed by a booming In-dian economy.

“India is an enormous economic and demo-graphic power at the glob-al level, experiencing high growth rates that contrib-ute to the rise of the mid-dle-income group in the community,” Sultan Bin Butti Bin Mejren, Direc-tor-General of the Dubai Land Department said in a recent report.

“India and the UAE en-joy historical trade rela-tions, and our data in-dicates that the Dubai property market is of high appeal to Indian investors who always top the for-eign property investors list in the Dubai market, in terms of the number of transactions and gross to-tal value,” he said. n

Foreign buyers keen on Dubai

Gulf News Archives●● Dubai Marina is among Indians’ investment hotspots

quite certainly dip in the future, notes Craig Plumb, Head of Research at JLL MENA, in the prop-erty firm’s Dubai Real Estate Market Review Q2 2016. “Overall, there is a

slight probability of Brit-ish investors being neg-atively impacted by the devaluation of the British pound following Britain’s decision to exit the EU,” he explains.

Buy low, sell high is a logical strategy. Although difficult to implement, especially in Dubai’s volatile market, it is relatively easy to achieve with capital, patience and

a balanced perspective. Finding the exact absolute trough/peak is futile; instead a more effective target is acquisition/disposition within a 5-10 per cent range around the respective extremes. Short cycles, quick pivots and extreme price swings mean for investors the opportunity to acquire at a discount or exit at a premium is usually nigh in Dubai.

Now, we start a new investment season and the question remains: have Dubai real estate prices bottomed out yet? Our analysis: this is unlikely. Some key industries are showing signs of relative stability — available business activity indicators are still down compared to two-to-three years ago, yet seasonally adjusted, they are relatively stable over the past couple of months.

Job creation and net job growth are the key challenges and barometers of market prospects. More specifically, the relevant indicators are medium-high to high income job growth. The average investor buys individual units in investment zones, which are primarily affordable to the mid-high to high income segments. Middle and mid-low income housing are still undersupplied — households in these brackets often live in crowded, rapidly depreciating homes or commute from other emirates. Development of mid-low and middle income homes is challenging and often financially unfeasible. Instead, supply for mid-high and high income households drives trends. Indicators are limited, but the available evidence does not support price stabilisation yet.

Low oil prices and a strong US dollar are barriers for regional economic and job growth. Although Dubai’s economy derives minimal GDP from oil, it is the region’s hub and will not significantly decouple from the industry until the region does. The strong US dollar creates challenges for tourism-linked industries such as hospitality and retail.

In July, property prices were still 34 per cent above 2011 trough prices, according to Phidar’s House Price Apartment Index. Prices are roughly back to mid-2013 levels, during the last upturn, when the oil price was about $100 (Dh367) per barrel. Prices are similar to those in the second quarter of 2009, hit in the previous downturn, when oil was around $50-60 a barrel, a premium to current oil prices. Similarly, the US dollar is stronger than in either period, increasing relative price for foreign buyers in their home currencies.

In the absence of an irrational market run, prices should decline, which will help the market reach the 5-10 per cent range around the trough, a fruitful investment zone.

— The writer is Managing Director, Phidar Advisory

●● Signs do not indicate price stabilisation

By Jesse DownsSpecial to GN Focus

Shu

tter

stoc

k

●● Visitors chat with real estate professionals at Cityscape Global 2015. This year’s show is expected to attract more than 40,000 visitors from around the world

Tom RhodesExhibition Director,

Cityscape Global

Are we there yet?

The UAE remains the region’s most attractive property market but with

some distance to go before it hits bottom, this week’s gathering of new and re-packaged developments at Cityscape Global in Dubai serves as an investment options shortlist ahead of a predicted market rebound prior to Expo 2020.

The annual property show, now in its 15th year, brings together more than 300 exhibitors from over 30 countries, says Exhibi-tion Director Tom Rhodes. The event begins tomor-row and runs until Thurs-day at the Dubai World Trade Centre. It is expect-ed to attract in excess of 40,000 visitors.

“As Cityscape gears up for its landmark 15th an-niversary, it’s important to note it coincides with Dubai getting ready for one of the most import-ant events in its timeline,” Rhodes tells GN Focus via email. “We are excited to welcome Expo 2020 as part of the exhibition this year, working together with Dubai South, the de-veloper of the masterplan where the expo site will be located.”

Rhodes expects several announcements from de-velopers looking to lever-age the expo effect as well as the broader real estate market in line with na-tional development plans. Among them is Dubai South, the aerotropolis around Al Maktoum In-ternational Airport. Dubai South is launching two projects from its Residen-tial District at the show: The Pulse and The Villag-es. Ahmad Al Ansari, Act-

Several new developments will be unveiled at this week’s Cityscape Global exhibition. Here are five to look out for.

1 The Tower at Dubai Creek Harbour To be unveiled tomorrow, the skyscraper by

Spanish-Swiss architect Santiago Calatrava Valls is the centrepiece of a six-sq-km community near the wildlife sanctuary on Dubai Creek. It will feature a recreation of the legendary Hanging Gardens of Babylon.

2 The Pulse and The Villages Two projects in Dubai South, a 376-sq-km city

around Al Maktoum International Airport and the Expo 2020 site. Both offer a “new and incomparable model of urban living celebrating nature and diverse populations”.

ing CEO of the master de-veloper, said the projects will go on sale in October.

Investors will also be queuing up to look at the Tower at Dubai Creek Har-bour from Emaar Proper-ties. The building anchors a six-square-kilometre development by Dubai Creek. Managing Director Ahmad Al Matroushi says Emaar Properties will also showcase new projects in Downtown Dubai, Dubai Hills Estate and the Arabi-an Ranches.

Of existing develop-ments, interest is particu-larly high in the Jumeirah Village area, the realtor Asteco says, as the neigh-bourhood’s location com-pares favourably to newer projects sited south of Mo-hammad Bin Zayed Road. In the first half of this year, Dubai added 2,000 new primarily mid-level and affordable apartments and 200 villas and town hous-es, the realtor adds.

Cityscape Global also features a variety of inter-

national projects aimed at buyers looking for options in other — perhaps more mature — markets.

Emaar joins several other developers aiming to tap resident expatri-ate and regional appetites for international proper-ties. There are prominent representations from the UK, Turkey and Bahrain, Rhodes adds, while Pa-kistan makes a new ap-pearance at the show, in line with rising demand in the subcontinental nation, which is the world’s sixth largest. “Pakistani nation-als ranked second on our list of international visi-tors in 2015,” he says.

Real estate remains the top investment option for homebuyers from around the region, a survey by global market research company YouGov showed last week. More than half of 1,710 respondents (54 per cent) in the Real Es-tate Barometer study cit-ed property as their asset class of choice, ahead of stocks (13 per cent) and precious metals (11 per cent). Sixty-four per cent identified Dubai as the region’s prime city for property buyers, possibly because of the strength of the UAE economy, accord-ing to YouGov’s Head of Real Estate Research, Lara Al Barazi.

However, buyers look-ing at the UAE could do well to wait until the end of the year. The broad sen-timent is that although the medium-term outlook is strong, prices could con-tinue to soften across the emirates, with both Aste-co and Knight Frank ex-pecting the market to level out by Christmas.

“We expect to see fur-ther marginal declines in values over the next six months as the market looks likely to bottom out by year-end with, at most, a 5 per cent decline,” says John Stevens, Managing Director, Asteco.

“This could be offset by potential increased trans-action volume as lower prices unlock demand and stimulate renewed interest from single-unit buyers for soon-to-be-completed buildings.” n

Show of strength●● New launches planned for this week’s landmark Cityscape Global

By Keith J. FernandezEditor — GN Focus

5 NEW DEVELOPMENTS TO LOOK AT THIS WEEK

3 Floating homes Dutch developer New Living on Water will unveil sustainable

luxury homes based on an organic circular design (pictured). Covering about 16,000 sq ft, units are expected to sell for over $11 million (Dh40 million).

4 Bloom Heights Abu Dhabi developer Bloom Properties will display affordable

apartments at its Jumeirah Village Circle project.

5 Camp Nou A 500/1 scale model of the refurbished FC Barcelona stadium will be

on show in the Middle East for the first time. The €380-million (about Dh1.56 billion) project will be complete by 2021.

4 5PRIME PROPERTIESPRIME PROPERTIESGulf News | Monday, September 5, 2016 Monday, September 5, 2016 | Gulf News

Time to rethink the mortgage cap?●● GN Focus debates pros and cons of easing regulations to breathe new life into the UAE property market

The UAE proper-ty market has been struggling for almost

two years. House prices are set to fall by 10 per cent in 2016 because of lower oil prices and a strong dol-lar-pegged local curren-cy, Standard & Poor’s said in April.

In Dubai, as apartment and villa sales prices drop steadily, buying property would seem an attractive proposition considering affordability. But the op-posite is true. Average sales rates dropped 2 per cent quarter-on-quarter and 12 per cent year-on-year, according to the lat-est report by real estate consultancy CBRE.

There has been talk about revisiting the mort-gage cap introduced in 2013 to breathe new life into the property market. Analysts for the move ar-gue that today’s scenar-io is a far cry from 2013 when the market enjoyed a resurgence.

“The rate of growth is decelerating as the over-all economy corrects to a continued period of low-er oil prices,” says Dhiren Gupta, Managing Director, 4C Mortgage Consultancy. “Reconsidering the mort-gage cap would be an ideal catalyst to ensure custom-er confidence in the real estate market.”

Under the regulations introduced by the UAE Central Bank, expatri-

ates buying a property for under Dh5 million must produce a minimum de-posit of 25 per cent, rising to 35 per cent for prop-erties above Dh5 million. For second properties, the minimum deposit is 40 per cent. Emiratis need a 20 per cent deposit for homes under Dh5 million, rising

By David GeorgeEditor — Personal Finance

to 30 per cent for homes over Dh5 million, and 30 per cent for secondary properties. This would be fine if you have a fat de-posit lying around, but it can be a hurdle for people scrambling to put together the down payment.

“We have seen a slight rise in the amount of

mortgage transactions in the past six months, how-ever, the biggest issue is the deposit and the fees on top,” says Jo Phillips, Gen-eral Manager of the Mort-gages Division at Holborn Assets in Dubai.

According to a poll of 11,000 UAE residents car-ried out by property portal

Propertyfinder.ae in July, about 69 per cent of rent-ers said they did not buy because they couldn’t raise the necessary deposit or they were unable to qual-ify for the loan amount re-quired to borrow.

“Given the state of the market, I believe there is merit in reviewing the

mortgage caps in the in-terest of consumers, spe-cifically end users, who may find a 25-35 per cent down payment challeng-ing, in addition to the 4-6 per cent fees and ex-penses levied in buying a property,” says Shehzad Hameed, Standard Char-tered’s Head of Retail Banking in the UAE.

Experts agree the prop-erty market today is more mature than in 2013. In July, the IMF said the UAE is coping better with a real estate downturn than it did in the last slump seven years ago. Tighter self-reg-ulation, rises in transac-tion fees and mortgage caps have limited specu-lation and the amount of bad loans, it said.

Phillips says there are now a lot fewer investors in the market looking to flip. “The market that we see are end users who are looking at the long-term prospect of staying here for more than five years and don’t want to rent.”

Paring down the cap from 25 per cent to a rea-sonable 15 or even 10 per cent will help jump-start the sector that still holds a vital role in the growth of the economy, say experts. “A lot of clients are saying that if a 15 per cent depos-it was required, then the market would see move-ment,” says Phillips.

Not everyone agrees the cap should be reconsid-ered, at least not at this point in time. Gaurav Shivpuri, Head of Invest-

Gaurav ShivpuriHead of Investment Transactions

— Mena, JLL

Dhiren GuptaMD, 4C Mortgage

Consultancy

Shehzad HameedHead of Retail Banking — UAE,

Standard Chartered

Jo PhillipsGM, Mortgages Division, Holborn Assets, Dubai

ment Transactions — Mena, JLL, says it is not advisable now since interest rates are expected to rise (due to the US raising rates) and rents continuing to fall.

Rents in Dubai have been falling for the past two years, according to property firm Reidin. In Abu Dhabi, rents fell 2 per cent in the three months to the end of July.

“Increasing the loan-to-value will increase the EMI, which could create risk of rents not covering the mortgage payments,” says Shivpuri. “This will transfer the risk back to the lender, precisely what the central bank wants to avoid by putting in the caps.” The cap should be relooked when the rent-al market begins to grow again, he adds. n

Shu

tter

stoc

k

●● Lowering the cap will kick-

start the sector, say some experts

Dubai transfer fee: 4% including Dh540 administrative feeAbu Dhabi transfer fee: 1-2%Registration fees: Dh2,000 for property below Dh500,000Dh4,000 for property above Dh500,000Mortgage processing fee: Up to 1% of loanMortgage registration fee: 0.25% of loan plus Dh10 feeAgent fees: 2% of selling priceValuation fee: Dh2,500-Dh3,500Downpayment: 20-35% of property cost

Source: Souqalmal.com

Cost of owning property

End user buyers see value in Dubai property

UK national Chris-topher Battle, 46, managed to seal the deal on

a two-bedroom apartment in the Greens at the end of last year. The Dubai-based commercial man-ager who works for a con-struction firm paid Dh2.45 million for the luxury property, overlooking the golf course.

With up to Dh1.7 mil-lion funded by RAK Bank at an interest of 3.99 per cent fixed for one year over a 20-year term, Battle managed the remaining amount of Dh750,000 by selling his flat in London.

“We approached a mort-gage broker to help us get the best finance deal from a bank as we did not di-rectly look for a mort-gage lender,” says Battle. “I believe buying a home got a lot easier this way since the agent took care of mortgage and the legal side of buying, keeping us free to concentrate on the task at hand — narrowing down a property to buy.”

Pawan Dhawan, Head of Home Finance at Noor Bank, says the sector has registered a slight uptick in transactions over the past three to four months with the market witness-

ing an increase in resale and primary purchases across categories com-pared to last year.

Market sentimentAbout 28,251 trans-

actions, valued at Dh113 billion, were recorded in the first six months of this year, as per the Dubai Land Department (DLD) data for the first half of this year.

Property sales contrib-uted towards 43 per cent of the total, with more than 20,000 transactions valued at Dh48.7 billion.

Mortgages made up for 6,391 transactions worth Dh48.3 billion.

Jean-luc Desbois, Man-aging Director at mort-gage consultancy Home Matters, says his company and its key banking part-ners have seen a sizeable increase in mortgage en-quiries and transactions from May this year. He considers the fact an in-dication that prospective buyers are beginning to see value again in the real estate market.

“Middle range and af-fordable housing projects

are popular at this time,” says Desbois. “Develop-ers are putting more em-phasis on this segment and we see more choices as projects begin to be handed over.

“Attractive payment plans are also being of-fered to bring in buyers. With property prices get-ting cheaper as opposed to rents, tenants are look-ing at the option of buy-ing [a home to stay in].”

Sluggish marketWith Dubai’s real estate

market cooling off over the past two years, the home finance segment had also been affected.

“Over the past 12-18 months we have seen a contraction in the res-idential home finance market, which can be at-tributed to factors such as market cooling measures and sentiment that have had an impact on home finance transactions as well,” says Dhawan.

However, he notes a small increase in home finance transactions in recent months. “The value or the ticket size has slightly reduced. However, on the brighter side the units have shown an increase.”

He further adds that the UAE has typically been a market for prime property buyers. How-ever in recent months the industry has wit-nessed an increase in property and home fi-nance enquiries for af-fordable developments.

“Over the past 18-24 months, policymakers and real estate developers worked together to pro-vide housing solutions for the middle-income

market by launching new affordable developments, helping widen the pool for homebuyers and in-creasing home finance queries/transactions in this particular segment,” Dhawan says.

Akash Kanjwani, Di-rector of Sky View Real Estate Brokers, says the market slowdown had affected the home fi-nance sector only to a smaller extent, but the Central Bank limiting the loan-to-value (LTV) ratio for expats to 75 per cent of the property for the first purchase had a big-ger impact.

The way aheadWhether the real es-

tate market goes up or down, its effects would definitely spill over into the home finance sector, says Dhawan. “The out-look and upside depend on various factors such as economic growth, infra-structure spending, sta-bilised oil prices, liquidi-ty, absorption of the new real estate supply and market sentiment. I be-lieve we should see trac-tion by the end of 2016 and 2017.

Desbois foresees prop-erty finance rates to re-main relatively stable, and with increased com-petition among banks, the margins will squeeze further. “After more than two years of slow mort-gage sales and falling house prices, Home Mat-ters forecasts a bottom-ing-out phase of the cy-cle by the first quarter of 2017 and we expect banks to become more aggres-sive and innovative with mortgage products,” says Desbois. n

●● Mid-range and affordable housing units gain favour, with developers focusing on these segments and innovative payment plans on offerBy Hina NavinSpecial to GN Focus

Gulf News Archives●● Dubai International City offers affordable housing with more than 22,000 units

Increase in LTV ratio could boost mortgage demandAkash Kanjwani

(pictured), Director of Sky View Real Estate Brokers, believes any increase in loan-to-value ratio by the Central Bank substantially boosts demand for mortgages, especially for affordable properties, since not everybody can afford to pay up 25 per cent of the property value upfront. For instance, a property worth a million will require Dh250,000 cash in hand; add to this the transfer fee and brokers’ commission, which may come to about Dh300,000 or 30 per cent of the unit value.

“Banks have lowered interest rates from 4.5 or 5 per cent to 2.9 per cent to motivate people to go for bank funding,” says Kanjwani. “The demand is more for apartments in the mid-range segment priced below Dh2 million because the EMI comes to less than the rentals for these properties.”

— H.N.

...We expect banks to become more aggressive and innovative with mortgage

products.”Jean-luc DesboisManaging Director,

Home Matters

Akash KanjwaniDirector, Sky View

Real Estate Brokers

Dubai real estate is seeing several smaller brokerages exit from the market, while some

have merged or been purchased by larger firms after the market slowdown started in the third quarter of 2014.

“In Dubai, as the entry barrier for real estate brokerage licensing is not very high, several small agencies mushroom during the boom period,” says Sanjay Chimnani, Managing Director, Raine & Horne Dubai. “However, as the market slowdown starts, the brokerages that did not come with a long-term

perspective find it difficult to manage the fixed running costs…

they just tend to either shut down or opt for a merger. Only stronger companies will

survive the slowdown — a healthy trend as clients get better players to service them.”

He sees this as an opportunity for agents to have longer careers with

stronger agencies. “It’s not possible to precisely foresee how long the market takes

to come back, but if it remains soft another three to four months, we might see more consolidation.”

1. PROJECT USP

Brokerages and developers are actively participating in international roadshows and

using different marketing techniques to bring global buyers to Dubai. Mansi Saxena, Marketing Director at SPF Realty, says the sheer volume of numbers is driving this trend with close to 67 per cent of the investment in Dubai real estate coming from international investors in the first half of this year. She adds that with numbers like this, it makes business sense to participate internationally.

“Marketing to these buyers is a combination of digital strategy and on-ground presence. The

international roadshows allow the company to showcase the product in an experiential form, by way of scale models and

physical copies of marketing materials, and also allows face-to-face interactions

with buyers. “Finally, it also brings in a feedback

loop providing a better understanding of the reasons for investment, the

preferences and the cultural nuances of buyers. Incorporating all this once we get

back leads to higher conversions. As Dubai as a destination for property investment continues to grow, this trend is going to grow with it.”

Several developers are opting for hotels and hotel apartments over traditional residential units.

Adding attraction for investors, these developers promise guaranteed returns to buyers. Zhann Jochinke, CEO at Keller Williams Real Estate Dubai, says the developers offer rental returns in the range of 6-10 per cent for three to five years once operational. Guaranteed returns on any investment will always entice investors, he adds.

Jochinke does advise caution on anything with a guarantee: “In the past, we have seen some projects struggle with these types of incentives due

to actual revenues from the hotel not being able to support such yields in the early months of operation. Most projects

find their feet with occupancy and average daily rates increasing once the hotel

becomes more established.“My advice for investors is to think

about what happens when the guarantee period ends. Also, a hotel is different

from standard residential units — here you have an investment in the physical unit as

well as an ongoing interest in the income being generated from that unit. The latter can significantly change the value of your investment.”

Payment plans extended for a couple of years after handover are now a well-known

scheme that most developers use to draw customers. Helen Tatham, Managing Partner, Prime Places Real Estate, says such offers range from two to five years in proportions of 40-60 per cent interest-free options, making property investment more affordable and enticing to buyers.

“Smaller private developers needed to offer additional incentives to create buyer

demand, but more recognised organisations also adopted

it. Post-handover schemes are not only popular in the affordable housing market. We have also witnessed some higher-end communities come into this space.

“These payment plans naturally instil more confidence in the developer

as buyers are not subject to paying the majority of the price by completion when

there could be delays.”

DUBAI’S TOP 5 REALTY TRENDS

●● Changing market sentiment dictates that developers and real estate agents think outside the box to make a sell in the emirate.

Industry experts highlight the latest marketing techniquesBy Hina Navin

Special to GN Focus

While Dubai’s leading developers continue to add different features to their developments,

new entrants are offering extras such as vastu-compliant buildings and quality assurance-certified units to convince clients that theirs is a worthwhile purchase. Competition among off-plan developers is becoming fiercely competitive.

“Marasi Business Bay by Dubai Properties Group is offering residents floating restaurants and water homes, District One by Meydan-Sobha features a man-made lagoon and Dubai Creek is promising a complete regeneration of the whole area in what

was once considered the original Dubai centre,” says Jack Ward,

Managing Director of realtor Kirk Dixon. “With each developer that adds a unique feature

to their new launches, the bar to attract buyer attention is raised.

“With successive developments being released with different USPs, developers are almost forced to continue this trend,

as a standard property launch could easily be overlooked in such a competitive

field. Although this strengthens the market, the actual effects will only be realised when these developments are completed and handed over. ”

2. GLOBAL MARKETING

3. GUARANTEED ROI

4. POST-HANDOVER PAYMENTS

5. ACQUISITION AND CONSOLIDATION

INSIDE EDGE

PRIME PROPERTIESPRIME PROPERTIES6 7Monday, September 5, 2016 | Gulf News Gulf News | Monday, September 5, 2016

MAKING WAVES● With the Dubai Water Canal mega project looking set for completion by year end, we speak to the experts to find out the far-reaching impact of the development on the nation’s property market

It would appear to be the year of the big project once again in Dubai. The Opera

House has opened its doors, the IMG Worlds of Adventure Theme Park has blasted off and now the mammoth Dubai Water Canal is set to be unveiled at the end of the year.

Besides berths for yachts, this environmentally friendly lifestyle development will feature a five-kilometre boardwalk lined with food and beverage and retail outlets and comprises of three zones: The Water Network, Green Network and Public Realm.

Jumeirah rebornThe canal will be

served by modern water transport means, including water taxis and ferries.

“The Dubai Water Canal is one of a number of important flagship projects the emirate has in the pipeline and I believe this is going to be an anchor for other prime developments that will surround it,” says David Godchaux, CEO of real estate

provider Core Savills, a tie-up between the UK-based Savills and Dubai’s Core Real Estate.

“More importantly is the area in which it runs through — Jumeirah — which is progressively becoming freehold and this is a real game changer. At the moment, the main magnet in Jumeirah is City Walk, but as the canal reaches completion, anything between this and City Walk, as long as it is deemed to be freehold, will see a degree of land and price appreciation. This cements the area in the long term as a prime district in Dubai both for residential and retail.

“The canal district will complement the existing freehold offering in Jumeirah of a different European-style, urban experience by adding to the human scale, being accessible, and resident-friendly, combined with the street retail experience that is just coming to Dubai and relatively specific to City Walk. I anticipate it will progressively become one of the strong selling points, a differentiator or a brand, making Jumeirah stand out as a central prime district.”

With the completion

of three major flyovers that run across the canal at a height of eight metres on Shaikh Zayed Road, Al Wasl Road and Jumeirah Road, work on the project has entered the final stage as it allows contractors to finish excavating. According to an update from the Roads and Transport Authority, about 80 per cent of the canal excavation work has been done and the rest is set to be complete end of this month.

The Dh2-billion project is being carried

out over five phases and the excavation is part of phase three. Phases four and five are being carried out simultaneously.

Phase 3 includes drilling of the canal, constructing quay walls and three pedestrian bridges linking both sides of the canal to ease public mobility.

Lure of the waterWork is also under

way to build an artificial crescent-shaped island along Jumeirah Park, which will double the length of Jumeirah Park Beach, increase the park area and allow space for more recreational activities.

It takes a special kind of project to make real estate types come over all misty-eyed, but the new canal seems to doing just that. “It may be my love of Jerome K. Jerome’s classic book Three Men in a Boat, but I am for whatever reason always drawn to water, and the Dubai Canal will leave a long-lasting impression on the city,” says Jason Hayes, Head of New Developments at property firm Lux Habitat, which is active in the Al Habtoor City development beside

the canal. “This love of water is common to developers and occupiers alike with waterfront developments around the world proving to be incredibly popular, commanding high demand and in turn even higher prices.”

On the subject of increasing property values, Khalaf Ahmad Al Habtoor, Chairman of the Al Habtoor Group, has forecasted the sale price per square foot for The Residence Collection to rise this September as excitement builds for the whole area.

The Residence Collection consists of 1,460 apartments housed within two 74-storey towers and one 52-storey tower, including loft-style units, simplex penthouses, duplex penthouses and ultra-luxury VIP penthouses spread over four floors and boasting 360-degree views of the Dubai skyline.

“The residential project’s location and amenities are second to none,” says Khalaf Al Habtoor. “Al Habtoor City is the new centre of Dubai in an unparalleled location.”

David GodchauxCEO,

Core Savills

By Emma Procter Special to GN Focus

Jason HayesHead of New Developments,

Lux Habitat

Safa Park

Gulf News

Business Bay Bridge

Al Garhoud Bridge

Floating Bridge

Al Maktoum Bridge

AL KHAIL ROAD

OUD METHA

ROAD

Jumeirah Beach Park

Burj Khalifa

JUMEIRAH BEACH ROAD

DUBAI CREEK

AL WASL ROAD

SHAIKH ZAYED ROAD Dubai World Trade Centre

Deira

Wafi City

Festival City

Current end of extension

Starting point of extension

THE WATER NETWORK This is made up of three bodies of water: the canal itself, which runs 2.9 kilometres connecting Business Bay to the Arabian Gulf; the Arabian Gulf coastline with its pristine beach frontage; and the Crystal Lagoon in Safa Park, which brings the coastal experience inland with beach and water access. Expected launch: in full by 2020

THE GREEN NETWORK This connects Safa Park to the newly spruced-up Jumeirah Beach Park, offering a family-friendly leisure experience.Expected launch: in full by 2020

THE PUBLIC REALM The developable land located on the canal will soon include a network of food and beverage and retail outlets positioned along the boardwalk, enhancing the existing fabric of Jumeirah, one of Dubai’s most established residential communities.Expected launch: in full by 2020

WESTIN DUBAIAl Habtoor Group has just launched the Westin Dubai in Al Habtoor City. It boasts 1,004 rooms and six elegant dining venues offering a variety of cuisine.Launched September 2016

FINISHING POINT

Get it pre-approved This may sound ambitious or even needless, but you are better off getting a pre-approval for your mortgage before you start the process of purchasing a property. Initiating the mortgage pre-approval process at an early stage will save you a lot of time and, more importantly, it will help you define a budget for your new home. Visit websites of different banks, narrow down your choices, and pursue the ones that are most promising.

You could be one of two things — ready or reluctant. You may have lived here for long, but just not found enough gumption to take the plunge or you may be brand new and

simply don’t know how to move ahead. Whatever your position or situation, we have covered everything you need to know and do before you make the property purchase that is overdue.

By Iona StanleySpecial to GN Focus

Negotiation works As things stand, the real estate sector’s pricing dynamic is in favour of buyers and all sellers — whether they are individual or institutional — are expected to be more generous with prices, payment terms and other incentives to buoy demand.

If discounts or attractive offers are not being presented to you, you are entitled to ask for them. Else, simply ask around with others.

A buyer’s market Residential property markets in Abu Dhabi and Dubai are showing signs of decline as they continue to remain unenthusiastic in the wake of falling oil prices and extensive layoffs.

However, this presents great investment and growth opportunities too. If you have a long-term view, the best time to purchase property is around the bottom of the cycle, which is now.

Bargains on offer As demand weakens and property prices continue to fall, there is fierce competition and this will work dramatically well in your favour. Property developers are slashing deposits, offering deferred payment schemes and coming up with innovative plans that may even eliminate the need for you to seek financing.

The bonus factor is that many of these new plans require you to make much smaller upfront payments than the norm.

More choices Unlike the sector’s early period, dating back roughly a decade ago, when choices were limited to large villas or small apartments, there is a much wider selection of homes being sold across the country. Take your pick from the epitome of luxury on Dubai’s Palm Jumeirah or an apartment on one of Abu Dhabi’s islands.

You can now choose between modest town houses in gated communities and villas, high-rises in bustling neighbourhoods or low-rises in quieter suburbs.

It will be lucrativeIf you disregard the current atmosphere and adopt a mid-term view of the next four years or even longer, you will realise the UAE property market is a sound investment platform. Investors in Abu Dhabi are still being rewarded with an average yield of 5 per cent across the city despite a relative flat performance across the first half of 2016.

Reap the yield Chestertons’ Mena Q2 2016 property report says the yield for Abu Dhabi’s residential market topped out at 8.8 per cent in some areas during the first half of this year.

There is ample protection A slew of regulations — registration and transaction processes, increases in transaction fees, caps on mortgages and rules for developers — may have a role in the real estate market slowdown, but they minimise the risk of rapid corrections. And these laws protect you and your investment.

Read upAbu Dhabi: Law No. 3 of 2005, Law No. 19 of 2005, and Law No. 3 of 2015 Dubai: Law No. 27 of 2007, Law No. 13 of 2008, Law No. 9 of 2009, Executive Council Resolution No. 6 of 2010, and Law No. 7 of 2013 Ajman: Emiri Decrees No. 7 and No 8 of 2008, and Local Order No. 4 of 2008 Ras Al Khaimah: Decision No. 20 of 2005, Decision No. 12 of 2007, Emiri Decree No. 15 of 2006, and Emiri Decree No. 22 of 2008

Things are changing The UAE’s real estate market is being redefined in subtle and obvious ways and now accommodates relatively new facets such as ready-to-buy properties and mid-range and affordable housing with a redrawing of urban boundaries. As an illustration, a significant amount of new developments in Dubai are in secondary locations such as Mohammad Bin Rashid City and Dubai World Central and these will extend inland over the next few years .

Follow the signsAccording to the Dubai Land Department, 26,000 investors comprising 149 nationalities made investments worth Dh57 billion in the emirate in the first six months of 2016, making it one of the world’s best property destinations.

Pay attention Take heed of terms such as short and long delivery dates and clauses pertaining to cancellation or delays in your contract. Do not issue cheques to brokerage firms or agents, unless they have a valid and current power of attorney, authorised by the rightful owner. Read the fine print, study the paperwork and ask for changes if you think they are necessary. Before you sign, ask a lot of questions and make sure they get answered.

Register everything If you apply for a mortgage, it will need to be registered. Likewise, after you purchase a property, you have to register it to procure a title deed in your name. If you choose to let it out for a while before you move in yourself, the tenancy contract also has to be registered. The duration of these processes is subject to the readiness or completion of the project, necessary paperwork, and the physical presence of representatives from the bank, developer, or previous owner. It will also vary from emirate to emirate.

Get a mortgage If you are already pre-approved, this stage will be remarkably easy, but if you haven’t done it yet, there is no need to panic. Scout around for the best in mainstream and Sharia-complaint offerings and ensure it matches your personal requirements and capabilities in terms of the duration of the mortgage, monthly payments, fees and penalties.

Find an agent If you plan to buy a home in the secondary market, use the services of a registered real estate agent or brokerage firm. They will save you time and trouble in dealing with all the paperwork, ensure conformity and regularity, and answer all your questions. Saving the agent’s fee can often end up costing you more than the fee itself.

Check credentials Almost every individual and institution associated with the property purchase process is required to be licensed, be they sub-developers, owners association managers, appraisers or surveyors. Be sure you deal with people and companies that are registered and have sound credentials.

Investigate details If you plan to buy directly from a developer, research the company’s credentials and reputation — search online, talk to other owners, ask around for opinions and visit the developer’s other projects or communities.

Dealing with an individual seller may not be as easy. Among the many documents you will need to see are a valid title deed, ownership of ancillary items such as parking bays and proof of up-to-date payment of service fees.

Quick checksAbu Dhabi: Department of Municipal AffairsDubai: Dubai Land Department and Real Estate Regulatory AgencyAjman: Ajman Real Estate Regulatory AgencyRas Al Khaimah: Ras Al Khaimah Municipality and Real Estate Regulatory Authority

WHAT YOU MUST KNOW

WHAT YOU MUST DO

AL HABTOOR CITYSpanning an area of ten million square feet and consisting of three five-star hotels, three high-rise ultra-luxurious residential towers (Noura, Amna and Meera), a permanent water-based theatre production and an array of retail and leisure facilities, Al Habtoor City at Dubai Water Canal will be a massive draw for residents and tourists alike.Expected launch: two-thirds complete

Aiza Castillo Domingo/GN Focus

Infographic: Pranith Ratheesan/GN Focus

● The Dubai Canal as seen from the rooftop of the JW Marriott Marquis towers on Shaikh Zayed Road

REZIDOR HOTELSIt has been confirmed that hotel operator Rezidor is set to open two luxurious, five-star properties in close proximity to the canal in Business Bay — the Radisson Blu Hotel, Dubai Waterfront, and the Radisson Blu Hotel, Dubai Canal View.Expected launch: end of 2018

Length of canal linking Business Bay with the Arabian Gulf, cutting across Shaikh Zayed

Road, Safa Park, Al Wasl Road and

Jumeirah Road

Total cost of Dubai Canal project

Dh2b

3km

YOUR GUIDE TO

BUYING A HOME IN THE UAE

Shutterstock

8 PRIME PROPERTIESMonday, September 5, 2016 | Gulf News

S ince the UK’s historic decision to leave the EU was announced

in June, there’s been an upward trend in UAE-based buyers enquiring about mortgages in the country.

Following the largely unexpected Leave victory, deVere Mortgages reports that mortgage enquiries from overseas buyers have risen by more than 50 per cent as a result of the vote.

This major uptick in demand can be attributed to five key factors:

1 Property in the UK continues to be in high demand among

UAE residents. This is predominantly due to the enduring fundamental strengths of residential property investments in Britain. That said, a large number of potential buyers in the UAE had been delaying making enquiries about mortgages until the Brexit decision was announced. As such, since the outcome, many of these potential purchasers are now getting the ball rolling.

2 The UK housing market stopped to take a breath after the Brexit vote.

According to a survey by the Royal Institution of Chartered Surveyors, house price increases slowed considerably a few months before the referendum.

The survey revealed property prices had dropped outright in London, East Anglia, the North of England and the West

Midlands. Of course, this is an extremely attractive trend for buyers and UAE residents are keen to benefit.

3 Since the vote was published, the pound plummeted. Indeed,

sterling tumbled against the dirham further still after the Bank of England’s recent cut in interest rates to historic lows, the first time since 2009. As such, UAE residents buying property in the UK using dirhams will find a better deal than before.

The post-Brexit volatility is providing a timely boost to the top-end property sector for overseas investors. The market has experienced something of

a stutter in recent times as a result of stamp duty hikes.

However, since Brexit, the upturn in enquiries has seen savvy investors focusing on central London and some of the country’s wealthiest areas so as to benefit from the currency-pegged discounts after the pound’s nosedive.

As an example, the average price of a central London property fell by some Dh350,000 immediately after the referendum result was announced, which is positive news for international buyers now looking to dip into the UK property market.

London is seen as a secure, well-regulated market and a large number of potential

buyers from the Middle East are familiar with the capital and its robust track record for capital appreciation.

Furthermore, since 2007 potential property buyers are looking at a significant 31 per cent fall in prices since the last peak in the market.

4 In the same vein, buyers are finding it far easier to raise a deposit in

dirhams as a direct result of the post-Brexit pound. Potential UAE-based buyers are viewing the favourable currency situation as, in effect, being able to enjoy a discount on top of a discount. Apart from falling property prices, buying in dirhams benefits buyers with currency savings, as well as reduced prices.

Using one client based in Dubai as an example, where the dirham is pegged to the dollar, he made the most of a post-Brexit buying opportunity in Mayfair, central London. As well as a considerable reduction on the previous, pre-Brexit asking price — he saved the equivalent of around $96,000 (Dh353,000) — the client also made significant savings of up to 11 per cent by paying in local currency.

5 Finally, a large number of UK sellers are much more nervous after the

referendum. For this reason, they may be more willing than they would have been without Brexit to accept lower offers from potential buyers.

— The writer is Managing Director, deVere Mortgages

Why now’s good to buy in LondonBy Mike Coady Special to GN Focus

● Brexit sparks surge in UK mortgage enquiries from UAE-based buyers

● A woman waits for a bus below a real estate hoarding in London. UAE-based buyers hope to capitalise on low post-Brexit prices

Gulf News Archives

I am sitting in a Star-bucks with an archi-tect. He hands me an Oculus virtual reality

headset with a Samsung phone slipped into the goggle area. In his hands is an iPad.

I put the headset over my eyes and the café dis-appears. Suddenly I am in Miami, inside a sleek lux-ury apartment. I can see white condo towers and water views from the vast windows. I move out to the pool, a must for any luxu-ry condo in Miami, and a menu appears offering me the chance to change the time of day simply by looking at the choice. I se-lect sunset, the water in the pool moves with the breeze and I feel myself start to relax when the architect’s voice, seem-ingly coming from space, startles me. In fact, he is still sitting across from me at the café, and I am now clutching the edge of the table to give myself a sense of where my body is in space.

Somewhere in my wan-dering around the virtual Miami bachelor pad I run across a beautiful model sitting out on the deck in a tasteful black dress. “If you look at her face for a few seconds, she smiles at you,” the architect, who is following my adventures, and my gaze, on the iPad tells me. The idea of forc-ing her to smile unnerves me even though I know she is not real, and I walk away. A few minutes later I reluctantly take off the headset and rejoin reality.

The architect, Gonzalo Navarro, is part of a grow-ing number of people who specialise in creating VR experiences for wealthy

real estate shoppers. Na-varro’s company, ArX Solutions, creates virtual apart-ments for condo buildings that have not ac-tually been built yet.

“I am an architect who has never de-signed a building,” he tells me with a laugh. He did, on the other hand, create a VR ver-sion of an entire city once to help the builders petition for ap-proval to create it in the real world.

$2.6-billion marketVirtual reality, a tech-

nology that most associate with gaming, entertain-ment and dystopian warn-ings from sci-fi writers such as Neal Stephenson, has moved into the real estate world in a big way. Goldman Sachs estimates that by 2025, VR software for real estate applica-tions will be a $2.6-billion

(Dh9.5 billion) market. Companies such as Trans-ported and You Visit cre-ate websites for viewing homes in VR.

Real estate agencies from Sotheby’s to Corcor-an to Douglas Elliman have used the technology to entice clients. Navar-ro says existing sites like Zillow will get on the VR bandwagon as the tech

becomes more ubiqui-tous and hardware gets

cheaper, allowing it to eventually

trickle down to the non-luxu-

ry real estate market.

As VR apps and h e a d -sets are b e c o m -ing more q u o t i d i -an, enter-

ing more h o m e s ,

usually as an entertainment

tool, competition in VR real estate

has become fierce, says Navarro. “All the big real estate

studios are working on this technology,” he says, each with their own program-mers busy trying to create a more realistic view of the future. Someday soon, people could spend hours being transported into ev-erything from Park Ave-nue penthouses to sprawl-ing McMansions. Once the technology becomes as everyday as iPhones have, none of us may ever be productive again.

Even with the current limitations in the physical hardware, which limits the sharpness of the im-age, virtual reality makes a lot of sense when selling a new development, says Navarro. Instead of spend-ing the money to build a model apartment and fur-nish it, real estate compa-nies can have virtual ver-sions created that can go where the agent does.

Cheaper optionWhile virtual mockups

are not cheap, they cost a fraction of the $1 million or so that a furnished and decorated model luxury apartment would cost, ex-plains Navarro. At a time when wealthy foreign buyers are flooding the luxury markets in large cities like New York and London in an effort to in-vest their money away from their volatile home countries, a VR set takes away the burden of bring-ing a buyer halfway across the world to see a model apartment. The novelty of walking through a vir-tual reality home adds to the allure.

“It’s like Call of Duty, only without the killing part,” Navarro says. The entire process of creating an oversized condo, with tastefully bland furniture in neutral tones, out of thin air takes only about a month and a half. The paintings on the walls and fancy light fixtures are all based on real items. The smiling model in the black dress is the only other el-ement introduced into the virtual world that exists outside it. “She’s real,” Navarro says with a laugh.

— Guardian News and Media

Virtual reality reimagines real

estate sales in the US ● A growing number of companies are specialising in VR experiences for wealthy property shoppers

By Olga Oksman

Shutterstock

China curbs boom towns

China’s biggest cities aren’t done trying to tame

their soaring proper-ty markets. Shanghai, where prices of new homes jumped 27 per cent in July, is preparing to discuss a fresh round of curbs including po-tential restrictions on mortgages and loans to developers, according to people familiar with the matter. Beijing and Tianjin are also contem-plating new measures to rein in prices .

China’s top leaders, after a Politburo meet-ing led by President Xi Jinping last month, pledged to curb asset bubbles amid renewed focus on financial sta-bility. Stabilising the economy with a mix of fiscal support and easy monetary stimulus, China’s leaders are now pivoting towards reform to stoke growth.

Cuts to the bench-mark interest rate since November 2014 and other easing measures have helped spur a home buying frenzy in many of China’s biggest cities. In Beijing, prices of new homes jumped 21 per cent in the past year and in the adjacent northern port city of Tianjin, they rose 16 per cent.

In the southern busi-ness hub of Shenzhen, red-hot demand pro-pelled prices up by al-most 60 per cent over the past year.

Smaller cities have also moved to cool housing prices. Nanjing, Jiangsu’s provincial capital, and Suzhou, a regional manufacturing base, earlier this month raised down payment requirements for some buyers of second res-idences, adding to re-strictions introduced in Xiamen, a southern port city in Fujian province, and Hefei, the provincial capital of Anhui.

Shanghai’s moveIn Shanghai, pro-

posals under consider-ation include increas-ing down payments for some first-home buyers to 50 percent from 30 percent, and to 70 per-cent for people borrow-ing to buy their second

property, according to the people, who asked not to be identified be-cause the plans haven’t been publicly disclosed. The Shanghai branch of the China Banking Regulatory Commis-sion (CBRC) earlier this month held meetings with banks to discuss the possible changes, said two of the people.

Shanghai’s munici-pal government and the city’s CBRC office didn’t immediately respond to enquiries seeking com-ment on the plans.

Further curbs in Shanghai would come on top of measures taken earlier this year to slow price increas-es. In March, the city’s government tightened approval criteria for non-resident home-buyers, raised down payment requirements for some second homes and banned unregulated lending. That round of tightening also limited home buying eligibility in Shanghai to people who had paid income taxes and social insur-ance for at least five straight years, up from two years.

Price ceilingShanghai authorities

are also taking aim at runaway land prices. This year, land plots in the city have sold at an average floor price of 21,866 yuan (Dh12,023) a square metre, more than double the 9,842 yuan a square me-tre they fetched a year earlier, according to Yan Yuejin, a Shang-hai-based analyst at China Real Estate Infor-mation Corp., a proper-ty data and consulting firm. Last month, the city sold a site north of Jing’an district for 100,315 yuan per square metre to Ronshine China Holdings Ltd., according to official land auction information posted on-line. That was a national record for a residential plot, according to Chi-na Real Estate Informa-tion. That spurred the cancellation of three land sales in the Pudong and Putuo districts in the past week.

— Bloomberg

By Steven Yang

● Measures including limits on mortgages and loans to developers

are helping control soaring prices

Shutterstock● Beijing is also mulling steps to rein in prices

PRIME PROPERTIES 9Gulf News | Monday, September 5, 2016

A D V E R T I S E R ’ S C O N T E N T

EMIRATES NBD

●● Windsor Crescent Townhouses, Dubai Motor City

●● An artist’s illustration of the upcoming hotel at Dubai Motor City

Projects that cater to Expo 2020 needs

Emirates NBD Properties, a fully owned subsidiary of Emirates NBD Group, is

currently exploring various de-velopment options to match the expected demand in Dubai’s real estate sector on account of the forthcoming Expo 2020.

One of the major propos-als under active consideration is a joint venture to develop a mixed-use twin towers prop-erty on commercial land mea-suring 138,465 square feet with an expected built-up area of 1,952,231 square feet, located in the prestigious Zabeel area. The development provides easy ac-cess to various landmarks and areas including Dubai Inter-national Financial Centre, Burj Khalifa, Dubai Mall and Down-town Dubai.

Another key venture un-der discussion with a strategic business partner is the devel-opment of the Motor City Hotel, which has an estimated usable area of 220,644 square feet and an estimated capacity of 243 guest rooms. The project is strategically located in the fully developed Motor City commu-nity, providing easy access to well known residential societ-ies such as Arabian Ranches, Sports City and Studio City. The proposed hotel will cater to vis-

itors arriving at the Al Maktoum International Airport located in Jebel Ali.

The current portfolio of Emirates NBD Properties in-cludes fully developed and ready-to-occupy projects in Motor City such as Control Tower, Terrace Apartments and Windsor Crescent Town Houses.

Control Tower, located in the Business Park district of Motor City, offers state-of-the-art fa-cilities built specially for active lifestyles, perfect for a grow-ing small business or a creative workspace.

Properties on offer include retail units starting from 530 square feet and going up to 2,889 square feet, with of-fice spaces that vary from

3,000-square foot units to en-tire floors.

The terrace apartments at Green Community Motor City offer simplex and duplex op-tions with lake view access and proximity to community pools and parks. Apartment sizes vary between 3,303 square feet and 5,262 square feet.

Windsor Crescent town houses are four-bedroom units designed complete with back-yards and gardens, with easy access to the soccer field, com-munity pools and parks. Prop-erty sizes here vary from 5,910-5,982 square feet.

For more information on Emirates NBD Properties call 800 272 728 or visit Emir-atesnbd.com/properties

Investing in Indian land, though challenging in many ways, is worth exploring given its high appreciation potential. For non-resident Indians (NRIs) in par-ticular, it serves the dual purpose of being not only

an exponential wealth multiplier but also a tie-back to their roots.

“Investing in land in India is challenging unless one is from a sound financial background as loans are not avail-able on purchase of land,” says Rajesh Dasija of RGD Char-tered Accountants. “Appreciation is generally quicker in land.” He adds that resale value of plots with independent houses is usually considerably higher than flats, as the per-son buying the house also becomes the owner of the plot of land.

The option of purchase of commercial or residential immovable property is freely available to NRIs. Though they are restricted from purchasing agricultural land, they may be owners by inheritance. They are also al-lowed to continue with ownership for land purchased before gaining NRI status.

Moreover, not all Indian states allow those not resi-dent or from a family of that state to buy any property in that state at all, whether agricultural or non-agricul-

tural. More prominently, these are Himachal Pradesh, Jammu and Kashmir and Arunachal Pradesh. In some other states specific prime areas such as hill stations and beaches may be protected, while others may allow non-state domiciliary holders to purchase only for specific purposes.

Agricultural land is even more tightly controlled than commercial or residential. Some states require even resi-dent Indians to have bona fide proof of current ownership of agricultural land or farming as the family occupation to qualify for fresh purchases. In some cases, the exist-ing farm landholding has to necessarily be in the same state as the new purchase proposed. Some other states are more lax, in that agricultural land ownership in any part of India would be considered valid.

In short, when planning to purchase land in India one has to account for the variance in rules governing land acquisition from state to state. Being an NRI only adds a further layer of complexity to the rules.

To fund the purchase, NRIs can issue cheques from non-resident external/non-resident ordinary rupee ac-counts in India or use deposits held in foreign currency non-resident accounts. Overseas currency brought into India through legitimate channels can also be used.

However, while land acquisition for NRIs is only pro-hibited for agricultural property, sale of any real estate,

RICH HARVEST IF YOU UNDERSTAND THE RISKS

●● Buying land in India, both agricultural and commercial, comes with its own set of rules and restrictions when NRIs are involved

“Information asymmetry is the biggest concern

an NRI faces while buying a property

in India.”Gulam Zia

Executive Director – Advisory, Retail and Hospitality,

Knight Frank, India

By M. SenSpecial to GN Focus

Shu

tter

stoc

k

●● Agricultural land is more tightly

controlled than commercial or

residential

A summary of reasons NRIs are keen to invest in land in India and the challenges they face.

WHY INVEST?❶ Retirement home back-up plan.❷ High appreciation, especially for agricultural land.❸ Build a house for the family back home.❹ Build industrial, plantation or other commercial

infrastructure for additional income.

KEY OBSTACLES❶ Agricultural land may only be acquired with

ownership held by someone they can be sure of inheriting from, though there would be financial and legal challenges faced on taking this route.

❷ Identifying the right partners to verify and close land acquisition transactions to ensure clear titles and that no retrospective penalties exist for any past owner not being in compliance.

❸ Availing of land development infrastructure and permissions for areas that don’t yet have water or electricity supply.

— M.S.

especially when repatriating funds, comes with some Foreign Exchange Management Act restrictions. Re-patriation of funds is the transaction by which when a sale of property takes place and the amount received as proceeds is sent abroad to the country of the NRI’s res-idence. Property sales attract capital gains tax — either short term (if sold within three years of purchase) or long term (if sold later than that). Rental income from proper-ties held by NRIs is also taxable.

In the case of residential property, while one can own any number of properties, the repatriation of sale pro-ceeds is restricted to no more than two. General permis-sion is available to NRIs to also repatriate proceeds of the immovable property inherited from a person resident in India subject to the conditions that the amount should not exceed $1 million (Dh3.7 million) per financial year.

“As per the rules applicable to resident Indians, NRIs too have the choice of showing 30 per cent of such deemed rental income as maintenance cost and get tax benefit against the same,” Ramalingam K., Director and Chief Financial Planner, Holisticinvestment.in, states in a post on Moneycontrol.com. “No tax is payable on deemed in-come in the country of the NRI’s residence. However, do declare this as it could otherwise cause problems during repatriation of funds from India.”

It is essential to get oneself the right property search, legal and financial advisors to avoid rude shocks midway through the process or worse still when trying to mone-tise the investment. “Information asymmetry is the big-gest concern that any buyer, more so an NRI, faces while buying a property in India,” says Gulam Zia, Executive Di-rector — Advisory, Retail and Hospitality at Knight Frank, India. “Since NRIs don’t have the benefit of physical pres-ence for most of the purchase process, they may face a distinct disadvantage compared to a resident buyer.”

The buyer should evaluate the title deeds and whether property taxes are paid. Some builders sell land with con-structed houses, but on agricultural land or land other-wise restricted from sales such as adivasi or lands owned on terms that do not allow sales without additional taxes, fees or penalties paid before they can be bought.

Given the complexity of laws and financial structures governing land acquisition in India, you would certainly be best advised to tread softly on those dreams. n

REASONS AND CHALLENGES

10 A D V E R T I S E R S ’ C O N T E N T

Monday, September 5, 2016 | Gulf News

Since its inception in 2008, Masdar City has sought to re-

define sustainable urban living through a com-mercially viable ecosys-tem where residents, re-searchers, students and businesses thrive in the world’s most sustainable low-carbon city.

With the overall glob-al population set to reach nine billion by 2030, Mas-dar City is demonstrat-ing today how innovative solutions for reducing energy, water and waste can mitigate the environ-mental impact of urban communities and sustain-ably accommodate greater population density.

From the outset, Mas-dar City was based on a visionary greenprint that integrated research cen-tres, educational facili-ties, for-profit businesses, a free zone and a vibrant residential community. This vision has delivered a high-quality lifestyle, en-vironmental sustainabili-ty and economic viability. Located next to Abu Dha-bi International Airport, Masdar is only 17km from downtown Abu Dhabi and little more than a 40-min-ute drive to Dubai.

Collectively, Masdar City businesses, research-ers and residents are gen-erating new knowledge

to accelerate the pace of innovation for sustainable urban living in the region and around the world by commercialising new technologies and show-casing best practice.

More than 4,000 peo-ple now work at Masdar City, which is also home to more than 400 compa-nies from six continents, including multination-

als such as GE, Lockheed Martin, Mitsubishi, Sie-mens and SK Energy. At the heart of the city is the Masdar Institute of Sci-ence and Technology, the world’s first research-ori-ented university special-ising in alternative ener-gy, sustainability and the environment. Since 2011, the institute has graduated nearly 450 students, hon-

oured its first PhD in 2015, and hosted faculty from more than 60 countries.

Today, this growing de-velopment also represents one of the world’s largest clusters of high-perfor-mance buildings, includ-ing the award-winning LEED Platinum Siemens headquarters and the Estidama 4 Pearl-rat-ed building, home to the

headquarters of the Inter-national Renewable Ener-gy Agency (Irena). These buildings and others in Masdar create a real-time laboratory to study how cities use, conserve and share resources.

On organised visits alone, Masdar City attracts more than 2,300 visitors each month on average. They seek the living lab-

oratory as a destination to experience a new defini-tion of sustainable urban living, powered by on-site solar panels and renew-able energy from the UAE national grid, or to take a ride on the driverless, elec-tric Personal Rapid Transit System (PRT) that carries over 30,000 passengers a month. The city’s reputa-tion as a test bed for the latest clean technologies also attracts a broad cross section of innovators to its investment and business free zone, from SMEs to global multinationals.

Today, renewable en-ergy is no longer just an aspiration; Masdar City demonstrates that it is a commercially viable tech-nology of choice.

Masdar City stands as a thriving demonstration of that reality, applying

real-world solutions to a sustainable urban devel-opment that can address the long-term challeng-es of population growth. Served by a wide range of cafés, restaurants and other leisure services, the city will ultimately house up to 40,000 resi-dents and accommodate as many as 50,000 pro-fessionals and students. Future plans call for the growth of its tenant base by nearly four-fold by 2020, and the expansion of the net leasable area available within the free zone by around a third each year over the next four years.

As a symbol of ambition, creativity and imaginative vision, Masdar City is re-defining and reinventing sustainable urban living that will shape our future.

Sustainable urban living a reality in the capital

Helping home ownership dreams come true

STANDARD CHARTERED

MASDAR CITY

Dubai’s real estate market ranks among the most popular

international markets for property investors. This can be attributed to many factors, mainly the strong political stability of the country and the economic diversification plans and fiscal measures followed by the UAE authorities.

The regulatory measures introduced by the coun-try’s authorities for the real estate and mortgage sectors played a pivotal role bringing in stability to the property market and overall economy.

Investors are attracted by the high rental yields and capital gain opportu-nities while other aspects act as a magnet for end user homebuyers. End users seek to move away from rental expenses to-wards building their own equity and are more en-couraged to do so in the context of the permanent freehold ownership avail-able in the UAE.

A range of banking solutions for property fi-nancing that suit different lifestyles is available in the market. Banks and finan-cial institutions extend a host of features to cater to the financial needs of their clients. The lending rates have also reduced consid-erably as banks perceive the mortgage business to be lower risk than other retail and business lend-

ing products. Factors such as mortgage regulations, successful and well de-fined foreclosure process, and mandatory title reg-istration with Dubai Land Department have con-tributed to lowering risks associated with the mort-gage business. According-ly, banks have passed on the benefits of lower risk to clients through lower bank margins.

Standard Chartered Bank has passed on the benefits of lower margins to its clients, demonstrat-ing its commitment to long-term relationships.

The bank designs its mortgage solutions to help clients achieve their dreams of owning a prop-erty. It believes that offer-ing a home loan is critical for building a long-term relationship with its cli-ents and transparency and service excellence are

fundamentals for its suc-cess. Keeping the bank’s clients at the heart of all its operations, Standard Chartered Bank provides them with transparent pricing clearly defined and documented, quick turnaround time and a strong post sales service.

The bank’s clients can take advantage of either a conventional loan or Sha-ria-compliant financing for purchasing a proper-ty or an equity release in case of unencumbered properties. So whether clients want to transfer their existing home loan to the bank or purchase a new property, the bank-ing institution’s experi-enced mortgage team will provide the client with best-in-class service and be with them every step of the way.

In addition, the bank offers home loans for up

to Dh18 million and loan tenures of up to 25 years. Its proposition is flexi-ble in terms of insurance requirements, whereby life insurance is optional based on the client’s need.

Continuing to focus on being socially responsible, Standard Chartered Bank takes time to educate its clients on mortgages. Since it is a long-term fi-nancial commitment, the bank advises its clients to consider not only their current cash flows but also the stability of their job, future increase in expens-es, possible increase in in-terest rates and changes in property values.

Standard Chartered Bank remains strong-ly committed to the UAE market and continues to be a key player in the UAE mortgage space, offering clients world-class bank-ing products.

Home in One eases mortage burden

Buyers looking to ac-quire a property in the UAE will be able

to take advantage of a newly launched innova-tive and flexible home loan facility, Rakbank Home in One, a first of its kind in real estate financing in the GCC that not only offers customers competitive interest rates starting at 3.49 per cent per year but also helps them pay off their mortgage loan much sooner.

Home in One is a com-bo product that brings together a customer’s cur-rent account and mort-gage loan, making things easier to manage.

Customers who sign up for Home in One with Rakbank have the flex-ibility to combine their primary current account with the mortgage facility into one convenient trans-

RAKBANK

action account. Salaried and self-employed UAE residents can apply for Home in One to purchase or refinance residential property. The Home in One offer has quite a num-ber of benefits, which are outlined below.

Pay off loans sooner: the higher the account balance, the lesser in-terest customers pay on their mortgage facility each month. Every depos-it that a customer makes lowers their interest pay-ments and reduces their loan tenor. If the customer maintains any addition-al funds in their Home in One account, there are effectively no fixed repayments.

One account for all dai-ly banking needs: Home in One combines a cus-tomer’s current account, interest savings and mort-

gage facility to provide a single, easy-to-manage solution. The Home in One account gives cus-tomers the flexibility to maintain and transfer their salary and savings, pay bills, and get seam-less access to mobile and internet banking applica-tions.

“The launch of Home in One provides our cus-tomers a mortgage facili-ty which is flexible, pays interest and reduces loan tenor,” says Peter En-gland, CEO of Rakbank.

“We are always look-ing to bring our valued customers added choice and convenience to their banking relationship.”

Easy access to funds: Customers have the flex-ibility to withdraw the available balance at their convenience.

Rakbank was among the first banks to pro-vide mortgage finance for freehold properties back in 2004. Since then, the bank has established it-self as the leading mort-gage provider in the UAE by simplifying the usually complicated process of acquiring a home.

For further details on Home in One, visit Rak-bank.ae and use the Home in One calculator to assess your potential interest savings com-pared to a traditional mortgage facility.

●● Peter England, CEO, Rakbank