Dubai’s real estate sector still has some way to go in 2007, according to a new MONEYworks real estate survey, which was conducted in association with the independent PR agency, NettResults.
The survey which was conducted in association with MONEYworks Magazine in December of 2006 and January of 2007 gathered 1,000 responses from professionals from the UAE real estate market, including real estate agents, developers, construction consultants and financial institutions who lend money to developers and investors.
Nick Leighton, CEO of NettResults Public Relations said, “The first property survey from MONEYworks and NettResults springs some surprises, especially with the bulk of the respondents giving between average and slightly above average marks to Dubai’s property’s after sales service, quality of construction and rules and regulations.”
The majority of respondents, 52 per cent, are bullish on the long-term prospects of the Dubai property market; although 41 per cent felt that the prices have peaked in this cycle.
Specific questions on price increase or decrease were divided into residential and commercial sales with 65 per cent saying that they expected the residential purchase price to increase. Of these, the majority believed that the price increase would be between 10 and 20 per cent. Those who feel that prices will decline constituted 28 per cent and seven per cent had no answers or thought that they will remain flat. For commercial purchases also, the majority, constituting 72 per cent, felt that prices would move up during the year, while only 17 per cent felt that they will decline.
Mr Leighton commented, “We have seen through the representation of real estate agents, developers and other professional companies in the real estate market here in the Middle East that prices have been rising since Dubai’s property market was launched. Much of that growth has been fuelled by speculators targeting the higher-middle to high end residential market. The MONEYworks/NettResults UAE Real Estate Survey 2007 suggests that maybe there are some changes at hand.”
The MONEYworks/NettResults UAE Real Estate Survey 2007 also sought responses on three key quality issues that are important when buying property. The questions were on quality of construction, laws and regulations and quality of after sales service. Responses, again, were quite diverse. But despite complaints on the quality of construction that keep popping up in the media, most respondents gave the Emirate average to slightly above average marks.
Response to a question asking participants to rate the laws and regulations in Dubai, Abu Dhabi and Ras Al Khaimah on a scale of one to 10, with one being the lowest and 10 the highest, sprung a surprise with over 70 per cent of the respondents giving an above average rating to Dubai’s laws and regulations, compared to 50 per cent for Abu Dhabi and just over 25 per cent for Ras Al Khaimah.
There were also some insightful responses on the quality of mortgage financing available in the UAE. To the question if mortgage schemes offered by financial institutions were comparable to some of the best offered internationally, 58 per cent ticked the negative, while 36 per cent thought they were comparable.
In summation, Mr Leighton said, “The real estate market across the United Arab Emirates is being pulled up to international standards by its finger nails. We are expecting to see increased competition, increased prices and increased standards in 2007. Hopefully this will lead to the beginning of a consolidation which will see experienced professionals in this sector squeeze out often shoddy purveyors of poor professional services in the real estate market”.
For more information from The MONEYworks/NettResults UAE Real Estate Survey 2007, in depth analysis and comment from the leading real estate professionals look inside February’s issue of MONEYworks, available at all good newsstands and book shops across the United Arab Emirates.
The Results
1. Do you think real estate prices in the UAE have peaked in this cycle?
Explanation – do you think they have gone as high as they can and will reduce before there is another rise?
Yes – 41% No – 52% No Choice – 7%
2. Is it realistic to compare the prevailing prices in Dubai/UAE with other markets in the world, like London, Mumbai, New York, Hong Kong and Singapore?
Yes – 58% No – 37% No Choice – 5%
3. Do you think Dubai’s and the region’s developers are depending too much on international investors to keep the property market going?
Yes – 44% No – 51% No Choice – 5%
4. Do you think international investors are feeling more comfortable about investing in the GCC with laws being drafted?
Yes – 62% No – 33% No Choice – 5%
Do you think the laws could be better for making international investors feel more comfortable?
Yes – 81% No – 13 % No Choice – 6%
5. In terms of rules and regulations, how would you rate the laws in Dubai, RAK and Abu Dhabi and the other regional laws on a scale of 1 to 10, 1 being low and 10 being the highest rating compared to the West?
LOW HIGH
Dubai - 0 - 0 - 3 - 3 - 9 - 13 - 36 - 18 - 6 - 1
NO ANSWER – 11%
RAK - 2 - 2 - 15 - 20 - 19 - 14 - 4 - 4 - 3 - 1
NO ANSWER – 16%
Abu Dhabi - 1 - 2 - 6 - 3 - 22 - 24 - 20 - 4 - 1 - 1
NO ANSWER – 16%
6. How do you rate the quality of construction in Dubai compared to some of the other international markets on a scale of 1 to 10?
LOW HIGH
Dubai - 0 - 2 - 3 - 12 - 25 - 27 - 12 - 7 - 8 - 0
NO ANSWER – 4%
7. How do you rate the quality of after sales service compared to some of the other international markets on a scale of 1 to 10?
LOW HIGH
After sales service - 0 - 5 - 7 - 20 - 21 - 19 - 19 - 1 - 2 - 0
NO ANSWER – 6%
8. With the supplies coming, do you foresee a downward correction in property prices (and rents) of residential properties next year in the UAE? If yes, by how much—10 %, 20%, 25% or more? If not, do you think it will appreciate? 10 %, 20%, 25% or more and why? What about commercial properties?
<5% 5% 10% 20% 25% greater / <5% 5% 10% 20% 25% greater NO ANSWER
Residential purchase 1 9 22 28 5 0 = 65 / 28 = 2 6 14 5 1 0 7 Commercial purchase 1 4 26 37 1 3 = 72 / 17 = 2 4 10 1 0 0 11 Residential rental 2 28 23 19 6 1 = 79 / 14 = 3 1 7 2 1 0 7 Commercial rental 1 29 22 25 3 3 = 83 / 6 = 3 1 2 0 0 0 11
9. Do you think mortgage schemes offered by the financial institutions are good enough compared to financial products being offered internationally?
Yes – 36% No – 58% No Choice – 6%
10. Where do you see most UAE-based property investors and investments heading for in 2007—residential, commercial or both? And in what proportion? Where do you see these investments heading — Dubai, Abu Dhabi, Northern Emirates or outside the UAE?
Residential ___ % vs Commercial ___ %
0 100 - 1%
20 80 - 2%
25 75 - 1%
30 70 - 8%
40 60 - 20%
50 50 - 18%
60 40 - 28%
70 30 - 3%
75 25 - 1%
80 20 - 4%
NO ANSWER – 14%
Dubai – 80% / Abu Dhabi – 52% / Northern Emirates – 37% / outside the UAE – 7%
About Rasalmal Financial Publishing FZ LLC
Rasalmal Financial Publishing is the publisher of the region's first personal and investment magazine, MONEYworks. First published in 1998, MONEYworks provides impartial personal finance and investment information to make informed financial decisions. MONEYworks Magazine is also available in Saudi Arabia, Saudi MONEYworks and is available in Arabic, MONEYworks Al Arabiya, across the Gulf region.
PROPERTYworks Magazine is published by the group as the UAE's first impartial guide to property purchase and investment. The quarterly magazine delivers user friendly information to aid property decision making in the ever expanding UAE market. Try www.moneyworks.ae for more details.
For further information, please contact:
Mark Freeman, Sales and Marketing manager,
MONEYworks Group of magazines
Telephone: 009714-3912160
Direct: 009714-3912169
1. NettResults Public Relations
Founded in November 1999, NettResults is a leading independent public relations and media relations agency specialising in the real estate, tech, financial and energy sectors. Services include a full integrated media relations offering, internal communications, media training and crisis communications. Headquartered in Dubai, the agency provides implementation through the Middle East region with offices also in Abu Dhabi and Riyadh, KSA, has a wholly owned office in California, USA and operates through 51 partners in Europe, Africa, Asia and the Americas.
http://www.NettResults.com
