Sellers raise the price of their properties-Dubai Real Estate

Sellers raise the price of their properties

Owners are still holding on to their property anticipation of market recovery

In recent months, we have seen many indicators reflecting a better level of confidence in the UAE real estate market. Since August 2011, more transactions have been recorded and banks are offering better mortgage rates to potential buyers.

What effect does all this positive news have? Only a small number of individual freehold property owners have started to raise the asking sales price of their property. Certain master developments witness higher demands than others because they offer premium units which enjoy better views and higher quality finishes.

In the boom years,owners of these properties would have been able to sell their units for higher prices.But since the financial crisis, they have been holding on to their properties in anticipation of market recovery. This is now beginning to happen. The rates of transaction are improving and sellers can now expect to achieve a higher price than would have been attainable in Q2 2012. Many sellers hold off putting their properties on the market for a few more months in the hope that selling prices will rise further.

This creates a gap on the market as buyers start to come forward with ‘’reasonable’’ offers which fail to meet seller expectations most of the time. It is suggested that people looking to sell their property seek advice from a professional property management agency to make sure they are receiving the right kind of offers.

Sales prices are reflective of the available market inventory,and now,each established location or development has positioned itself at a certain level. However, sellers need to be mindful of the fact that buyers are obviously looking to pay a price that allows for capital appreciation in the mid to long-term.

Improved market conditions should translate into an increase in transactions,which will boost sale prices. Sellers must carry out due diligence as there are multiple factors in play, and the absence of due diligence can potentially force a decline in transaction levels.

Dubai Real Estate Tips.

Property sellers are advised to continue carrying out due diligence

Owners must seek professional advice to ensure they sell at the right price

Buyers are also looking to pay price that allows for capital appreciation

To buy or not to buy that is the question in Dubai

With many industry experts claiming that Dubai property is on the up once again,we look at the truth about taking a leap of faith and becoming a property owner.

First, one must consider the availability of funds and how easy it is now to come by a mortgage lenders who continue to fight for market share.

Aside from offering initial mortgage rates for as low as 3.5 percent and LTV levels around 80 percent, banks are slashing arrangements fees and timescales to process approvals. Let' say you get pre-approval, what do you now? You have 20 percent equity and you're currently paying a Dh 120,000 rent for a two bedroom apartment in Downtown Dubai.

Remember that the initial interest rate that the banks advertise to attract customers is generally in place for only a year, after the initial 12 months, the mortgage will revert to a standard variable rate to a standard variable rate of around 6 percent.

The average selling price of a 1,400 sq.ft two bedroom apartment in the Downtown area stands at around Dh1.6million. 
You will need to pay 2 percent of the purchase price to the seller's agent and an additional 2 percent of the land Department for the title transfer fees, which, in this example, amounts to Dh 64,000. 
You will then need to commit a 20 percent deposit to the bank, which will leave you with a Dh1.28 million mortgage. Ignoring the first year's payment at 3.5 percent to 4 percent, you will revert to a 6 percent variable rate, equaling Dh76,800 (interest) per year. There are service charges which, in the Downtown area, will average to about Dh 23/sq.ft., amounting to Dh32,200 per year. You now have guaranteed payment of Dh109,000 per year and that's before you start making any repayments on the loan itself.

On the face of it, your savings are dwindling and your gross to net income is just breaking even. But this food for thought, especially if you think of the potential capital gains one could benefit from.

Manage your property investment wisely

Excellent returns can be attained through efficient property management

Commercial properties whether single or multiple units, require proper administration.
Managing your property involves a lot -from finding the right kind of tenant and getting legal paperwork done, to arranging for maintenance entails special attention .
A profitable stream of business can be attained by Investing in a resourceful property manager.

Hasty and impulsive decision are bad for any business . Do you travel a a lot and have little time to concentrate on your property? Do you own multiple units and need assistance?if so, determine the need to hire a property manager or a company to do the job.

The UAE has several reputable real estate management companies that can oversee everything- from screening tenants to retaining them , maintenance,managing rental a and so forth. Landlords can easily search for UAE property management companies through listing on print and online. These companies also offer the convenience of online registration or quick processing.

If you have a manageable number of units you may employ a property manager. Check if your potential employee has suitable qualification or relevant certificates. He /she should have appropriate knowledge of managing the business including maintaining legal paperwork, bringing in new tenants as well overseeing and recruiting maintenance companies etc.

If you are managing property on your own , there are several things you need to consider.
Administration of your property becomes easier if you invest in a reputable building , which offers 24 hour surveillance. Keep a close eye on maintenance and cleanliness which adds value to your  investment .Keep an open line of communication with your tenant to be able to address issues and concerns immediately.


Handy hints

Do a background check before hiring a property manager
Decide if you need to hire a property manager or a company
Property management companies offer end to end services.

Dubai Real Estate The delimma - should you rent or should you buy?

Dubai Real Estate The delimma - should you  rent or should you buy?

Access your current financial standing to see if renting or buying is the move you must make.
Whether one rents or buys property in dubai, the debate continues as to which one is more favorable. From a pure investment or financial perspective and looking at the long-term gains,given the rate at which rents are rising, the answer may well"to buy".

Mortgage are now easier to come since the downturn and the rates have steadily reduced down to an attractive3.99 percent(provided the property has a title deed). Banks will now lend on any finished property with some even offering mortgages again for off-plan projects.

Prices have reached the bottom and, in pretty much all established areas, have now seen rises. The time to buy is definitely now as there will be a sustained period of positive property price growth.

Not everyone has funds for a 25 percent deposit or a job that pays a substantial basic salary. Circumstances may dictate that renting is the better option for many,especially for those on a shorter contract of less than 3 years. Even so, "trying out" different areas or properties can be a good thing, as this will give you the opportunity of seeing whether the development/area suits you, both in terms of social and recreational factors, or proximity to work.

Over the past year, residents that had previously rented decided to take the plunge and pay their own mortgage rather than pay their landlords rent. This has led to house price inflation in sale prices. But rental prices have also increased due to the large number of expats arriving, swelling the Dubai population to 2 million. Ultimately, whether you decide to rent or buy, it is clear that you will be investing in a world-class city that we all now call"home".


Dubai Real Estate

How to safeguard your tenancy contract

 Tenants in the emirate should ensure that landlords have paid all service charges and that lease agreements are clear to avoid disputes later.

"Service charges are one of the biggest, most critical and one of the most controversial issues in Dubai," said Shahram Safai, the head of real estate at Afridi and Angell legal consultants.

"In a tenancy agreement, the landlord's obligations should be spelt out so it is clear what he is responsible for. You should not assume this, it should be stated in the contract clearly. It is vital to lay out the obligations of the tenant and the landlord. The contract should be all-inclusive. There should be no hidden fees: the language should reflect that. The greater the clarity, the less the surprises down the road."

The tenant should ask for a certificate from the developer to confirm that the landlord has paid up all service fees.

"The agreement should say this is the rent and includes use of these facilities," Mr Safai said. "It should be transparent and describe exactly for what the rent is being paid. I would hate for the tenant to walk into a dispute between the developer and landlord about facilities."

Such disputes often have soured tenancy relations in Dubai, where some developers are restricting the use of common facilities and parking, citing unpaid dues.

The tenancy agreement must also be registered online with the Dubai Land Department.

source thenational.ae