News Brief 39
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ASSET MANAGEMENT SALES LEASING VALUATION & ADVISORY SALES MANAGEMENT OWNER ASSOCIATION NEWS BRIEF 39 SUNDAY, 30 SEPTEMBER 2018 RESEARCH DEPARTMENT ABU DHABI | AL AIN | DUBAI SHARJAH | JORDAN | KSA IN THE MIDDLE EAST FOR OVER 30 YEARS © Asteco Property Management, 2018 asteco.com ASSET MANAGEMENT SALES LEASING VALUATION & ADVISORY SALES MANAGEMENT OWNER ASSOCIATION REAL ESTATE NEWS UAE / GCC BUYING IN THE UAE WILL ALWAYS BEAT RENTING DUE TO LONG-TERM CAPITAL GAIN ALABBAR CALLS FOR 51% LOCAL OWNERSHIP OF UAE E-COMMERCE-RELATED BUSINESSES TOMORROW 2021 IS A BOON FOR INTERNATIONAL INVESTOR CONFIDENCE IN THE UAE WYNDHAM HOTELS PLANS 30% PORTFOLIO GROWTH IN THE MIDDLE EAST 58% OF UAE RESIDENTS PLAN TO INVEST IN PROPERTY IN THE NEXT 12 MONTHS MINISTRY EXTENDS TENDER DEADLINE FOR KUWAIT INTERNATIONAL AIRPORT SAUDI ARABIA LAUNCHES NEW TOURIST VISA FOR INAUGURAL FORMULA E RACE TYPES OF MORTGAGE LOANS AVAILABLE IN THE UAE FOREIGN INVESTMENTS IN BAHRAIN ON THE RISE 10 FACTS TO KEEP IN MIND WHILE BUYING YOUR PROPERTY GCC DOLLAR PEG TO STAY DESPITE TRADE WAR RISK ASTECO SAYS RENT-TO-OWN SCHEMES UNDERPIN 'CAUTIOUS OPTIMISM' ENOC OPENS FIVE NEW SOLAR POWERED STATIONS MAKKAH TO MEDINA IN 90 MINUTES: SAUDI KING LAUNCHES NEW HARAMAIN RAIL SERVICE WHY DUBAI DEVELOPERS NEED TO PICK UP THEIR PACE ON PROJECTS CALLS FOR LOWER LOAN-TO-VALUE RATIOS TO SPUR REALTY IN THE UAE QATAR MOST AT RISK GLOBALLY FROM RATINGS DOWNGRADE, SAYS S&P SAUDI ARABIA COURTS UBER-LUX TRAVELLERS WITH RED SEA PROJECT MANAMA HOTELS REPORT BEST AUGUST OCCUPANCY FOR A DECADE US OPERATOR REVEALS PLAN TO OPEN MORE SAUDI HOTELS ABU DHABI | AL AIN | DUBAI SHARJAH | JORDAN | KSA IN THE MIDDLE EAST FOR OVER 30 YEARS © Asteco Property Management | 2018 | asteco.com Page 2 ASSET MANAGEMENT SALES LEASING VALUATION & ADVISORY SALES MANAGEMENT OWNER ASSOCIATION REAL ESTATE NEWS DUBAI UNION PROPERTIES 'NOT CONSIDERING ANY MERGER' 'WE WANT TO BE NUMBER ONE' - AZIZI DEVELOPMENTS' MIRWAIS AZIZI ON THE STORY BEHIND DUBAI'S FASTEST-GROWING DEVELOPER UNITS AT WASL GATE GO ON SALE OCTOBER 8 TOWN HOUSE VS VILLA DISTRICT 13 TO BE DUBAI’S SPARKLE AND SHINE DESTINATION THE LURE OF AL WASL NAKHEEL PLANS SUKUK SALE AND MALL FINANCING TOP 10 DUBAI COMMUNITIES WHICH OFFER HIGHEST RENTAL YIELD TOURISTS SPEND MORE IN DUBAI THAN ANY OTHER CITY IN THE WORLD NAKHEEL SIGNS DEAL TO BUILD RESIDENTIAL TWIN TOWERS AT DUBAI'S DRAGON CITY LULU AND WATERFRONT MARKET TO BUILD HYPERMARKET IN DUBAI'S DEIRA DUBAI'S MUSEUM OF THE FUTURE ON TRACK FOR 2019 DELIVERY DUBAI RETAINS RANKING AS WORLD'S FOURTH MOST VISITED CITY RADISSON RED HOTEL LAUNCH IN DUBAI DELAYED TO MID-2019 JOINT VENTURES CAN BE A WIN-WIN IN DUBAI’S REAL ESTATE OPPORTUNITY RIPE FOR DUBAI TO ATTRACT MORE CHINESE WEALTH DUBAI HOMES 22% CHEAPER THAN MARKET PEAK IN 2014 DUBAI'S DEYAAR SET TO LAUNCH NEW BELLA ROSE PROJECT REVEALED: CASH STILL A KEY PLAYER IN DUBAI PROPERTY DEALS DUBAI DEVELOPER OFFERS BUYER OPTIONS FOR ANY JOB LOSS OPPORTUNITY RIPE FOR DUBAI TO ATTRACT MORE CHINESE WEALTH NOW START BUSINESS REMOTELY IN DUBAI HIGH-END DUBAI COMMUNITIES ARE TRENDING, ACCORDING TO DUBIZZLE UNION PROPERTIES COMPLETES HANDOVER OF NEW DUBAI PROJECT DUBAI | ABU DHABI | AL AIN | SHARJAH | JORDAN | KSA DEFINING LANDSCAPES SINCE 1985 © Asteco Property Management, 2018 asteco.com Page 3 ASSET MANAGEMENT SALES LEASING VALUATION & ADVISORY SALES MANAGEMENT OWNER ASSOCIATION REAL ESTATE NEWS AVERAGE DUBAI PROPERTY PRICES SAID TO DROP 3% IN Q3 DUBAI'S SWAROVSKI-INSPIRED TOWERS NEAR COMPLETION DEVELOPER SAYS $109M HOMES SOLD IN MAG EYE PROJECT IN DUBAI DUBAI PROPERTY PRICES, RENTS CONTINUE TO FALL IN Q3 JUST CAVALLI - LUXURY VILLAS FROM DAMAC DUBAI'S DEYAAR HIRES CONTRACTOR FOR NEW BELLA ROSE PROJECT DUBAI'S DEYAAR REVEALS PROGRESS WITH MIDTOWN CONSTRUCTION, SALES SMART POLICE STATION PLANNED FOR FLAGSHIP NEW DUBAI PROJECT REVEALED: STEPHEN HAWKING-INSPIRED DESIGN FOR UK PAVILION AT EXPO 2020 DUBAI REVEALED: WHICH DUBAI HOTEL BRAND DOMINATES TRIPADVISOR RANKINGS NAKHEEL UNVEILS THE UAE'S FIRST FLOATING SWIMMING POOL NAKHEEL LAUNCHES FIRST RESIDENTIAL PROJECT IN DRAGON CITY IS IT THE BEST TIME TO BUY LUXURY PROPERTIES IN DUBAI? WHY DUBAI PROPERTY BELOW DH1.5M IS A STABLE INVESTMENT ABU DHABI ABU DHABI'S KIZAD LAUNCHES NEW FREE ZONE WAREHOUSES, INDUSTRIAL UNITS PROPERTY GIANT ALDAR BUYS REMAINING 40% STAKE IN UAE'S KHIDMAH MIRAL INVITES PRIVATE SECTOR DEVELOPERS TO INVEST IN PROJECTS ON YAS ISLAND NORTHERN EMIRATES SHARJAH TO BECOME 'CHINA-READY' DESTINATION, SAYS TOP OFFICIAL SHARJAH, ASEAN SEEK TO BOOST TIES IN NON-OIL SECTORS ARADA AWARDS FIRST INFRA CONTRACT FOR SHARJAH'S $6.8BN MEGA PROJECT DUBAI | ABU DHABI | AL AIN | SHARJAH | JORDAN | KSA DEFINING LANDSCAPES SINCE 1985 © Asteco Property Management, 2018 asteco.com Page 4 ASSET MANAGEMENT SALES LEASING VALUATION & ADVISORY SALES MANAGEMENT OWNER ASSOCIATION REAL ESTATE NEWS NEW LUXURY GARDEN COMMUNITY UNVEILED IN SHARJAH MEGA PROJECT SHARJAH RULER ISSUES DECREE TO SET UP NEW NATURE RESERVE 165 ABANDONED HOUSES DEMOLISHED IN UMM AL QUWAIN INTERNATIONAL OPEC, ALLIES RULE OUT URGENT HIKE IN OIL OUTPUT HONG KONG MOST AT RISK OF A PROPERTY BUBBLE, SAYS UBS NRIS, YOU CAN EARN UP TO 35% RETURNS ON REALTY IN CERTAIN AREAS IN INDIA DUBAI | ABU DHABI | AL AIN | SHARJAH | JORDAN | KSA DEFINING LANDSCAPES SINCE 1985 © Asteco Property Management, 2018 asteco.com Page 5 ASSET MANAGEMENT SALES LEASING VALUATION & ADVISORY SALES MANAGEMENT OWNER ASSOCIATION BUYING IN THE UAE WILL ALWAYS BEAT RENTING DUE TO LONG-TERM CAPITAL GAIN Sunday, September 23, 2018 The intriguing new Rent vs Buy Calculator created by the real estate platform Propertyfinder caught my eye earlier this month. It compares the total cost of renting with the total cost of buying in the UAE. Its conclusion is that the monthly cost of buying is presently cheaper than renting. However useful this calculation is in planning your annual personal budgeting, it does rather miss another very decisive reason for owning rather than renting a home - provided you are looking at a long-term horizon and not merely passing through the UAE for a year or two. A mortgaged-home, bought at the right time, is by far the best financial investment anybody can make. Over time all global central banks allow the value of their currencies to depreciate to pay their national debt off in a relatively painless way. This effectively steals from savers whose money falls in value. But if you own a home it works the other way around. Depreciating currencies also mean asset price inflation is guaranteed over the long-term. So a fixed asset like a house will rise in value, while the fixed amount of the mortgage used to buy it in the first place will remain unchanged. The gap between the two amounts will be a growing capital gain for the owners. If, by contrast, you stay renting the same property over this period, you will have paid a similar, or perhaps higher amount according to the new calculator, but you will have precisely no capital gain. Home owners effectively win a big cash draw, with a free home for life when the mortgage is finally paid off, while renters can only count the fabulous sum that they have lost, just to live comfortably. Buyers effectively get their ‘rent’ back with interest. Earlier this year I wrote of a visit to Thailand and lunch with a couple of retiree expat friends who each made a million on their homes in The Meadows, Dubai. They were early buyers in 2003 and sold about a decade or so later. Of course, the current generation of buyers may not be so lucky - but, remember, those two millionaire expat pensioners had both been owners through the global financial crash and the Dubai real estate bust that came with it. They just carried on paying their mortgage and waited for prices to recover. As observed earlier, house prices always rise over the long-term because the central banks have to devalue money to balance their books. Along with many analysts, I reckon we are currently at, or very close to, the bottom of the price correction that began four years ago with a doubling of transaction fees, tighter mortgage lending criteria and an unfortunately timed oil price collapse. DUBAI | ABU DHABI | AL AIN | SHARJAH | JORDAN | KSA DEFINING LANDSCAPES SINCE 1985 © Asteco Property Management, 2018 asteco.com Page 6 ASSET MANAGEMENT SALES LEASING VALUATION & ADVISORY SALES MANAGEMENT OWNER ASSOCIATION Brent crude topped $80 a barrel while I was penning this article. The UAE as the trading hub of the oil-rich Middle East as well as a substantial low-cost producer is obviously going to benefit, and optimism among local businesses is turning up. How long before the recruiters are busy again and new staff require accommodation? Those 15,000 new units delivered in Dubai in the first eight months of this year won’t go that far. Demand will exceed supply and house prices will begin the bullish phase of the typical three-to-four year property up-cycle. It is always a good idea to be in at the start, or even slightly ahead of this cycle, if you want to maximize your capital gains. That said you should never get too strung out about house prices when you own a house. Given that you are usually buying with a five to f15-year time frame, expect fluctuations in value along the way. The best objection to this investment plan is that you do presently require a hefty 25 per cent deposit to get a mortgage to buy a home in the UAE. Not everybody has Dh500,000 lying around to buy a Dh2 million villa.