ASSET MANAGEMENT SALES LEASING VALUATION & ADVISORY SALES MANAGEMENT OWNER ASSOCIATION NEWS BRIEF 08 SUNDAY, 25 FEBRUARY 2018 RESEARCH DEPARTMENT DUBAI | ABU DHABI | AL AIN | SHARJAH | JORDAN | KSA IN THE MIDDLE EAST FOR 30 YEARS © Asteco Property Management, 2018 asteco.com ASSET MANAGEMENT SALES LEASING VALUATION & ADVISORY SALES MANAGEMENT OWNER ASSOCIATION REAL ESTATE NEWS UAE / GCC AVOIDING THE PITFALLS OF A PROPERTY INVESTMENT THE VAT CHALLENGE HOW VAT HAS AFFECTED DUBAI REAL ESTATE BUSINESSES, SO FAR GO THE ‘SMART’ WAY ON YOUR FACILITIES MANAGEMENT COSTS SAUDI ARABIA TO INVEST $64B IN ENTERTAINMENT IN NEXT DECADE 11 UPCOMING AND FASTEST GROWING AREAS IN UAE ALL YOU NEED TO KNOW ABOUT A PROPERTY'S MARKET VALUE WHEN PROPERTY PRICES ARE NO MORE IN SQUARE FEET EXPO 2020 TO DRIVE CONSTRUCTION BOOM IN UAE GREEN, HAPPY RESIDENCES: A DELICATE BALANCE REVEALED: UAE'S HOTTEST PROPERTY AREAS DUBAI MORE HOMES IN 2018 TO PUSH DOWN RENTS IN DUBAI, ABU DHABI SOBHA GROUP NAMES KEY CHANNEL PARTNERS FOR 2017 HIRA INDUSTRIES SETS UP FACILITY AT NATIONAL INDUSTRIES PARK PROPERTY PRICE CORRECTIONS IN DUBAI TO CONTINUE THIS YEAR DUBAI: THE EXHIBITION HALL OF ARCHITECTS STEPS TAKEN TO COOL DOWN DUBAI’S OFF-PLAN MARKET 50 PER CENT COMPLETION REQUIRED BEFORE OFF-PLAN SALES CAN BEGIN IN DUBAI DONALD TRUMP JR. VISITS INDIA TO HELP SELL APARTMENTS FIRST LOOK INSIDE A XXII CARAT VILLA EMIRATES REIT RECORDS PORTFOLIO VALUE OF $860M FOR 2017 NAKHEEL INKS BIGGEST PROJECT DEAL THIS YEAR NEW REPORT REVEALS CHEAPEST, COSTLIEST PLACES TO RENT IN DUBAI DUBAI’S HOTELS ROOM SUPPLY SET TO GROW BY 11.1% FROM 2017-19 DUBAI | ABU DHABI | AL AIN | SHARJAH | JORDAN | KSA IN THE MIDDLE EAST FOR 30 YEARS © Asteco Property Management | 2018 | asteco.com Page 2 ASSET MANAGEMENT SALES LEASING VALUATION & ADVISORY SALES MANAGEMENT OWNER ASSOCIATION REAL ESTATE NEWS DEVELOPERS NEED TO PUT 20% OF PROJECT VALUE IN ESCROW PROPOSED RULES MAY HIT OFF-PLAN SALES IN DUBAI DUBAI TO SOON UNVEIL FIRST 3D-PRINTED VILLA 5 AFFORDABLE APARTMENTS NEAR METRO STATIONS IN DUBAI FOR SOME DUBAI DEVELOPERS, OFF-PLAN SALES ARE PASSE DUBAI’S LAND DEPARTMENT RETAINS STATUS QUO ON OFF-PLAN SALES PAY WITH CRYPTOCURRENCY, GET DISCOUNT AT THIS PROPERTY ROOM RATES REVEALED FOR JUMEIRAH'S FIRST ZABEEL HOUSE HOTEL DORCHESTER COLLECTION TO MANAGE RECORD-BREAKING PALM JUMEIRAH PROJECT ABU DHABI ABU DHABI LAUNCHES AN INVESTMENT OFFICE TO ATTRACT FDI HOW DO I TACKLE MY ABU DHABI NEIGHBOUR'S NOISY PARTIES? NEW PROJECTS APPROVED IN ABU DHABI NORTHERN EMIRATES NOW, SHARJAH’S DH25B WATERFRONT CITY SETS SAIL COMING UP: NEW RETAIL PROJECT IN SHARJAH DEVELOPER OF DH25BN SHARJAH WATERFRONT CITY EXPECTS TO SELL PHASE ONE UNITS BY JUNE INTERNATIONAL FREEDOM SLOGANS COME AT A PRICE FOR CATALONIA’S PROPERTY NEW SALES ROUND KICKS OFF AT LONDON’S CHELSEA CREEK LONDON BACK TO BEING TOP COMMERCIAL REALTY INVESTMENT HOTSPOT ACCORHOTELS SAYS PROFITS UP 66% IN 2017 RISING INTEREST RATES, INFLATION CONCERNS PUTTING UPWARD PRESSURE ON U.S. CAP RATES 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 AVOIDING THE PITFALLS OF A PROPERTY INVESTMENT Wednesday, February 21, 2018 Although any asset is an achievement in itself, success to most property investors is really determined by their ability to continue purchasing real estate. Unfortunately, so many UAE residents save for years to be able to afford an investment property, but often once, they achieve this, their progress remains stagnant because they aren’t sure of their next move. Many people avoid investing in property entirely out of fear of failing, and the recession only cemented their worst fears. We also know that after the market plummeted in 2007, it took some time for investors to regain confidence in Dubai as a safe destination for property investment. Scores of residents and foreign investors managed to cash in at the high of the market, but countless saw major losses during the crash, before the market slowly re-emerged, albeit bruised and battered. Since then, keen investors have rightfully come to view Dubai’s real estate as a long-term game rather than an opportunity to make a quick buck. Investing is a long-term game, and if you want to see yourself grow financially, you have to think strategically. For example, in Old Town Dubai, the average price for a one-bed unit was approximately Dh600, 000 10 years ago, and it is now Dh1.2 million. The buy was in a time of crisis for the UAE economy. According to the Dubai Land Department, 69,000 transactions were done during 2017, with the overall transaction value at Dh285 billion. This certainly cements the idea that Dubai is a fertile ground for investors and reflects the strength of the market and its ability to grow. It also presents opportunities for both experienced and green investors to play a smart game. Throughout the years of building my own portfolio, I learnt that the attitude of the investor will continue to play a significant role in long-term investment success. I share below the five most common attitudes that cause people to ultimately fail in this market. Being selfish When a person is investing such a large amount, it’s natural for them to want it to be something that they consider perfect. When it comes to real estate, however, rather than purchasing a property based on personal preferences, it’s crucial to prioritise the wants and needs of the target tenant. If an investor puts themselves first, they not only decrease the pool of prospective tenants, but risk making emotionally charged decisions. Impatience When it comes to property investment, patience is definitely a virtue. Real estate is a long-term commitment, and a common example of an investor failing to reach their target financial outcome is when they lack patience and flip the property for a short-term gain. In order to increase capital growth, and guarantee rental advances, a property needs to be held for at least seven years. Dubai is now attracting long-term investors from all over the world and the flippers of yesteryear are out the door, patience will be a virtue and will pay off. Not taking responsibility 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 Often there are numerous parties involved in purchasing an investment property, and a common mistake among failed investors is to blame others for issues that occur. Although certain tasks may be managed by particular people, the responsibility of the property ultimately lies with the investor. If something goes wrong, it is crucial to take accountability and work to rectify the situation rather than passing the blame. Hesitating Countless investors’ experience “analysis-paralysis” and overly scrutinise any potential purchase to ensure the property is perfect. Although it’s always important to make an informed decision, if an investor has done their due diligence and is comfortable with the return, it’s important to buy without too much hesitation to avoid missing out. Doing it alone In order to cut costs, many investors attempt to find, purchase, and manage a property alone. Although this is possible, for most, it results in failure or having to spend more in the long run to rectify problems that arise. To guarantee success it’s important to enlist the help of professionals who can ensure the entire process runs smoothly and with the investor’s best interests in mind. Source: Gulf News Back to Index 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 THE VAT CHALLENGE Wednesday, February 21, 2018 While the new value-added tax (VAT) does not directly affect residential property, the housing market will definitely feel the effects of the new tax regime. From the outset, the increase in prices of goods and services in the UAE will take its toll on the purchasing power of residents, which will of course impact their budget on housing. “Major expenditures such as housing rental, education and healthcare services are either zero rated or exempt from VAT,” Mayank Sawhney, director at MaxGrowth Consulting, tells PW. “All these comprise around 60 per cent of total household expenses. So in essence, the VAT should have resulted in an inflation of 2 per cent.” However, retailers have not just increased prices based on VAT; many have built in much higher margins in their prices since January, according to Sawhney, bringing actual inflation closer to 4 per cent. “Most retailers are passing on the costs to the customers, so the costs have gone up,” says Shiraz Khan, senior tax advisor at Al Tamimi & Company. Wholesalers and retailers are also going to be affected and, therefore, this segment will have a new financial burden. “Commercial properties are subject to VAT and all shopkeepers and retailers will have to pay the implementation costs of the tax,” says Muhammad Sohaib, senior accountant at Al Yousuf Real Estate. Such costs include training expenses and software purchases, as well as hiring of VAT accountants. “For high-net-worth individuals, this will not make much of a difference,” notes Sawhney. “But for lower and mid- income people, especially when their salaries or business income is not increasing, even a 4 per cent increase in cost of living will have an effect on their spending.” A recent survey by finance comparison site Yallacompare found that almost half of UAE residents (44.6 per cent) are worried they will not be able to afford the increase cost of living brought about by the country’s implementation of VAT.